In this reflection, you’ll hear from a Fellow on lessons learned from the Urban Design Study Trip to Copenhagen.
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By Alison Novak
Neighborhood Pillars, SARA, Mix-and-Match, GHPP, Year 15… A myriad of term sheets is a key characteristic of financing affordable housing in NYC. In sharp contrast, in Copenhagen (and all of Denmark) there is simply Landsbyggefonden. It may have as many consonants as we have term sheets but is considerably simpler. Translated as the National Building Fund, the LBF is a closed-loop, self-financing system that produces and maintains Danish ‘public housing’.
In Copenhagen, public housing is mixed income, high quality and well-maintained, lacks stigma or income-means testing, and has an intentionally democratic decision-making structure led by tenants.
The LBF is a private entity that is regulated by law and sources its funding from rental payments made by the residents. Project capital stacks have 3 sources: 2% tenant lease deposits, 10% LBF interest-free loan with 50-year repayment, and 88% through a “normal” mortgage that is guaranteed by the municipality. Rents are set based on the construction cost, which is in turn limited by LBF regulations. (Individual household rent subsidies are provided separately, as necessary.) Once the mortgages have been repaid, profit accumulates with the LBF and forms the basis of the interest-free loans for new buildings, on-going maintenance and social programs throughout the national portfolio of public housing. The national government makes a political agreement every four years with LBF determining how much of its treasury it can spend out. Because of the widely shared belief in housing for all, this process is significantly less dramatic and traumatic for all involved than in our nation.
While Denmark is smaller and less racially and ethnically diverse than NYC, we share common challenges balancing equitable policy with community-determination. They too value mixed income and diverse communities, and are experiencing the perils of focusing on integration and the resulting physical and/or cultural displacement. At present their Parallel Communities Act is under the scrutiny of an EU court for being discriminatory. The Act is not so dissimilar from controversial programs here, some ended like NYCHA’s Build-to-Preserve or the federal program HOPE VI. Nor is it entirely different from on-going, and better calibrated for equity, programs like NYC’s Mandatory Inclusionary Housing or the federal program Choice Neighborhoods. All of these are policy-driven efforts to change how and where people live, with differing approaches and outcomes.
While one in 17 NYC residents live in NYCHA (our nation’s largest landlord), one in 5 live in Danish public housing. It is commonplace to add your child’s name to the wait list in the hope they get a spot in the next twenty years. In that – the shortage of desired housing – we have much in common with our Danish friends!