New Orleans   It seems like it has taken forever, but the first units of affordable housing as part of the victorious, but controversial, agreement negotiated between ACORN and Forest City Ratner to be built as part of the Atlantic Yards project, are finally coming to fruition, better late than never, thanks to the 2007-8 housing financing meltdown.

DNA Info reported:

Applications are now open for the first units of affordable housing at the Atlantic Yards Pacific Park complex. The modular tower built by Forest City Ratner Companies is the first building in the 22-acre Pacific Park development (formerly Atlantic Yards to join the city-run affordable housing lottery. The Dean Street property will contain half market-rate apartments and half affordable housing; the tower has 363 units in total.

Rents … will range from $559 per month for a studio at the lowest income requirement bracket ($20,675 to $25,400 per year for one person) to $3,012 per month for a two-bedroom at the highest income bracket (between $104,915 and $144,960 per year, depending on household size), the lottery requirements said.

As the country-and-western song goes, “that’s something to be proud of…,” but the larger issue continues to be in New York and most other cities in the US and around the world how unaffordable housing is. Ironically, as much as the delay at Atlantic Yards had to do with the meltdown in bank lending because of the housing bubble, banks are still at the heart of unaffordability.It’s not /just /gentrification, in fact, the gentrifiers are as much an effect caused by banks as they are a trigger for rising prices.

Stuart Melvin, ACORN’s head organizer in the United Kingdom, shared a piece from the New Economics Foundation with me several months ago.They noted that:

 

In advanced economies, banks’ main activity is now domestic mortgage lending. A recent study of credit in 17 countries found that the share of mortgage loans in banks’ total lending portfolios has roughly doubled over the course of the past century –from about 30% in 1900 to about 60% today.

 

This is how banks are making money everywhere, rather than through direct lending to consumers or businesses, partially because the land is a solid asset serving as collateral, meaning they can foreclose.  Where the land is scarce as it is in New York, London, San Francisco, and, well, lots of big cities, this makes each parcel more valuable and the next thing you know on the rollup, houses are costing nine times average  annual income throughout England and twenty times annual income in southeast England for example and that’s true for many other cities as well.

All of which squeezes housing developers even more, especially if they are not heavily subsidized by the government, when it comes to providing decent and affordable housing. The same level of bank profits cannot be gained compared to mortgages, so prices balloon, and the available customers who can handle the weight become smaller, and richer, until the whole bubble bursts again.

We countered this in New York through land trusts or mutual housing arrangements, but that is only partially successful. The scale of the issue is too large. Other countries and communities have tried land banks or public corporations.Unless we change our public policy around housing though this is a problem accelerating once again until it crashes against the wall, and in the meantime, low and moderate income families find themselves left with fewer and fewer affordable opportunities for decent housing.