NEW YORK—New York City could generate nearly $1 billion in long term household wealth each year for low and moderate income families by expanding affordable homeownership opportunities, according to a report released Aug. 4 by the Regional Plan Association.

The report, A Billion Dollar Blueprint: Closing New York’s Homeownership Gap, contends that while New York has invested billions of dollars in affordable rental housing, it has largely abandoned affordable homeownership as a public policy goal. Over the past 11 years, just 2% of the affordable housing developed through city programs was for homeownership, down from 20% between 2004 and 2013. Restoring that earlier benchmark could generate nearly $1 billion annually in long term household wealth, with more than half of that wealth accruing in majority Black and Latino neighborhoods.

Some key findings from the report include:

• New York City has the lowest homeownership rate of any U.S. city with more than 500,000 residents.
• By a four to one margin, renters in the region would prefer to own a home.
• Affordable homeownership has fallen from 20% of city supported affordable housing production to just 2% over the past 11 years.
• The price of starter homes has increased 87% since 2009, compared with just 5.6% for the most expensive 25% of homes.
• Restoring affordable homeownership to 20% of city supported housing production could generate nearly $1 billion in household wealth annually, with more than half of that wealth created in majority Black and Latino neighborhoods.

“New York has spent decades treating affordable housing almost exclusively as a rental strategy,” said Tom Wright, president and CEO of the Regional Plan Association. “That has helped countless families remain in the city, but it has also meant overlooking one of the most effective ways to help working families build wealth: homeownership. If we’re serious about expanding economic opportunity and narrowing the racial wealth gap, affordable homeownership has to become a much larger part of our housing strategy.”

The report comes as homeownership has become increasingly out of reach. Just 33% of New Yorkers own their homes, the lowest homeownership rate of any U.S. city with more than 500,000 residents and roughly half the national average, even though renters across the region say they would prefer owning a home to renting by nearly four to one.

The report finds that expanding affordable homeownership is about more than increasing ownership rates. Homeownership remains one of the strongest pathways to long term financial stability and wealth creation, yet the wealth gap between homeowners and renters has grown to $1.37 million nationally, driven largely by home equity. By creating more opportunities for first time buyers, particularly in neighborhoods with historically low homeownership rates, New York can help more families build assets while addressing longstanding racial and economic inequities.

The Regional Plan Association recommends modernizing tax incentives for homeownership, removing barriers to condominium development, expanding affordable homeownership programs, reforming taxes that disproportionately burden first time buyers and directing more ownership opportunities to neighborhoods where they have historically been scarce.