When Gentrification Teaches Social Housing to Want to Be a Condo: A Conversation With Jonathan Tarleton

In New York City, some of the most stable, deeply affordable housing ever built is being slowly taught to envy the condo next door.

Look at Southbridge Towers, a former Mitchell-Lama cooperative in Lower Manhattan. For decades, it functioned as what housing theorists dream about: permanently affordable, publicly supported, resident-controlled housing in the middle of one of the most expensive real estate markets on the planet. Then, in 2014, residents voted to privatize. They chose, as the headlines framed it, a “massive windfall.”

A decade later, some of the same people who campaigned for that windfall are quietly admitting that if residents “knew what they know now, privatization wouldn’t have gone through,” as resident and former anti-privatization organizer Chris Hresko told Jonathan Tarleton, author of Homes for Living: The Fight for Social Housing and a New Ethic of Ownership.

The story of that regret, and of a very different decision at another Mitchell-Lama co-op, St. James Towers in Bed-Stuy, is not just about two buildings or one flawed program. It is about what gentrification does to social housing: how rising land values and cultural displacement generate pressure inside these buildings to “cash out,” and how that pressure, if unchecked, destroys the very tool New York needs most to resist gentrification in the first place.

New York did not simply “fail” to preserve affordable housing. It actively created a structure in which publicly subsidized, limited-equity cooperatives sit like islands of stability in a rising sea of speculative value, and then gave residents the legal mechanism to convert those islands into private assets. Gentrification has become the story these buildings tell themselves about what homes are for.

The result is a quiet, legalized transfer of wealth and security out of the social housing system and into private hands, often the very hands that benefited from public subsidies to begin with.

Beyond the “Windfall” Story

When Mitchell-Lama privatization fights do make the news, they’re typically flattened into a familiar script: middle-income residents vote on whether to stay limited-equity or unlock six- or seven-figure gains by going market-rate. The story begins and ends with the choice to “take the windfall” or not.

Tarleton told me that when he first started following Southbridge and St. James, he assumed it might just be that story. It was only by following these debates over years, and watching how perspectives shifted before and after the votes, that he realized something deeper was at stake:

“I only started to realize that I thought it was a particularly interesting story with a lot of layers when I followed it over a number of years,” he said. “At first, it can look like just: people deciding whether to individually profit or not. But once I started teasing out questions like what ownership means to people, how they relate to public housing, whether they want to preserve this for a future generation because of their own experience with racial discrimination, then it became clear this wasn’t just a policy story. It was a very human story about people struggling with difficult decisions.”

That human story is precisely where gentrification enters. The decision to privatize is not made in a vacuum. It is made in neighborhoods where the ground has shifted under people’s feet—where apartments next door now rent for $5,000 a month, where new coffee shops charge $7 for oat-milk lattes, where long-time neighbors are visibly disappearing.

In those conditions, Mitchell-Lama residents confront a brutal, structural question: Are you content to go on being the “abnormal” building, deeply affordable, publicly subsidized, politically vulnerable, in a neighborhood where everything else has been redefined as a high-yield asset? Or do you want to get your piece of the action before it’s too late?

Gentrification as a Pressure System

Tarleton draws an important distinction between rising housing values and gentrification. Values can increase without large-scale displacement if strong protections exist for existing residents. But in New York, those protections are patchy, and gentrification and price escalation tend to move together.

Either way, the core dynamic inside Mitchell-Lama co-ops is the same: the gap between what residents paid for their apartments and what those apartments could fetch on the open market explodes over time. That gap is larger in gentrifying neighborhoods, where demand and investment pour in.

“At a basic level, what makes privatization attractive is just the dramatic increase in home values,” Tarleton explained. “You can buy in for $3,000 in the 1970s or $45,000 today, and then, if the building privatizes, turn around and sell that share for hundreds of thousands, even a million. There’s just a lot of money to be made.”

That possibility didn’t exist when the Mitchell-Lama program was created in 1955. The original statute assumed permanent limited equity. The “loophole” that allows co-ops to exit came later, in a 1959 change meant to spur rental development that was later misapplied to co-ops. Once gentrification set in across New York, that loophole became something far more powerful: an invitation to turn social housing into a one-time lottery payout.

The pro-privatization campaigns at Southbridge leaned heavily on this logic. Consultants produced optimistic projections showing that a “flip tax” on post-privatization sales, a percentage of each sale returned to the co-op, would more than cover the loss of property tax exemptions and other benefits. Residents were told they could enjoy both: a huge gain in personal wealth and a stable, well-maintained building.

