What Does It Take To Buy A House In New York? – Transcript

Voices in order of appearance
Pete Tomao
Rev. Butler
Eustace Greaves
Willie Suggs
Erik Nilsen

Pete Tomao
If you want to get a New Yorker to talk, just ask about their rent or something about housing. Those conversations I had in Manhattan were a tiny snapshot of how people are experiencing the New York housing system but it encapsulates the difficulties residents face in just trying to find a home.

But in America and New York City homeownership is becoming more and more of a luxury, something reserved for the rich, and increasingly the very rich.The median home price in the city doubled over the past decade and now stands at around $800,000.

And since the pandemic began home prices in America as a whole have increased at record rates. Rising 18.8% in 2021.

Since entering the workforce in 2012, I have spent $104,000 on housing. That’s a crazy amount of money. And unfortunately not unusual.

But what does it take to buy in this record tight housing market and become housing secure.

To help answer that question I get in touch with Rev. Charles Butler. He runs a home buyer education class at Harlem Congregations for Community Improvement. The class runs through the nuts and bolts of what it takes to become a homeowner, with a focus on low to moderate income households.

The classes are virtual but Rev Butler’s passion is still palpable through the Zoom meeting. We’ve spoken several times on the phone and he gives me a nice shout-out

Rev. Butler
I see you brother, I see you Peter

Pete Tomao
He even has a horn to help welcome the different speakers

Rev Butler
Let’s give him a round of applause. I don’t even see him now. Where are you Eustace?

Eustace
Right here

Rev Butler
All right.

Pete Tomao
And this is a snapshot of the myriad topics that are covered. It’s pretty comprehensive.

Rev Butler
You want to look at when you’re doing your research, the violations, but CO’s certificate of occupancy, any complaints, what’s the police statistics, crime statistics, fire to response time

Eustace
Now I want you to understand the insurance coverages that every house, apartment owner and renters should know about

Pete
The speaker who really captures my attention is Willie Suggs, a Harlem real estate broker, she captures it with statements like this.

Willie Suggs
You tell your broker look I do go to hell and back and you get me that property.This is war. This is not a time to be nice because everybody that’s on this call. Say you’re all pre-approved at 300,000. Why would you spend that? If you don’t have to always spend less? That’s what rich people do.

Pete
Homebuying in NYC seems like it is a bloodsport. And I guess realtors take on a persona closer to a UFC fighter.But if the war metaphors seem out of place, close to the end of class Rev Butler doubles down on Willie’s advice.

Rev. Butler
Like Willie said, this is a war. This is a war you’re going to need. This is why I say spend less than $10 a week and do budgeting budget down to the penny.

Pete
Buying homes in NYC is not for the faint of heart. But in my earlier calls with Rev. Butler, he references the HDFC program or housing development finance corporation. They’re income restricted co-ops building set aside for low to middle income people. Both Willie and Rev Butler bring it up in class.

Rev Butler
HDFC is probably the best solution right now for low to moderate buyers

Pete
I come to find out Willie is referred to as the the Queen of Harlem Real Estate. And in 2008 New York Magazine did a whole profile about her. The article described her as “the most successful and reviled real-estate broker in Harlem”.

Pete
I reach out to Willie and we agree to meet in Harlem for the day. I want to tour some HDFC’s and learn more about what it takes to buy in NY. The first place we meet is a 4 bedroom apartment listed for $600,000. An individual can make up to $154,000 and qualify for the unit. It’s big but needs some updating.

Willie
So people call and say, ‘oh, Ms. Suggs I want to buy a house but you brokers have the houses in Harlem up to $4 million’. First of all, I didn’t do it. Nobody puts a gun to anybody’s head to make them pay what the owners are asking. You don’t have $4 million for a four bedroom home. I get it. You can buy this. This is a four bedroom apartment ,it’s listed at $600,000. That means all you people out there can actually afford it.

Pete
That was one of the things I wanted to talk to you about. This is a controversy over that program. A lot of people have a lot of opinions on it. I’m so sorry. It’s controversial because they don’t know what you’re talking about.

I’ll describe part of what has made the program controversial. Each HDFC has different rules about income limits and asset limits. Many allow gifting. Where one family member can purchase a unit for another family member. In practice, a recent college grad making 40K can have their rich dad buy them a seriously discounted condo.

Pete
Willie emphasizes the different grant programs available to potential buyers. And the a key issue for is folks just don’t know what assistance is available to them.

Willie
That’s why our ads for all the apartments say there are these grants available. It’s free money! As long as you live in the property for 10 years, you don’t pay the grant back.

We also talks about knowing how to search for HDFC units, what databases are available. Listings are scattered several databases. And you have to be persistent.

Willie
We were talking earlier about all the ‘oh there are no apartments’ there are 103 just listed on StreetEasy alone, up to four bedrooms that are income restricted that are available now. But people don’t know how to search a lot of us, especially the independents. We don’t belong to the Real Estate Board of New York for a bunch of reasons. So our listings are not going to be there.
So if you’re trying to find where all the listings are, there is no one place.

Pete
When we were talking about what it takes to buy in New York. And you laughed. And you said patience? Yes. From that little anecdote there, it seems like you’ve got to know where to look, how to look. It’s not easy though.

Willie
Well, anything worth having is worth fighting for.

Pete
I bring up issues related to affordable housing, gentrification and structural barriers to homeownership. This is where Willie has some of her spicer takes.

Willie
Nobody’s being forced out. The problem with you, young people is you think you’re supposed to go on every Friday night and you’re supposed to Uber here and you’re supposed to have Uber eats.

