Harry Moroz

Remembering The Suppliers

Writing in the Chicago Tribune, Matthew Desmond is concerned about the impact of foreclosures on urban rental housing. The frequency of foreclosures among small property owners, declining property values, and expensive financing mean that:

Housing stock will become concentrated in fewer hands; big landlords will get bigger as smaller ones are squeezed out. Less competition between landlords will decrease housing access and drive up rents, placing poor families already crushed by the high costs of housing in an impossible financial situation.

Housing affordability, particularly in places like New York, is often discussed in terms of demand. Suburban boosters like Joel Kotkin call New York, San Francisco, and Portland “luxury cities” that price lower- and middle-income families out of their markets (no matter that Kotkin thinks these families would choose McMansions with a lawn, anyway).

But Desmond reminds us that supply – and suppliers – also matter. The biggest real estate stories in New York – Stuyvesant Town and 1520 Sedgwick Avenue, for example – have been stories of big investors taking over housing previously affordable to working class families. The expectation of gentrification and high demand for housing all over the city led real estate investors to believe that they would benefit from deregulation of the housing market and rising rents. But it is the fact that these investors were speculators that has left so many renters in Stuy Town, Sedwick Avenue, and elsewhere living in deteriorating conditions and in danger of losing their homes.

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Posted at 4:03 PM, Apr 19, 2010 in
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