Left Behinds

The anti-andrewsullivan.com. Or, the Robin Hood (Maid Marian?) of bright pink Blogger blogs.

Sunday, September 03, 2006

Why I am a liberal part II: the middle class in New York

I've had this post knocking around in my head for a while, and it's gotten longer and longer with no resolution. So I'm just going to get as much of it out of the way as possible and move on. Essentially, the topic is that the middle class is being squeezed out of New York, but too often that transformation is presented in the media as either a) inexorable or b) the fault of the people moving in.

A friend of mine and Solomon's gave a speech about six months ago on the loft-ization of SoHo. In the introduction he mentioned that wherever in the city he goes to speak about urban policy, the #1 thing young white people want to talk about is gentrification and their own role in it. My theory is that this arises both from the desire to be in a position of power rather than helplessness (even if it makes them guilty) and from the basic belief that markets move blindly, as the result of innumerable private decisions. We've had many, many years of the politics of consumption to inculcate that belief (e.g., currently I am not buying Coca-Cola products because of this sort of thing), but ultimately it results in some absurd formulations. At a housewarming party I threw a month ago, one of my guests told me about two of her friends, who have made the principled decision to spend as much as possible on housing so as not to compete with people making less. (I swear I did not make that up. What's more, she looked downright confused when I said that the idea was completely ridiculous, and that even if everyone followed their lead, it would only enrich landlords more and have absolutely no effect on the underlying problem.)

Maybe the bad aftertaste of Communism has made us all leery of analyzing means of production. But we need to get over that. Ownership matters. The middle and working classes are being forced from Manhattan in particular and New York in general as a result of decisions by large-scale private enterprises (and shitty public schools), and the only force we have collectively to counter those decisions is our government; unfortunately, New York City's government has been run largely for the benefit of private developers and landowners for about, oh, a decade and a half now.

Take the example of the sale of Stuyvesant Town and Peter Cooper Village.

While state law would prevent a new owner from charging market-rate rents to existing residents as long as they remain in their current apartments, an owner could in many cases have the unit deregulated when the current tenants die or move. Over the next decade or so, the best-known bastion of middle-class housing in Manhattan could become largely unaffordable to the middle class.

“We’re losing more at one end than we’re gaining in affordable housing at the other end through the mayor’s plan,” said Victor Bach, a senior policy analyst for the Community Service Society, an organization that studies and tries to alleviate poverty in the city. “This just tips the balance even worse. It’s more difficult to make the argument that the efforts of the city in affordable housing, which deserve a lot of praise, are going to compensate for the market losses that occur through sales.”
...
City officials said they would be willing to work with any buyers who are interested in keeping Stuyvesant Town and Peter Cooper Village affordable to the middle class, and could offer incentives. For example, they might help a buyer with getting financing for a co-op conversion plan under which current tenants at certain income levels could buy their apartments at a reduced price.


The subtext is that this is an inevitable result of market forces, and while the city may be able to offer incentives to keep apartments somewhat affordable for sale, they certainly won't be able to preserve affordable rental units. (Indeed, the whole idea of affordable rental housing is more or less quaint to the Times.) No matter what the city does, there will be fewer units on the market affordable for middle-class renters.

Contrast that with Liza Sabater's analysis of the city's long complicity with MetLife in driving out middle-class residents. Read the whole thing, but this snippet is particularly instructive:

It is no secret that MetLife warehoused hundreds of apartments during the 1980s and 90's while they lobbied to get rid of rent stabilization laws. Stuyvesant Town is the perfect example of how demand for housing in New York City is inflated and enhanced by those who control inventory not those who demand it.


Markets are not free. They are always manipulated by those with the power to do so: governments on the one hand, private enterprise on the other.

Take another example: the Pinnacle Group. This one hits closer to home because I just moved into a Pinnacle building.

[D]uring the past two years, Mr. Weiner, 57, and his firm, the Pinnacle Group, have spent more than $1 billion on hundreds of apartment buildings and quietly become one of the biggest property owners in neighborhoods from Brooklyn to the Bronx.
...
Critics accuse Pinnacle of buying buildings and firing superintendents within weeks. Questions have also been raised about whether the company has violated the city’s rent-stabilization laws by sometimes raising rents higher than is legally allowed, through such measures as passing along the cost of questionable renovation expenses. In one case, the cost of installing five toilets was passed on to a tenant in a two-bathroom apartment.

