Predatory Equity and Affordable Housing in NYC

By Desiree Fields

From 2010-2012, I was conducting fieldwork in New York City, focusing on an aggressive wave of private equity investment in the city’s rent-stabilized housing market during the mid-2000s housing boom. Readers may be familiar with this trend through the story of Stuyvesant Town, a complex consisting of nearly 10,000 apartments in Manhattan: in 2006 Tishman Speyer and BlackRock purchased Stuyvesant Town for more than $5 billion, then rumored to be the largest real estate transaction in U.S. history. Soon, stories of harassment and illegal rent increases affecting long-term tenants occupying rent-stabilized units began to emerge. By 2010, in the aftermath of the global financial crisis, Stuyvesant Town’s new owners defaulted on the mortgage. The default highlighted how their aggressive investment strategy, which partially depended on converting rent-stabilized units at this middle-class stronghold to market rate rents, unraveled in a dramatically changed global investment context.

Stuyvesant Town in New York City. (Photo Credit: David Shankbone CC BY 3.0

What readers may not be aware of is that the story of Stuyvesant Town is not unique: close to 10% of the city’s million or so rent-stabilized apartments were affected by similar investments in the mid-2000s. Private equity firms assembled large portfolios of aging multi-unit buildings in poor, predominantly Hispanic and African-American neighborhoods, primarily in upper Manhattan, the west Bronx, and southeast Brooklyn. Investors paid inflated prices far beyond what the net rental income could support, expecting to increase returns by ‘releasing’ apartments from rent stabilization and onto the open market, or simply flipping the properties to another buyer. The investments were soon dubbed “predatory equity” as new owners harassed and defrauded tenants to realize their strategy.  However in the global financial crisis that soon followed, many of these deals went into foreclosure as the debt service proved unsustainable, the credit crunch prevented refinancing, and falling prices made it difficult to deleverage by selling off assets.

The case of predatory equity highlights how the urban fabric has become a key object of financial capital accumulation, and how financial actors, processes, and imperatives now penetrate everyday life in this process. But cities are also sites of resistance, and in this article I was interested in how community-based organizations sought to contest the financialization of urban space and re-assert the social value of rent-stabilized housing for the city’s low-income residents. This is an important question because of the direct implications that predatory equity had for tenants. It is also an important question because the broader arc of urban scholarship on community-based organizations and community development corporations often emphasizes how the practice of such groups has grown depoliticized and co-opted by the state and the private sector after decades of neoliberal ideology and governance. With this research, I wanted to explore the political possibilities for community practice in an urban context characterized by predatory capital flows. The challenges associated with this context are markedly different than those posed by the urban disinvestment that so many community groups developed to address.

The findings reported in this article highlight the role of alternative knowledge production and reworking financial sites, spaces, and structures as key strategies for contesting financialization. The former encompasses both rhetorical tactics that sought to de-naturalize market logic and chart alternatives, as well as data-driven tactics designed to produce quantitative and geographic knowledge about predatory equity and its consequences for tenants and neighborhoods. The latter entailed innovative use of financial artifacts and the dynamics of liquidity and fixity as a means of extending community practice beyond urban space to the realm of finance. A significant amount of research since the 2008 crisis has addressed the impacts of financialization. Such work is vital. But as financial capital continues to colonize homes and neighborhoods in the wake of the crisis, it is just as crucial to remember that this process is not given: financialization is fragmented, incomplete, and contradictory, and therefore contestable, as I have shown in this research.

The full article, Contesting the Financialization of Urban Space: Community Organizations and the Struggle to Preserve Affordable Rental Housing in New York City, is accessible without a JUA subscription for a limited time as part of the May 2016 Virtual Issue on Global Urban Change.

Desiree Fields is Lecturer in Urban Geography at the University of Sheffield. She tweets about cities, finance, housing, data and technology, and more at @fieldsdesiree.

Urbanization, Land Development, and Land Financing: Evidence from Chinese Cities

By Lin Ye and Alfred M. Wu

China’s urbanization is significant worldwide. The country’s urban population proportion increased from 18 percent in 1978 to 51 percent in 2011. It is estimated that the urban population in China will exceed 60 percent in 2020 and 70 percent in 2050. This unprecedented urbanization process is characterized by under-urbanization of population and fast urban land expansion. After the fiscal relation between the central and local government dramatically altered after an important tax reform in 1994, local governments in China had to look for additional revenue sources that are not controlled by the central government and to capitalize on the land over which they have powers of expropriation, allocation and conveyance to finance urban services and development projects. Under local governments’ strong drive to expand urban land, built-up areas in Chinese cities almost doubled from 1996 to 2000.

