2008-12-19 / Editorial/Opinion

A Housing Goal That Rockaway Cannot Afford

Community Board 14 District Manager Jonathan Gaska knows the real deal. He recently told MSN.com, "The last five or six years, we've seen an unprecedented housing boom. Homes were selling all over the Rockaways, and then last year the music stopped. And, when the music stopped, many of the private developers didn't have a chair." The article, written by David Koeppel, went on to say, "An economic boom for one of the city's poorest areas has turned into a bust, with hundreds of units sitting empty and potential buyers on the sidelines, unwilling or unable to make purchases." While Arverne By The Sea sales continue to be strong, sales in communities such as Bayswater, Edgemere and Rockaway Park have fallen off precipitously. Rockaway, of course, is caught in the same trap as thousands of other communities across the nation. We are the victim of both the greed of Wall Street and the wrongheaded idea that everybody has the right to a house, whether or not he or she could reasonably pay for it. There is little doubt that the greed of Wall Street and the companies that rated the worthless bonds as first class are primarily responsible for the present housing crash. There is plenty of fault left over, however, for those who pushed the lending agents to make imprudent loans in the first place. This chiefly occurred under the Community Reinvestment Act, which passed Congress in 1977. That law mandated that banks and other lending institutions do more in poor and minority communities. In 1995, the Clinton administration put in tough new regulations under the act, requiring banks that wanted an "outstanding" rating to demonstrate, numerically, that they were lending both in poor neighborhoods and to lower-income households. Banks were now being judged not on how their loans performed, but on how the number of loans they made. An intent to provide housing for lower-income households turned into a reality that provided loans by the tens of thousands to people who had no rational hope of every repaying them. By 2005, the Department of Housing and Urban Development demanded that nearly half of all loans made

under its programs go to low-income households. So was the genesis of our present housing crisis. Now, we have a new president and a new Secretary of Housing and Urban Development, a New Yorker who bought into the HUD program lock-stock-and-barrel. We believe, however, that the rationale for loans has to be changed. We believe that everybody has the right to affordable housing, but that should not mean the right to a home when its mortgage cannot be paid. Giving a $500,000 mortgage to a family earning $30,000 a year has led to our downfall. Let's not continue the charade. Rockaway has already begun to be impacted by the lack of housing sales. Some developers have begun to rent the empty units to Section 8 low-income and homeless persons, destabilizing neighborhoods. "By guiding [low-income and homeless] to this community, they're creating de facto housing projects," Gaska said. "These houses were built in the last two years, and they already look like they're 15 years old. Many of the residents don't have jobs. It is destabilizing the neighborhood." We don't need any more of that in Rockaway.

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