The critics also say the company has been engaging in harassment to force people out of their apartments. Tenants describe being put through a Kafkaesque tangle of eviction notices slipped under doors at night, and of legal challenges made to their right to live in longtime apartments.
...
Mr. Weiner has not disputed that his company has sent out 5,000 dispossess notices to tenants in its approximately 21,000 apartments in the past 29 months. That, say adversaries, is itself cause for alarm.

“When you are trying to evict one out of four tenants, that is what lawyers call prima facie evidence,” Congressman Rangel said. “It is something that screams out for a criminal or civil or legal remedy.”


After reading that article I have little doubt that this happened to the previous tenant of my apartment, by the way, and I also have no doubt that my rent could be increased substantially in the near future. But aggressive harrassment of literally thousands of tenants can only be dealt with on the government level. My decision to take my apartment (regardless of the guilt I may feel about it now that I am a little better informed) is literally irrelevant.

For yet another example, check out Mark Winston Griffith's very smart pieces on lending scams as the nasty secret of gentrification here and here.

Let me change gears a little. There are many reasons to care about the erosion of the middle class as a broad demographic fact affecting the country as a whole, but why care so much about middle-class (or at least mixed-income) neighborhoods in New York? After all, according to this Brookings Institution report on the loss of middle-class neighborhoods in cities across the country, only 16% of the families in New York fall into the middle income categories (between 80% and 120% of Area Median Income). Why worry so much about such a small minority?

Well, as the report puts it:

If rising economic inequality has contributed to rising economic segregation, the ability of lower-income individuals’ to choose and access middle-income neighborhoods may have declined. This, in turn, may limit their access to associated amenities like jobs, decent health care, safe neighborhoods, and adequate political representation. A lack of middle-income neighborhoods may also limit opportunities for low and moderate-income homeowners to “move up” the property ladder, if the house-price differential between lower- and higher-income neighborhoods is too high.


In other words, people can't climb the socioeconomic ladder if you yank out all the middle rungs. Very, very few people if any can jump from the bottom to the top in one step. The continued existence of middle-class or mixed neighborhoods is vital to the future prospects of those who now earn much less. So add all those below 80% AMI--now we're up to more than 57% of the city.

This has already taken an hour to write so I'm going to leave it there, very likely having said nothing you didn't already know. But at least now I can stop thinking about this and go back to making fun of Pataki's combover or whatever. Maybe I'll add thoughts later if I have them.

UPDATE: Larry Littlefield offers interesting evidence that contrary to news reports, Stuyvesant Town and Peter Cooper Village are no longer true middle-class enclaves at all, but islands of the merely affluent (as opposed to superrich).

22 Comments:

  • At 11:10 AM, Blogger Antid Oto said…

    I was going to say you're right, it can't possibly be, it must be because Brookings used the New York MSA, not New York itself. But then I saw this op-ed by another Brookings scholar that uses the same percentages, which seems to imply it is New York City itself. Remember, upper-income in this case = 120% of AMI which works out to above $60,000. (New York's family AMI is about $49,000.) 33% of families have incomes over $75,000. 26% of families have incomes under $25,000.

     
  • At 12:24 PM, Blogger Antid Oto said…

    I might have mixed up 2000 and 2004 numbers in the above. Will recheck later. I have to go out for the day now.

     
  • At 1:44 AM, Blogger Antid Oto said…

    No, it's definitely the metropolitan area. See this Times article covering it.

    Here are the borough-by-borough numbers for neighborhoods (not families):

    INCOME TYPE IN EACH BOROUGH (2000)

    Bronx
    Lower -- 56%
    Middle -- 22
    Higher -- 22

    Brooklyn
    Lower -- 39
    Middle -- 34
    Higher -- 27

    Manhattan
    Lower -- 40
    Middle -- 8
    Higher -- 51

    Queens
    Lower -- 10
    Middle -- 41
    Higher -- 49

    Staten Island
    Lower -- 5
    Middle -- 17
    Higher -- 78

     
  • At 1:45 AM, Blogger Antid Oto said…

    Oh, and AMI in 2000 was about $42,000.

