Housing Speculation, Affordable Investments, and Tenant Outcomes in New York City

David M. Greenberg
Julia Duranti-Martínez
Francisca Winston
Spenser Anderson
Local Initiatives Support Corporation

Jacob Udell
Caroline Kirk
University Neighborhood Housing Program

Richard D. Hendra
New School University

Housing speculation has been generally understood to be a major driver of displacement and hardship for Black, Indigenous, and People of Color (BIPOC) communities. To explore the impact of speculation, this research assesses tenant outcomes in buildings with the fastest-rising property values in New York City. In so doing, it builds on administrative data on mortgage transactions, sales prices, housing maintenance violations, and marshal’s evictions to analyze the association between apartment building finances and tenant well-being. Combining these data with building-level information on affordable housing investments, the article also explores how acquisition of distressed housing by nonprofits, tenant cooperatives, and other responsible owners of affordable housing may disrupt speculative cycles and contribute to positive tenant outcomes. It finds that 1) sales price and mortgage debt increased the most steeply in neighborhoods with higher poverty, higher Black and Latinx populations, a growing percentage of adults with college degrees, and a growing population (in other words, neighborhoods showing signs of gentrification); 2) controlling for community characteristics, buildings with the highest increase in debt had about 0.78 more maintenance violations per unit per year than those that did not; 3) building owners who took on the most additional debt or bought at steepest price increases successfully evicted their tenants at 1.5 times the rates of others who owned properties in similar neighborhoods; and 4) buildings receiving affordable housing investments are less likely to be subject to speculation and are significantly better maintained than comparable properties in similar neighborhoods. Taken together, these findings suggest that speculation, and especially speculative finance, disproportionately impacts BIPOC communities and tenant quality of life, and that affordable housing investments can both protect buildings from speculative practices and improve tenant well-being.