Existing literature has tried to build the conceptual framework of such a land-centered urbanization process but limited empirical studies have been able to assess the impact of land financing (leasing) on China’s urbanization with a nationwide sample. This study fills this gap by analyzing the panel data from 1999-2009 for all 286 prefecture-level cities in China. Fixed-effects, random-effects and two-stage least squares estimations are run to test the driving forces of urbanization in China. The findings reveal that land financing, measured by different indicators, significantly contributed to land urbanization in China. Economically stronger cities with higher real estate investment more aggressively pushed for land urbanization. Extracting economic benefits from land development has become a dominant character of China’s urbanization.

(Shanghai. Photo credit: Jacob.jose CC BY-SA 3.0

It is important to realize that urbanization is a multi-dimensional phenomenon. China’s urbanization is even more unique in terms of its speed, scale and government-driven nature. The true purpose of urbanization should be improving the living standard but not revenue generating. It is suggested that urbanization can truly serve its justified goals only if fiscal and political relations between central and local governments can be adjusted. China’s urbanization will continue to be the most significant event affecting the world development. But only when its drives and goals are justified can urbanization be more desirable and sustainable in the long run.

The full article is accessible without a JUA subscription for a limited time as part of our Virtual Issue on Global Urban Change.


Lin Ye is a Professor in the School of Government at Sun Yat-sen University. Alfred M. Wu is an Assistant Professor in the Department of Asian and Policy Studies at the Hong Kong Institute of Education.

Book Review Preview: Blaming the Poor

By David Imbroscio

Susan D. Greenbaum, Blaming the Poor: The Long Shadow of the Moynihan Report on Cruel Images About Poverty (New Brunswick, NJ: Rutgers University Press, 2015). blaming the poor

The Moynihan Report’s “regrettably durable impact” on “race relations and social policy in the US, with an emphasis on the humiliating image the report cast of poor black families and the misleading explanation for where poverty comes from” serves as backdrop for Susan Greenbaum’s wonderfully engaging new book.  The book also is a professional memoir of sorts, discussing aspects of her long and productive career as an urban anthropologist and steadfast poverty warrior.

The best way to read Greenbaum’s book is as an extended critique of the liberal perspective on urban poverty.  While she offers some passing criticisms of neoliberals and conservatives, her main targets are New Deal/Great Society liberals (whom she characterizes as “otherwise sensible people” who hold “disingenuous, distanced, and delusional beliefs” about poverty).  Naming the names, she writes:

From the eugenics enthusiasts of the early twentieth century (which included an embarrassing number of social liberals) to … eminent researchers like William J. Wilson, Douglas Massey, and Robert Sampson who proudly declare their liberal bona fides, the implication that poor people are incapable of or not ready for … any real say in decisions that affect their lives and futures, reflects a set of assumptions that conform rather directly to the tangle of pathology meme.

Also called out are bastions of liberal thinking such as the Urban Institute, as well as liberal concepts like “neighborhood effects” and (ostensibly “enlightened”) liberal “social engineering” as best illustrated by programs like Hope VI and MTO.

While it is well understood that neoliberal and conservative views on urban poverty are bankrupt, her book helps us understand why liberal views are perhaps equally so. For teaching purposes, juxtaposing her critique with the near-hegemonic liberal view affords students the opportunity to assess their relative merits rather than presenting the latter as unchallenged dogma.


David Imbroscio’s full JUA review of Blaming the Poor: The Long Shadow of the Moynihan Report on Cruel Images About Poverty is available in Early View.

David L. Imbroscio is a Professor of Political Science and Urban & Public Affairs at the University of Louisville.