“The future financial outlook is always the key point of tension,” Tarleton noted. “On the pro-privatization side, it’s presented in extremely rosy numbers. These units will sell like hot cakes. Flip-tax revenue will plug the gap. Housing costs might go up, but not for 10 or 15 years—you don’t need to worry about that now.”

Anti-privatization organizers, by contrast, spent years warning that those rosy projections were a gamble, not a certainty. They pointed out that if sales slowed, or if the real estate market turned, the co-op would be stuck with higher taxes and no reliable income stream to cover them. Their opponents accused them of fearmongering.

Then COVID-19 hit, and the “sure thing” flipped into risk almost overnight.

“When COVID hits, real estate sales in the city at least initially totally crater,” Tarleton said. “There’s a period where none of that flip-tax revenue comes back to the co-op and housing costs are rising. All of a sudden, the cost increases that people thought would happen in 15 years are happening in two. The risk the pro–Mitchell-Lama folks kept talking about is realized. People see: we’re not as stable as we thought, and I kind of regret it now.”

The irony is sharp. In chasing protection from gentrification by joining the market, Southbridge made itself more vulnerable to the market’s swings. Housing went from being a guaranteed, permanently affordable place to live to being, as Tarleton put it, an “expensive asset on your personal balance sheet” with an increasingly uncertain future. Residents could now say they were “worth” more on paper, but some now questioned how long they could afford to stay.

Two Buildings, Two Reactions to Gentrification

Southbridge Towers and St. James Towers are both Mitchell-Lama co-ops. Both faced privatization campaigns. Both sit in neighborhoods transformed by gentrification. Yet one chose to privatize; the other chose to remain social housing.

One key difference is how deeply residents felt embedded in, or estranged from, the neighborhoods around them, and how that shaped their understanding of what gentrification was doing.

At St. James, in Bed-Stuy/Clinton Hill, residents could literally watch gentrification displacing people who looked like them and had lived alongside them for decades. Long-time residents like Wenna Redfern described sitting on a neighbor’s porch and counting how many Black people walked by, disturbed by the fact that the number was now low enough to count on one hand.

“As you talked about,” Tarleton told me, “residents at St. James saw gentrification taking place, saw displacement of people who looked like them, who were their friends, who represented the preexisting culture of the neighborhood. That was a motivating factor to push back against privatization, even while some people wanted to take advantage of the value increase.”

In other words, gentrification in Bed-Stuy and Clinton Hill generated two opposing impulses. It made privatization financially appealing. But it also provided a daily, visible lesson in what happens when housing is fully handed over to the market: Black residents are priced out of neighborhoods they built and sustained, and the benefits of new investment accrue to newcomers and landlords, not to the people who endured decades of disinvestment.

At Southbridge, in Lower Manhattan, the pattern looked similar on paper, skyrocketing values, fancier shops, richer neighbors, but felt very different on the ground. Southbridge, designed as a self-contained complex with internal courtyards and services, was historically one of the few residential options in the area. Its residents, mostly white, experienced the new luxury buildings and upscale stores as an external world they didn’t belong to, not as a community they were already woven into. This made privatization feel like a way to “catch up” to the neighborhood’s new status and reclaim a sense of belonging through money rather than through place or relationships. It also meant that, unlike St. James residents who saw their fate bound up with neighbors being displaced, many Southbridge residents felt less compelled to view themselves as stewards of a broader community, and more as isolated households trying to survive an expensive city.

Tarleton argues that design and race both mattered here. Southbridge “felt like a place unto itself,” semi-detached from the surrounding neighborhood. Residents saw the luxury turn around them not primarily as displacement of people they knew, but as a kind of insult: they could afford to live in the building but not to participate in the amenities now advertised as “downtown living.”

“They felt like they couldn’t afford certain things in their own neighborhood,” he said. “What they strove to do was become more money themselves so they could feel a part of that, rather than asking, ‘How do we protect the people around us who might be displaced?’”

The same gentrifying forces— rising values, upscale consumption, new wealth—pushed St. James to defend its status as social housing and pushed Southbridge to abandon it. One building internalized gentrification as something to resist, the other as something to join.

Racial Justice and the Stakes of Preservation

If gentrification is the pressure system, race shapes who is crushed by that pressure and who is invited to profit from it.

Mitchell-Lama was, intentionally or not, a powerful racial-justice intervention. It offered Black and Puerto Rican families in postwar New York access to stable, affordable homeownership in neighborhoods where private lenders refused to lend or did so on predatory terms. It created intergenerational communities with elevators, neighbors, and relatives in the building, which is particularly especially important for elders and people with disabilities.

