In a long, interesting, article on the long term crash of gentrified New York condo housing its clear that the City is staring down the barrel of a huge crisis--first gentrification, helped with generous doses of government money and financial speculation; then overbuilding of overpriced luxury condos, destruction of neighborhoods, inability to finish units, and finally inability to sell units at all in a down market leading to wholesale abandonment of apartments. Why shouldn't the City wait until these buildings are in foreclosure, buy them at cut rates, and then run them as affordable housing? The article makes clear that the landlords will otherwise use the bubble and loose money to buy up buildings, evict tenants, and then sit on the empty buildings or abandon them and destroy whole neighborhoods for years to come. Right now the city seems to be trying to find some interim accommodation that induces landlords to turn some portion of these buildings over to "affordable housing" by, essentially, overpays the landlords for units they can't sell at all, puts low income tenants into them for a short period of time, and then allows the landlords to call them back off the affordable housing market by 2030. This seems doomed to failure since very few people who can afford these units want to live next door to people who are subsidized into the same housing so you are probably killing the private market at the same time that you are only artificially pumping up the affordable housing market. San Francisco seems to be working on a more interesting concept but focused on the land and not the housing stock itself.
In San Francisco, any project that gets a loan from the city has to sell its land to the city in exchange and then lease it back. Local officials came up with the idea because they were sick of pouring billions of public dollars into affordable housing only to see developers reap huge windfalls down the road. "If we don't do something for permanent affordability now, we're doomed to replace the units we've lost," says Olson Lee, who masterminded San Francisco's land-lease program. "We learned from our experiences. We asked: What can we do differently?"