     
  • At 12:03 PM, Blogger Solomon Grundy said…

    Interesting. My guess is that most of those middle income neighborhoods in Queens are exclusively white, and probably most of them in Brooklyn. Certainly everyone on Staten Island is white (and, when you talk to them, they all identify as middle class).

    Also, I wonder how the AMI has changed over the past 30 years, adjusted for inflation.

     
  • At 6:24 PM, Blogger Antid Oto said…

    Family AMI in 1969, in 2000 dollars, was about $46,000. In 2004 dollars that's about $50,000. The 2000 family AMI of $42,000 is equivalent to about $45,500 in 2004 dollars.

    Do any other conversions you like here.

     
  • At 6:25 PM, Blogger Antid Oto said…

    I got the AMI for 1969 from this historical table, by the way, which covers MSAs only.

     
  • At 1:30 PM, Anonymous elana said…

    thanks for the shout out!!!

    this piece is great.

    check out Mark's piece on stuy town on the DMI blog
    http://www.dmiblog.net/archives/2006/09/the_middle_class_is_losing_aga.html

    he's working on great big piece that should be printed soon.

     
  • At 1:35 PM, Blogger Solomon Grundy said…

    oh whoops i accidentally deleted my first comment, which was (written at 4 am a couple days ago):

    I'm actually very surprised that 40% of New Yorkers are upper middle class or above (or is it late enough that I'm quickly doing those numbers wrong?).

     
  • At 1:46 PM, Blogger Solomon Grundy said…

    oh, and as far as the AMI (thanks for doing the conversions), i'm a little surprised it's only gone down $4,000 in 40 years.

     
  • At 4:48 PM, Blogger Antid Oto said…

    Thanks, elana. I'll look for the new piece.

     
  • At 7:35 PM, Blogger Solomon Grundy said…

    I actually wrote something about the Littlefield piece, then deleted it, because I couldn't decide what I thought of his argument.

    One problem is how to define the middle class. Is it really only 80-120% of the median income? That'd definitionally eliminate a lot of people who staunchly identify as struggling middle class, rather than affluent.

    Another problem is that Larry thinks the city, rather than investing in an upper middle class enclave for the few, should just send the enclave to the market wolves and collect taxes on the inevitable luxury developments, then redistribute the increased tax revenue evenly to the rest of us, rather than focusing on the fortunate few.

    Unfortunately, that's not the way the tax system works, as demonstrated by the fact that there's a lot more luxury housing in NY than there was ten years ago, but property taxes went up pretty significantly a couple years ago, and there's no direct link between fluctuations in property taxes and education funding.

    However, I do like his point that it's questionable for the City and the AFL CIO to invest in a $5 billion housing development just before everyone is predicting that the housing price bubble will pop. But that's a kind of technical problem (how to reduce costs), not about whether the policy is worthwhile in the first place.

     
  • At 12:28 AM, Blogger Antid Oto said…

    I'm not sure what I think about the whole thing either. I mean, it's not like the median income he cites for Stuytown and Peter Cooper is just above that 120% mark--it's damn near twice the city median. Also, as I mentioned to him in my latest comment, my understanding is that rental and for-sale housing prices have an inverse relationship, meaning that a pop in the condo housing bubble won't necessarily bring down rents.

     
  • At 3:24 AM, Blogger Solomon Grundy said…

    But is a family of four living in some crappy apartment in Inwood, whose main breadwinner makes $90,000 a year, affluent? I have someone in mind, and he'd resoundingly say no. He'd say he's getting by and has to send his kids to a really bad public school.

     
  • At 10:24 AM, Blogger Antid Oto said…

    How would you define middle-class, then? If you're struggling in the middle class at 200% AMI, what are you at the median?

     
  • At 3:00 PM, Blogger Solomon Grundy said…

    Fucked.

    My only point is that the working definition of middle class as 80%-120% of AMI is very inconsistent with what most people think of when they think of the New York middle class. I'm not even talking upper west side doctors and lawyers, just people with ok jobs.

