Living in the same city where you work fosters a critically important connection to the community and people you serve. Yet for firefighters, police officers, teachers, nurses and millions of other low- and moderate-income workers in urban areas, it can be a herculean challenge to find safe, affordable housing near where they work. Since the housing and economic crash of 2008, cities have failed to keep pace with the demand for housing for low- and moderate-income renters and owners, forcing too many workers to live away from the communities that need them most. In its Housing Finance at a Glance Monthly Chartbook, the Urban Institute reports that, for the majority of the nation’s largest metropolitan areas, home sales prices are less affordable in 2016 that they were in 2003.
The private market is doubling down on amenity-rich, city-center housing, which is simply too expensive for all but the highest paid workers to afford. And many municipalities and state governments are taking laudable steps to invest in subsidized housing to serve the homeless or those living in poverty. Unfortunately, low- and moderate-income workers still face a dearth of affordable housing options and continue to be priced out of the cities where they work. Even without any further cuts to federal housing support by the Trump Administration, the Center on Budget and Housing Priorities projects that due to the 2011 Budget Control Act, rental vouchers for 25,000 low income households will lose funding in 2017.
Housing insecurity also means urban centers are losing potential for economic growth. Without middle-income earners living in or near our largest population centers, the economy quickly becomes constrained and sometimes even incapable of growth. These middle-class families are critical drivers of local businesses, spending income on transportation, child-care, and retail goods for their households. They contribute to the region’s tax base, helping to fund local schools and public services. Without these members of the labor force living within the cities they serve, the culture and vitality of cities themselves begin to suffer.
Amalgamated Bank understands this critical gap in the urban housing market, and has been working to help fix it for more than 80 years. Back in the 1940s, Amalgamated Bank helped fund the first union-supported housing development in the country, housing 700 moderate-income families at first, and eventually growing to house over 1,400 families. In 1957, we offered home loans to the shareholders of the Park Reservoir Housing Cooperative in the Bronx, the state’s first affordable development created under the Mitchell-Lama Housing Program.
Our work to create affordable housing options continues to this day. Today, more than half of our commercial real estate loans are made in low- and moderate-income neighborhoods, helping workers afford to keep living in the communities they serve. Amalgamated Bank now has a loan program to fuel construction of up to $100MM in affordable multifamily housing in New York across all five boroughs, Nassau County, and the Hudson Valley. And our work doesn’t stop in New York. In 2015, a 25-unit affordable housing development for seniors broke ground in Washington, D.C.
As private housing construction has turned away from affordable and moderate housing over the past several decades, it has created opportunities for Amalgamated and others to use our assets to build a stronger, more accessible economy for all. Recently, we've redoubled our efforts to finance the development of multifamily and mixed use properties located in areas and priced at a level that will allow middle income households to return to the cities where they work. Additionally, through a Responsible Contractor Policy, we will work to ensure that we increase job opportunities for low and moderate income workers.
As the bank with values, we take our role in addressing the nation’s housing shortage seriously. Working families are the backbone of our nation’s economy and, unless they are given the opportunities they need to succeed, we will continue to watch cities become unaffordable to all but the very affluent. We take pride in our ability to offer financing for affordable housing to help counter this trend. Every member of the workforce should have the opportunity to live in the city in which they work and a chance to feel invested in a neighborhood they’ve helped to create.