Promising, but won’t solve New York’s housing crisis

Like other American cities, New York is trying to solve its housing crisis. Decades of failure to build enough housing are causing rents to skyrocket beyond incomes and wages. And excessively expensive housing can have serious negative consequences for a city’s economy and population, with the burden falling disproportionately on low-income people.

After decades of inadequate housing policy, New York is now moving forward Mayor Eric Adams’ “City of Yes” Proposal— zoning and other reforms aimed at increasing new housing construction. But while the proposal is welcome, it will not be enough to fully address the city’s long-term housing problem and its associated economic and social threats.

Housing crisis now threatens New York’s economy

Housing crisis in New York is the result of two long-term trends: job and population growth, and stagnation in new home construction. Although the city brought jobs and new residents, little housing was built.

Experts estimate that the city needs hundreds of thousands of new apartments just to close the gap. And housing construction continues to lag. It is estimated that the city needs up to 50,000 new apartments a year, but only 27,980 were built in 2023, and the number of permits for new apartments has actually declined.

Other data confirms the severity of New York’s housing shortage. In 2023 the network vacancy of rented apartment this low figure probably doesn’t even take into account people moving from one apartment to another or renovations, much less new residents looking to live in the city.

It’s no surprise that such low vacancy rates are driving up rents. New York City Comptroller The office reported that “the average ‘asking rent’ for publicly listed apartments available for rent rose to a record high in 2023.”

These rent levels and increases are leading to a housing affordability crisis. The Comptroller reports that the rent level means that “a household would need to earn $140,000 or more to not be rent burdened (defined as paying 30% or more of rental income). This income level is nearly double the median New York City household income in 2022.”

This yawning gap in housing availability and affordability threatens New York’s future prosperity. Regional Planning Association It is estimated that by 2035, the entire New York region could lose $900 billion in GDP, 730,000 new jobs and billions of dollars in tax revenue. Since New York is the driving force behind the region’s economy, many of these losses will fall directly on the city.

Mayor Adams and the “City of Yes”

Faced with an ongoing housing crisis, New York City Mayor Eric Adams has proposed an ambitious plan—the City of Yes—to build more than 100,000 housing units over the next 15 years. The new housing will be built by private developers, largely through changes to single-family and other zoning restrictions, allowing for denser housing in many parts of the city. The plan would also reduce costly parking requirements and other administrative barriers.

The plan has received significant opposition from an odd mix of conservative single-family neighborhoods opposed to higher density and progressive advocacy groups suspicious of private developers.

In single-family neighborhoods, there was concern that new development without mandatory parking would make it difficult to find parking. Progressive opponents, in turn, advocated for more affordable housing and strict restrictions on commercial development.

The Adams administration, led by city planning director Dan Garodnick, struck a deal to get city ​​council approval. They placed single-family neighborhoods by continuing mandatory parking for new homes (which reduces the space and resources available for housing), limiting the construction of alternative development units (ADUs) on existing single-family lots, and limiting denser development near public transportation.

Progressives agreed on another $5 billion in city and state funding for affordable housing, infrastructure, tenant protections and focusing affordable housing eligibility on low-income households.

The package is estimated to create an additional 80,000 housing units over 15 years, about 30,000 less than the original plan.

“City of Yes”: progress, but not enough

The City of Yes represents New York’s important advances in housing. For many years, the city’s housing supply has been far below the city’s needs due to a combination of inadequate policies and political opposition.

This opposition is an odd coalition of single-family homeowners and some left-wing civil rights groups. It’s rare to see an issue unite conservative Republicans on Staten Island and elsewhere with left-wing environmental and renter groups.

Of course, these groups want very different things: no affordable housing or increased density for conservatives, especially in their neighborhoods, and much more—even exclusively—affordable housing and expanded rent control for leftists.

If City of Yes is ultimately passed, it would be a promising sign that many progressive politicians now recognize the need to increase housing supply. City Comptroller Brad Lander, a progressive running for mayor next year, has been a strong supporter of the proposal, as have several City Council members and other political leaders.

But the City of Yes is not enough. Estimating 80,000 new housing units over 15 years results in an average of about 5,300 new housing units per year. Although this would be a welcome addition, Restrained Reporter Kim Welsey notes, “Adams said the city needs to add 50,000 apartments a year, nearly double the 27,980 it added in 2023.” (Restrained humorously characterized the city’s revised and shortened proposal as a “City of Yes”).

So, two cheers, not three, to “Yes City.” Hopefully, this represents a shift away from the radical anti-housing policies that have stifled new supply and helped create the housing affordability problem that New York (and other cities) now faces.

But momentum needs to continue to build to ensure that the City of Yes proposals are not further weakened and that more efforts are made to increase housing supply. New York and other cities have unfortunately contributed to a housing affordability crisis through misguided policies that will take years and new housing policies to overcome.