    Don't you think? I have friends who make in the 50s and 60s who complain about being broke all the time, and they don't even have families.

    Personally I can live on $10K-$15K a year in nyc, but I'm really tight and get all my books from that 100%-off sale they have at B&N whenever I go there.

     
  • At 3:02 PM, Blogger Solomon Grundy said…

    I mean, I guess complaining about being broke all the time is part of being middle class.

    Also, I'm assuming the AMI is median household income. If it's individual, that's a little different.

    For me, the archetypal middle class New Yorker would be a police officer living in Queens.

     
  • At 3:05 PM, Blogger Solomon Grundy said…

    I'm so bad with guestimating incomes. Someone recently asked me what an average starting salary in the magazine industry is, and I said high teens/low 20s, because that's what it was the last time I paid any attention, in 1993.

    What do cops make? I'm guessing a mid-career cop makes 70something. Which seems middle class to me (for a whole family), but would be considered affluent by the AMI metric.

     
  • At 3:09 PM, Blogger Solomon Grundy said…

    Hm, I was pretty close:

    Annual base salaries for officers hired during January 2006 or after:

    Police Academy (first six months): $25,100*
    Upon completion of six months: $32,700
    Upon completion of 1 _ years: $34,000
    Upon completion of 2 _ years: $38,000
    Upon completion of 3 _ years: $41,500
    Upon completion of 4 _ years: $44,100
    Upon completion of 5 _ years: $59,588

    These salaries do not include overtime earnings, night-shift differential, holiday pay, and uniform allowance. There is also longevity pay every five years up to twenty years of service.


    So once you've been there 10 years, and factoring in overtime and all that, you're in the very high 5 figures. Is that affluent?

     
  • At 3:44 PM, Blogger Antid Oto said…

    Just to be exact: median family income, not household, for New York City is about $49,300. Median household income is $43,400. Definitions:

    Income of Households – This includes the income of the householder and all other individuals 15 years old and over in the household, whether they are related to the householder or not. Because many households consist of only one person, average household income is usually less than average family income.

    Income of Families – In compiling statistics on family income, the incomes of all members 15 years old and over related to the householder are summed and treated as a single amount.


    Yes, I realize this makes no sense.

    I'm not trying to argue that people making above the median aren't struggling too. Two years ago Wider Opportunities for Women released a Self -Sufficiency Standard that basically shows that in New York a family needs to earn just about the median merely to cover its basic necessities at an acceptable level, without government assistance. But at that level you can't afford longer-term needs, such as retirement, purchase of major items such as a car, or emergency expenses.

    But there is a definitional problem here. Can you expand "middle class" to include everyone who isn't blatantly rich? Because pretty much everyone below the rich is struggling in this country at the moment.

    At the moment, I'm totally agnostic about what should be done with Stuytown etc. I might be less ambivalent if the proposals to preserve affordability also included some explicit directions for income diversity among new tenants.

    But what do I know, anyway. I have no idea how to solve the affordable housing crisis in New York. I'm just trying to keep my mind open, while quietly freaking out about how much my landlord is going to raise my rent next year.

     
  • At 4:50 PM, Blogger Solomon Grundy said…

    That self-sufficiency standard is pretty sobering.

    I dunno, I'd consider people who make below $100K middle class, and above that, affluent (whatever affluent means -- upper middle class?). That may be arbitrary, but not a whole lot more arbitrary than the 20%-above-or-below-median metric. Basically, if you can afford to put away a couple coppers a year for retirement and whatnot, you're upper middle class.

    And the rest of us should move to Sweden.

     
  • At 2:56 PM, Anonymous Jeff said…

    Couple thoughts:

    1) The aggregate housing supply stock is simply too large to have one single party manipulate prices. Even if you take the top 3 land-owners in NYC (Columbia University, the city of New York, and NYU), their housing stock comprises less than 1% of the total supply. Sorry, but there's no government/private sector conspiracy here.

    2) Solomon, yes, NYPD tend not to make much salary-wise, but keep in mind they have a very generous city pension (half-pay after 20 years). do the math - if you do your time and live until your 80, that measly $60,000/year salary is essentially doubled to $120,000/year once you factor in future income. Not too shabby for the city's finest.

     

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