Today, where people of color are still able to remain in rapidly gentrifying neighborhoods like Bed-Stuy, Crown Heights, or Harlem, they disproportionately do so because of social housing, rent stabilization, or public housing. “If you look around the city at communities that are predominantly of color,” Tarleton said, “the reason people are able to stay put is because of places like this. If they can’t reap the benefits of new investments in those areas, investments they deserved and were denied for so long, then it’s just an ongoing churn of the same system of racial exclusion.”

This is why the frame of “wealth-building” through privatization is so fraught. On one level, the desire of older Black residents to “cash out” and leave something substantial to their children is completely understandable in a society that has systematically blocked other avenues for building intergenerational wealth. Housing equity is often the only asset on the table.

But as Tarleton points out, that wealth-building model is predicated on rising home values, and thus on someone else’s displacement. “A lot of racial justice conversation in housing talks about wealth-building through homeownership and appreciation,” he said. “That absolutely is a racial justice issue. But it’s predicated on rising values. From my perspective, a more durable, community-wide intervention is stable, affordable housing even if people aren’t making a bunch of money from it. You can stay in place, save, plan, budget. You have access to a community you care about.”

The racial stakes, then, are not only about how much wealth Black families can extract from rising property values, but about whether Black communities get to remain in the neighborhoods they made livable in the first place. If the only way to “win” is to privatize and sell, then racial justice becomes indistinguishable from a managed exit, a dignified displacement.

Preserving Mitchell-Lama in gentrifying neighborhoods says something different: that Black and Brown New Yorkers have a right not just to remain, but to remain without needing to convert their homes into speculative assets.

Intergenerational Conflicts, at the Scale of a Building and a Family

Gentrification and rising housing costs don’t just pit current residents against future ones. They strain relationships within buildings and within families.

Inside Mitchell-Lama co-ops, these tensions often fall along generational lines. Older residents, facing rising healthcare costs and limited incomes, may see privatization as a way to pay for eldercare or to pass something on to children. Younger residents, in their thirties and forties, may see it as their only shot at a financial “level-up” in a system where buying a starter home in the open market is a fantasy.

Tarleton is cautious about attributing these conflicts purely to gentrification. “It’s more a product of the larger dynamic of housing costs increasing dramatically everywhere,” he said. “That creates winners and losers. Boomers who bought cheap and saw massive appreciation are winners; younger generations are, relatively speaking, losers. That dynamic alone creates tension.”

But gentrification intensifies that tension by making the stakes of each decision feel higher. Selling a family home, or voting to privatize a co-op, is not just selling at a profit. It is stepping into, and benefitting from, the same market forces that are uprooting neighbors and transforming the neighborhood’s culture. That’s one reason, he notes, that intra-family conflicts around property in gentrifying areas have become a target for deed theft and predatory speculation.

He pointed to the phenomenon of “tangled titles,” where a property’s legal ownership becomes unclear after an owner dies without a clear will. In Black neighborhoods with historic disinvestment and less access to estate planning, speculators target these situations. “They’ll get one sibling to sign away their rights, then another, and suddenly the family home has been accidentally sold for peanuts to someone who then flips it for a huge profit,” he explained.

In that sense, the moral dilemma facing a Mitchell-Lama co-op — do we keep this as social housing or convert it into a financial asset? — is being faced by individual families all over the city. What is a home for: to live in, or to cash in?

The Mirage of the Exit Ramp

For residents considering privatization, the allure of the exit ramp is obvious: a big check, a sense of finally gaining what the market has told them their home is worth, a feeling of not being the “sucker” who stayed limited-equity while everyone else got rich.

But as Tarleton emphasized, the math is rarely as clear as it seems.

First, if you want to stay in New York, privatization is often a bad deal. “If you want to stay in the city, to me there’s no point,” he said bluntly. “This is the best deal you’re going to get.” Selling a social housing unit for a large sum only to confront the city’s market-rate prices as a buyer again is a recipe for being permanently priced out or forced to move far from one’s community.

Second, the same forces that make your unit valuable make everything else unaffordable. “There’s always this aspect where, yes, gentrification might make it lucrative to sell, but it’s also making it incredibly hard to buy anything else,” Tarleton noted. “Those things even each other out. The deal doesn’t keep getting better.”

