The Bronx fire shines a light on a failed approach towards affordable housing

In New York, some things never change. If you die in a fire, it’s always your fault. When a fire started in a heater and ripped down the hallway of an apartment building in December 1998, killing four people in a blast of heat and smoke, city officials framed the fire as a tragedy that could have been avoided if people had only remembered to close their doors. “People should close the door behind them when leaving a [burning] apartment,” said then-fire chief Daniel Nigro – now the city’s fire commissioner.

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Photograph: Seth Wenig/AP

“They would not have died if they had stayed in their apartments,” said the city’s then-mayor, the now-infamous Rudolph Giuliani, musing that it’s “easier to blame things on mechanisms rather than on what human beings understand, do or don’t do”.

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When a space heater torched a Bronx apartment building on 9 January and killed 17 people, making it the city’s deadliest fire in decades, New York’s brand-new mayor Eric Adams knew exactly what to say: “Close the door, close the door,” said Adams on Monday, the day after the fire. “Muscle memory is everything, and if we can drill that in, we can save lives by closing the doors, not only in the city but across the entire globe.”

Landlords run this town. They always have, and perhaps they always will. So it should come as no surprise that one of Twin Parks’ investors, Rick Gropper, is on the new mayor’s transition team – for housing, no less. Twin Parks is owned by a consortium of investors, including LIHC Investment Group, Belveron Partners, and Camber Property Group. Gropper cofounded Camber with Andrew Moelis, the son of one of New York’s top affordable housing developers; housing organizers call Ron Moelis the “gentrification king” of New York.

The building management was not at fault, Adams told the nation, on Good Morning America; the building only had “two violations that were outstanding in the last few years”.

Technically, the mayor was half right: as of Sunday, only two violations remained outstanding with the city’s Department of Housing Preservation and Development (HPD) – out of 13 violations total in the past year alone.

But a closer look at city records tells a different story. Over the past 11 months, Twin Parks North West racked up a litany of complaints to the city’s complaint line: no heat in 6K; broken pipe; broken or missing radiator; no heat; broken or missing door; electric wiring exposed; ventilator system missing; no heat or hot water in 6E; no heat in 18E; no heat in 6K; and the list goes on.

Gropper and Moelis deserve blame for their poor management of Twin Parks. But the real scandal is that in the landscape of New York City real estate developers, they are not uniquely evil. (After all, this is the world that brought us current Giuliani legal client and former American president Donald Trump.)

The Right to Counsel coalition, a group of tenant’s rights organizations, drew up a list of the city’s top 20 evictors during the pandemic. Compared to the others, many of whom specialize in affordable housing, Camber didn’t even rate. And this is perhaps the most stinging indictment of the city’s mega-billion-dollar affordable housing industry. “What exists in New York City, and what has existed in New York City for decades, is a culture of intentional neglect of low-income housing,” said Luis Henríquez Carrero, director of litigation at Legal Services of New York City, which every year handles about a thousand legal cases about bad living conditions in apartments.

Contrary to Giuliani’s 1998 musings, it is a lot easier to blame human beings than it is to blame mechanisms. But the real culprit in Sunday’s fire isn’t the mayor, or even the landlords. It’s something more abstract than a broken door, a space heater, or even a bad management company. The fuel for fires like the one in the Bronx is money – specifically, the flood of investment money that is pouring into so-called affordable housing from investors all over the globe.

“There are very few asset classes with more proven resilience and staying power than affordable housing, and competition for deals in the five boroughs remains extremely high,” Andrew Gendron of LIHC told The Real Deal last week – announcing his acquisition, in partnership with Camber, of a $68m portfolio in East Harlem.

Follow the money, and you will find a line from the broken doors and heaters to the big banks that finance affordable housing deals

That’s real estate for “there’s gold in them there hills”. The financialization of poverty – and specifically, of affordable housing – has created a gold rush. And when the money floods in, it changes neighborhoods in ways that don’t necessarily benefit people in buildings such as Twin Parks. Follow the money, and you will find a line from the broken doors and heaters in buildings all over the city to the big banks that finance affordable housing deals.

“When you make the decision to stop directly funding housing for the poor, and you decide to involve private entities to do it for you, then you introduce market forces into the process of providing affordable housing,” says Henríquez. “And those market forces have created an incentive on many of the landlords to neglect their properties for many decades, to where we see things like the tragedy at Twin Parks.”

The result of all this investment, as longtime Bronx resident Eileen Markey points out in a recent dispatch for the New Republic, is that many of the buildings in the Bronx are bearing mortgages worth much more than the net operating income (NOI) of the buildings can produce. Landlords who “bought up buildings at speculative prices, gambling on ever-increasing rents – and quite literally banking on the ability to oust low-income tenants – are faced with declining buildings they can’t afford to maintain and investors they are obliged to serve”, she writes.

This is the heart of the problem. If housing vulnerable people is an asset class – not a social good, or a human right – then generating returns for investors will always be in a zero-sum relationship with providing safe housing for those people. Landlords will always be in the middle; and when they’re taking sides, as they must in housing for profit, investors will always win.

“When housing is a commodity, and making repairs is a cost – and like any cost, it needs to be minimized so that profit can be maximized – no law changes that basic fact,” says Henríquez. “Providing safe and decent habitable conditions for your tenants falls on the cost side of your balance sheet. And so that already creates an incentive to do as little as possible. To keep that cost as low as possible.”

• Annia Ciezadlo is a journalist based in New York City