Your priorities are all screwed up. And with black folks. And I can say this as a black person, when Ms. Thing goes to get her hair done, she doesn’t complain about $300 to get all those braids. When the guy goes and buys that the $500 sneakers, he’s not going to complain well, he got to have the newest one. Your priorities are what they are.

If your priorities is the $300 for the braids and the $500 shoes, then you’re never going to own anything.

Pete
When I suggest the idea of guaranteed housing or housing as a right. This was her response.

Willie
Then I would have Denzel Washington, cause there’s a right. That’s my ideal man. No. You, you shouldn’t be given anything.

Pete
My conversation with Willie returns to her earlier refrain of what it takes to achieve homeownership in New York. Fundamentally, she believes there’s a pathway to homeownership for anyone who will fight for it.

Pete
You don’t feel, you have to be privileged in today’s New York to access

Willie
Privilege always helps, you know, but you don’t have to be. I mean, the folks, 98% of the people we talked to, they don’t have daddies with money to give them money. They’re doing it themselves.

So I do connect with someone who is trying to do it themselves. This is Brooklynite Erik Nilsen.

Erik
That’s why I wanted to buy something to begin with. I’m so tired of moving. I’ve lived in New York city for most of my life. I’ve been renting for all of it.

Pete
And here’s Erik on why on homeownership is so important to him

Erik
Just feeling stable. Um, not having to look for housing all the damn time and finally be able to like, I dunno, place myself in a neighborhood, which I’ve never really been able to do

Pete
On paper, Erik is not who’d you expect to have a problem buying a home. He has a graduate degree, savings, a job at Freddie Mac, and a $600,000 budget. But he’s on the losing end of the housing shortage. And his housing saga has had a lot of starts and stops.

Pete
So how frustrating has this process been overall?

Erik
Extremely frustrating, extremely frustrating. And I have, I’m a person of privilege and I have money. And it’s still extremely frustrating.

Pete
Pre-pandemic Erik began looking at a co-ops in Downtown Brooklyn, they are are a bit cheaper than condos. And the building he was looking at required a lot of extra savings to move in and they wouldn’t disclose how much that number should be.

Erik
Co-ops can require up to even three years worth of. mortgage and maintenance payments in the bank. In addition to the 20% you’re putting down.

Pete
The co-op didn’t work out and then he lost his job right before before Act 1 of COVID. Now working at Freddie Mac, he makes just over the cap needed to qualify for an HFDC’s, so that program is not an option. He re-started his home buying search last year.

Erik
And then I started realizing, Hey, wait a minute. There’s all these really good deals and are disappearing. I guess I have to act now.

Pete
He starts looking in earnest and true to form the NYC housing market is nuts.

Erik
I looked at this condo in Crown Heights that turned out to to be below street level, the entire thing. Not, not like say the first floor was above street level. And the restaurants from, now to get down to the apartment, go to the building and you walk downstairs. The entire unit was below street level and the bedroom faced the parking lot. $600,000.

Pete
In November he lands on a new development in Bushwick, that fits his budget and comes with some financial perks. But inking the deal is not as straightforward.

Erik
So I put an offer down on this condo on 1206 Putnam Avenue in Bushwick. It’s a really cool deal. Really good deal. Um, and it was too good to be true.For a new development in New York city, you have to have at least 50% of the units and contracts in order for you to start closing. So three months they’re off the market or, well, three and a half months, and they haven’t been showing anything.

Pete
He hits a lot of speed bumps. They developer won’t give him a closing date that he needs to secure a mortgage commitment. That almost costs him his $60,000 deposit.

Erik
So I ended up, my lawyer shook his phone tree and founded a mortgage broker that was able to help me and get me a commitment. And get me across the line with about a day to spare.

Pete
As of the end of April, he is left languishing watching interest rates creep up–despite going into contract in November. And the developer still hasn’t hit the 50% threshold. But can’t walk away due to his large deposit. It’s a quagmire but he’s not giving up on NY yet.

Pete: Have you thought about moving out of the city? Or are you still trying to make it work here?
Erik
I don’t really have a choice. All my family’s here.

Pete
But I get a text from Erik a few days ago, about a month after that last conversation. And he says he has an update.

Pete
The audio doc is actually due tomorrow evening. So, it’s kind of worked out nicely that I can add, hopefully what sounded like a happy ending into this story.

Erik
Um, not quite. So I went to the, so I, I wasn’t getting answers from anybody. I decided to go to arrange, to go to an open house in the building posing as a prospective buyer.

Pete
Erik posed as a buyer at the building where he’s under contract for a condo. The seller at the open house said that potential buyers should be able to get closing dates very quickly. When Erik had his lawyer follow up with the developer, they said that was not true. So he’s still in the lurch, waiting for something to happen. But now he has to focus on his more immediate living situation.

Erik
My landlord is looking for me to confirm renewal by the end of this month. I don’t know what to tell them, obviously. Honestly.

Erik
Is your, is your rent going up? Oh yeah. Yeah. Just a bit.

Pete
He had a pandemic deal and says his rent is going about 25%.

Erik’s saga gets me thinking maybe luck, privilege and patience shouldn’t be the reasons someone gets a home or not.

It’s a beautiful sunny day in Brooklyn and I look out my window toward a colorful mural that depicts the immigrant struggle in New York. This is a place shaped by waves of people carving their dreams into the city streetscape. Housing is not just about cement buildings, it’s about people.

Maybe where we live shouldn’t be just an investment vehicle.And we should have housing as a home. And the things we love most about our NY neighborhoods are not created by bidding wars over brownstones. People make the neighborhood, People make the city. And maybe we should have a housing system, that centers those people and their dreams, not investors profit margins.