Third, even if you stay put after privatization, you are now tethered to a volatile market that can jack up your costs or strand your building without enough sales to fund services. The COVID shock at Southbridge is a dramatic example, but not an anomaly. Our era of climate disasters, pandemics, and financial crises will deliver many more surprises.

All of this suggests that privatization is not a rational, risk-free path to stability. It is a high-stakes bet based on short historical memory and a narrow understanding of value.

It’s also a policy failure. It should never have been possible for a program designed as permanently affordable social housing to bleed units back into the speculative market. The decision to create that escape hatch and to leave it in place even as gentrification rendered it explosively attractive amounts to a long, slow surrender of public investment to private gain.

What New York Could Choose Instead

New York is not powerless in the face of this dynamic. In 2021, after years of organizing by Mitchell-Lama residents and allies, the state raised the voting thresholds for privatization and lengthened the time between failed attempts. These reforms mean that at many co-ops, including St. James, a small but determined minority can now block privatization and keep buildings in the program.

That’s a start. But it still leaves the core structure untouched: a publicly subsidized, publicly justified social good that can, with enough votes, be removed from the public’s reach and sold into the market.

Tarleton’s book points to more ambitious alternatives drawn from land trusts, agrarian commons, and tenant unions. What they share is a refusal to allow public goods to be casually converted into private assets, and a commitment to governance models that include stakeholders beyond current residents, future tenants, neighbors, and wider communities.

One obvious step would be to remove the privatization option for Mitchell-Lama co-ops altogether going forward, or to replace it with a mechanism requiring that units leaving the program be transferred to another form of social ownership (such as a community land trust) rather than going fully market-rate. Another is to treat social housing not as an experiment anchored in a few islands but as core infrastructure, scaled up and maintained like transit or water systems.

More fundamentally, the city needs to abandon the fantasy that it can “build its way out” of a crisis while letting older social housing quietly exit stage right. As Tarleton has argued elsewhere, the race to produce new affordable units has largely been a treadmill: frantic production just to replace what is lost through expiring affordability and privatization. Preservation must be treated as co-equal to production, if not more urgent.

That means making it politically costly for elected officials to stay silent when a large Mitchell-Lama co-op in a gentrifying neighborhood heads for the exit. It means recognizing, in policy and rhetoric, that social housing is not a special favor to the unlucky few who “win the lottery,” but a core component of a just city.

From Extraction to Stewardship

Underneath all of this is a clash of ethics. The dominant American story says that to own something is to have the right to profit from it as much as the market will bear. The alternative, which Tarleton calls an “ethic of stewardship,” holds that ownership also entails obligations, to neighbors, to future generations, to the public that helped create the value in the first place.

Mitchell-Lama co-ops sit directly on that fault line. Their residents are both beneficiaries of public investment and, potentially, the agents of its undoing. They are asked to decide whether to treat their buildings as commonwealth, shared, enduring public goods, or as assets ripe for liquidation.

Gentrification makes that decision harder by promising an escape from precarity and a chance at the kind of security that has been profoundly unequally distributed by race and class. But it also makes the need for social housing more urgent than ever, by eroding every other foothold in the city for working- and middle-class people.

In our conversation, Tarleton emphasized that these stories are not morality plays with heroes and villains. They are, as he put it at the start, “stories about interesting people struggling with difficult decisions.” There is no value in demonizing a retiree who votes to privatize so she can pay for care, or a younger resident who sees no other route to a down payment.

The question a city like New York must grapple with is different: Why are individuals being forced to shoulder the burden of these choices at all? Why are residents of social housing being asked to choose between their own fragile security and their neighbors’ ability to stay in the city?

We could build a different framework, one in which elders can access dignified care without needing to liquidate their homes; in which Black and Brown neighborhoods receive sustained public investment without displacement; in which social housing is expanded, not eroded, over time.

Until we do, gentrification will keep whispering the same message at the doors of places like Southbridge and St. James: Cash out now, before it’s too late. And building by building, vote by vote, New York will keep letting its best ideas about housing slip away into someone else’s balance sheet.

An ethic of stewardship demands that we answer that whisper with something firmer: this was built as a home, not a lottery ticket. It is not for sale.

Photo by Matthew Moloney

Kay Kamarul Zaki is a freshman from Kuala Lumpur, Malaysia, studying economics and public policy at New York University. She is interested in urban poverty, social inclusion policies, anti-displacement initiatives, and the future of renewable energy in growing cities. In her free time, she enjoys reading translated literature, her current favorite authors are Stefan Zweig and Magda Szabó, discovering new foodie spots with friends, and playing with cats.