In a significant development for affordable housing tenants in New York City, Mayor Eric Adams is set to announce a new pilot program that will allow these residents to apply their rental payments to their credit scores. This initiative aims to facilitate a path toward homeownership for many who are currently renting.
The program, which will be launched by the Department of Housing Preservation and Development (HPD) in collaboration with the Housing Development Corporation (HDC) and the rent-reporting platform Esusu, will benefit around 500 households financed under HPD and HDC within the next 15 months.
As per HPD Acting Commissioner Ahmed Tigani, this innovative program seeks to enhance the financial well-being of low-income families often marginalized by traditional credit systems. “This is a concept that I think people in housing policy circles who were concerned about how to connect vulnerable families, families with limited access to credit, to greater opportunities, financial products to improve themselves and their families,” Tigani stated.
Tigani emphasized that the program is designed to be easy for property owners to engage with, thus increasing opportunities for renters to gain greater control over their financial futures.
Higher credit scores can offer renters many advantages, including access to lower mortgage interest rates, reduced insurance premiums, and better credit card offers. Unlike loans or mortgages, however, consistent rent payments typically do not contribute positively to individuals’ credit scores. This gap underscores the necessity for systems that recognize rental payments as valuable contributions to credit health, particularly for the vast majority of New Yorkers who rent.
According to city data, 69% of New York City households are renters, and more than half of the rented units fall under some form of affordable rent regulation. The disparities within homeownership statistics are alarming, as only 41% of white families own homes compared to 26% of Black families and 18% of Hispanic families.
Moreover, credit scores reveal stark racial disparities, with communities of color facing suboptimal scores at rates 2.6 times higher than their white counterparts, according to the Urban Institute.
Mayor Adams highlighted the urgency of this program in a statement, emphasizing its importance for Black and Brown New Yorkers navigating the complex journey from renting to owning a home. “Too many of our city’s residents, especially Black and Brown New Yorkers, are still struggling to make the jump from renter to homeowner and build generational wealth,” Adams remarked. He further asserted that this initiative will broaden opportunities for homeownership and contribute to making New York City a more affordable place for families.
A similar pilot program conducted in Colorado from 2021 to 2024 showed promising results, with participants experiencing an average increase in their credit scores by 62 points. This success story serves as an encouraging precedent for New York’s upcoming initiative, as pointed out by Tigani.
The Adams administration has explicitly focused on promoting homeownership as part of its affordable housing strategy, which experts believe is essential for building generational wealth and addressing economic inequality in the city. The new rent credit reporting program will operate under the umbrella of the “City of Yes for Families” initiative, which aims to improve living conditions and encourage affordable housing solutions.
Eric Enderlin, President of HDC, stated that this program is expected to break the cycles of poverty and income inequality that many low-income households face. He remarked, “Traditional methods of calculating credit scores have contributed to barriers faced by low-income households when seeking a safe, stable and affordable home — further perpetuating cycles of poverty and inequality.”
Enderlin added that this partnership with HPD is an essential step towards expanding access to the affordable housing supply in New York City, thereby enhancing the economic mobility of its residents.
Tigani credited the commitment from the Adams administration towards affordable housing for laying the groundwork for this pilot program. He expressed that the rollout of such initiatives is a testament to the city’s commitment to supporting low-income residents in meaningful ways.
“Every time we’re able to launch a new project like this and have a baseline of a fair housing plan to go from, it’s a good reason for why the work is valuable,” Tigani concluded.
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