By Robert Silverman, Professor, University at Buffalo
Kelly Patterson, Associate Professor, University at Buffalo
Li Yin, Associate Professor, University at Buffalo

Our article, “Dawn of the Dead City” was first published in the Journal of Urban Affairs (JUA) in 2013. It was recently resurrected in the May 2016 virtual issue of the journal. The article examined residential vacancy patterns in Buffalo, NY between 2008 and 2010. One of the main foci of the article was to refine approaches for measuring housing vacancy and abandonment in order to gain insights into the neighborhood effects of derelict property. This was accomplished using: HUD Aggregate USPS Administrative Data on Address Vacancies, the American Community Survey (ACS) five year estimates, housing choice voucher (HCV) records, and municipal in rem property records. Multivariate analysis identified significant relationships between vacancy patterns, socio-economic characteristics, and institutional factors.

Through this analysis we identified a new type of derelict property unique to older core cities, which we labeled zombie properties. The defining characteristics of these properties are long-term vacancy and abandonment in segregated neighborhoods experiencing sustained population loss and socio-economic despair. We also observed that the clustering of zombie properties had a contagious effect, putting once vibrant neighborhoods in a state of perpetual dystopian limbo.

Since the publication of the article, the zombie nomenclature that we helped pioneer has gained currency across academic and mainstream media outlets. Our article has been cited in: Housing Policy Debate, Cities, Progress in Planning, and other peer reviewed publications. Google searches for “zombie properties” return headlines in media outlets like the: New York Times, Chicago Tribune, Huffington Post, Milwaukee Journal Sentinel, and Christian Science Monitor.

Ironically, we also observed that neighborhoods overwhelmed by zombie properties buttressed others in the urban core that have become centers for eds and meds revitalization. There is growing recognition that anchor-based revitalization strategies in core cities have not fully addressed growing inequity in society. Increasingly, scholars have come to the conclusion that some of these efforts have actually aggravated inequality and promoted the emergence of a polarized spatial landscape where nodes of revitalization are surrounded by neighborhoods that have been overrun by zombie properties.

We believe that “Dawn of the Dead City” helped prompt a broader discussion of the relationship between segregation, socio-economic inequality, and the landscape of property abandonment in the contemporary city. The resurrection of the article in the May 2016 JUA virtual issue promises to expose a broader audience to this pivotal analysis.

The May 2016 Virtual Issue on Global Urban Change is available on the web, with articles accessible without a JUA subscription for a limited time.

JUA Virtual Issue Available: Global Urban Change

Our latest Virtual Issue has been released! Each Journal of Urban Affairs Virtual Issue features previously published content related to one pressing or noteworthy theme. The topic of our May 2016 Virtual issue is Global Urban Change.

The transition from the 20th to the 21st Century has been characterized by processes of rapid urban change, including unprecedented population growth and decline, urban intensification and suburbanization, and major socio-demographic shifts in the spatial structure of cities. This virtual issue of JUA presents innovative theoretical and methodological scholarship examining the physical and social transformation of cities in a global context. It contrasts the conditions of growing and declining cities in the West, explores the unprecedented expansion of Chinese and other Asian urban regions, and examines urban (re)development processes in the neoliberal era, including sociospatial conflicts and struggles over the right to one’s home and neighborhood.

We are excited that some of the authors from this virtual issue have agreed to write blog posts related to their articles, so look for that in the coming days and weeks!

These articles can be accessed without a JUA subscription for a limited time.

Is Detroit Dead?
Peter Eisinger

Urbanization, Land Development, and Land Financing: Evidence from Chinese Cities
Lin Ye and Alfred M. Wu

Suburbanizing Disadvantage in Australian Cities: Sociospatial Change in an Era of Neoliberalism
Bill Randolph and Andrew Tice

Dawn of the Dead City: An Exploratory Analysis of Vacant Addresses in Buffalo, NY 2008-2010
Robert Mark Silverman, Li Yin, and Kelly L. Patterson

Victims or Victors? The Effects of Forced Relocations on Housing Satisfaction in Dutch Cities
Hanneke Posthumus, Gideon Bolt, and Ronald Van Kempen

Castles in Toronto’s Sky: Condo-ism as Urban Transformation
Gillad Rosen and Alan Walks

The New Face of Peri-Urbanization in East Asia: Modern Production Zones, Middle-class Lifestyles, and Rising Expectations
Douglas Webster, Jianming Cai, and Larissa Muller

Contesting the Financialization of Urban Space: Community Organizations and the Struggle to Preserve Affordable Rental Housing in New York City
Desiree Fields