Jennifer Kopp decided early, when she was a child growing up in public housing in the Sheepshead Bay neighborhood of Brooklyn, that she would be the first in her family to own a home.
This fall, that goal appeared to draw closer: After more than 20 years of renting, Ms. Kopp was approved for a program that would help cover a down payment if she found a place by December.
The city-run program, called HomeFirst, is designed to provide a loan of up to $100,000 to first-time buyers who are New York City residents with limited incomes. A family of four that earns less than about $106,000 could qualify, and the loan may be forgiven, if the recipient keeps the home as a primary residence, among other requirements.
But Ms. Kopp, 42, a teaching assistant with a young son, soon ran into problems. Prices were beyond her reach, pushed up by a pandemic buying frenzy that left very few homes on the market. Interest rates, at their highest level in two decades, made mortgages too expensive. Ms. Kopp, who earns about $45,000 a year at a public school in Brooklyn, may need to borrow against her retirement funds or abandon the search.
“It makes a person who is living paycheck to paycheck, trying to just achieve a little slice of what they once would have called the ‘American dream’ — it’s making it literally impossible,” she said.
Affording a home has grown increasingly difficult for many Americans, given these widespread housing shortages and economic swings. But the challenges can be at their most extreme in New York City, where residents like Ms. Kopp may have to postpone the dream indefinitely.
The city’s homeownership rate of just over 31 percent, which is about the same as the figure from 2011, is roughly half the nationwide number and less than nearly every other major American city. Between the second quarter of 2019 and 2022, as the typical home price rose to nearly four times the median family income nationally, the price of a home in New York City has remained more than nine times that level, according to the Federal Reserve Bank of New York.
The situation is reinforcing worries about the city’s long-term health: As home owning becomes even more out of reach, racial wealth disparities could be exacerbated and more middle- and working-class families could be driven out.
“It’s one of those hard, difficult problems that we have to tackle, or else we’re going to end up with a city that’s only affordable to the very, very wealthy,” said Christie Peale, the chief executive and executive director of the Center for New York City Neighborhoods, a nonprofit group that pushes for affordable homeownership.
The city’s large proportion of renters mirrors other cities and reflects the “huge flows” of people coming and going, especially young and transient people attracted to the city’s job opportunities and cultural life, said Mark Willis, a senior policy fellow at New York University’s Furman Center.
“Homeownership makes less sense if you’re not there for the long run,” he said.
The homes that do get built tend to be more expensive because of high land and development costs, said Jonathan Miller, the president of Miller Samuel, a real estate appraisal and consulting firm.
Nearly everything is more costly now, in large part because of the city’s housing shortage. But the economic and social fluctuations during the pandemic have made the situation worse.
“You had a huge run-up in home prices, compounded with a huge run-up in interest rates,” said Laurie Goodman, an institute fellow and founder of the Housing Finance Policy Center at the Urban Institute, a nonprofit research organization. “The result was a huge increase in un-affordability.”
The income required to afford a home in, for example, the middle-third of the New York City area market in September 2019 was about $117,450, assuming a 30-year fixed rate mortgage, according to an analysis by the Harvard Joint Center for Housing Studies. That jumped more than 59 percent to almost $187,000 in September 2022.
Frederick Ferby Jr., 33, grew up with his mother in an apartment in the Rockaways in Queens, which had recurring pest and other problems. His father struggled to maintain and pay off the loan for a house in Jamaica.
Those experiences influenced Mr. Ferby’s choice of where to buy a home.
An IT engineer, he pays a below-market monthly fee of around $700 for an apartment in Fort Greene, Brooklyn, and could afford a monthly mortgage of around $2,000. He looked at some places in the Bronx that fit his price range, but none felt large enough for the price.
“To find something decent, at least in the boroughs, it’s difficult,” he said. He is now considering moving to New Jersey.
Mayor Eric Adams has made boosting “affordable homeownership” — and trying to bridge the racial wealth disparities — a key piece of his housing agenda. The homeownership rate for Black residents is roughly 27 percent, and for Hispanic and Latino residents it is roughly 17 percent, well below the 42 percent rate for white New Yorkers.
When the mayor announced his housing plan earlier this year, he said he wanted to “put the dream of homeownership back in the hands of working people and remind New Yorkers that leaving this city isn’t an option.”
It is unclear if Black and Latino home buyers have been hurt or helped by recent shifts in the market. Some data show that in New York State and nationwide, the homeownership rate for Black and Latino renters increased between 2019 and 2021, probably in part because of low interest rates at the beginning of the pandemic.
In the most recent fiscal year, the city spent $9 million helping people make down payments and helped finance renovations for more than 120 one- to four-family homes, as part of a broader focus on homeownership.
But the efforts still fall short of the kind of transformative public investments that could meaningfully increase the rates of homeownership. Some advocates and politicians on the left are calling for a much higher investment and the creation of new forms of multifamily housing owned by tenants and neighbors or nonprofits.
There are trade-offs to government investments in homeownership, housing advocates acknowledge.
Because the cost of buying is so high, it means public dollars may not reach as many people as programs targeting rentals. Enabling people to build wealth essentially means a home has appreciated and is no longer as cheap as it once was.
“The challenge for government is: How do you invest in affordable homeownership in a way that’s affordable over successive generations?” Ms. Peale said.
Without additional assistance, owning a home remains out of reach for many.
Jewel Ghosh, originally from Bangladesh, came to New York City in 2014 because of its big immigrant population and robust public transportation.
Mr. Ghosh, a doctor, lived in an basement before moving into a two-bedroom apartment in Ozone Park, Queens, this summer. He now lives there with his parents, wife and baby boy.
He has searched for a bigger place to buy. But as a city health department employee making about $70,000 a year and supporting his entire family on that income, he said he cannot afford the $700,000 homes he sees on the market.
“It’s my personal opinion that there is no balance with the income and the expenses,” Mr. Ghosh said. “One of the basic needs — living — is very difficult.”
For Ms. Kopp, the teaching assistant, not being able to afford a home is one reason she dreams of leaving the city. But she is afraid of uprooting her life and that of her son.
“I have a city pension, I have health benefits and I have job security,” she said.
But she added, “I definitely would love to leave New York.”