Half a century ago, city planners warned that New York had the potential to become a “monster city” of 55 million people. To avoid this fate, the city enacted a major overhaul of zoning rules in 1961, limiting the size of buildings and the number of people who could live in them.
Today, a long-standing housing shortage, partly fueled by these old constraints, is fueling an affordability crisis.
It may seem counterintuitive that America’s largest city has a housing shortage. Cranes and construction crews seem to be constantly on the move, piling up new apartment buildings, condos and tall skyscrapers.
But the problems reflect a national phenomenon and are further fueled by the popularity of New York itself. More people want to live here than the city can accommodate, driving up the prices of available housing.
The New York metro area needed more than 340,000 more homes in 2019, according to a May analysis by Up For Growth, a Washington-based policy and research group. The city has issued fewer building permits per capita for most of the past decade than Boston, Austin and San Francisco, according to a study by the Citizens Budget Commission, a nonprofit research group. And new housing is not keeping up with the growth of new jobs.
At the same time, the number of homes that rent for less than $1,500 is declining, and the median rent for newly rented Manhattan apartments in June reached a staggering $4,000, real estate firm Douglas Elliman reported.
There are many barriers to increasing housing supply to meet demand, including:
● Zoning restrictions that limit the size of buildings and allow many neighborhoods to exclude new development;
● The cost of construction, and in particular the cost of subsidizing and supporting affordable housing;
● The inability of state and local politicians to agree on meaningful solutions.
Not everyone agrees that making it easier to build more houses is a panacea. Some housing advocates say government officials should also prioritize rent control and social housing to make life here more affordable.
However, almost everyone agrees that without some intervention, the situation could become even more dire as the city tries to recover from the pandemic, exacerbating homelessness, making it difficult for businesses to retain workers and crowding out workers. poorer residents.
“I’m usually a pretty optimistic person,” said Vicki L. Been, former deputy mayor for housing and economic development under former mayor Bill de Blasio, who supports facilitating housing construction. “I would describe myself as very worried.”
Cynthia Reel, 66, is one of thousands of tenants worried about the rising cost of living. In March, she moved from the Upper West Side to a cheaper apartment a few blocks north of the George Washington Bridge. But at $2,000 a month, even that seems difficult to manage, especially if she faces a rent increase when her lease renews next year.
If the raise is “ridiculous,” she can move to New Jersey, she said, “although I don’t want to do that.”
An invisible network of constraints
At the heart of the problem is zoning.
According to Jason Barr, professor of economics at Rutgers University-Newark who has written on the history of zoning.
Within a few years, the rules raised fears that they could create a housing shortage.
The city, struggling with crime and financial difficulties, lost population in the 1970s, dropping from around 7.9 million in 1970 to around 7.1 million in 1980. But it rebounded and reached 7, 3 million in 1990 and more than 8 million in 2000.
When Mayor Michael Bloomberg took office after the terrorist attacks of September 11, 2001, he undertook a massive remodeling of the city, to help it recover and boost its economy and population. And while the plan paved the way for higher-density development and opened up many of the city’s waterfront areas to residential uses, some of its efforts have placed limits on new housing.
Between 2003 and 2007, the Bloomberg administration rezoned nearly a fifth of the city, according to a 2010 study by New York University’s Furman Center for Real Estate and Urban Policy. But almost 90% of the batches analyzed in the study saw their capacity reduced or only slightly increased.
At the same time, New Yorkers who didn’t want their neighborhoods to change increasingly found ways to slow down projects.
Changing zoning rules allowed individuals and neighborhood groups to sue projects they didn’t like. Now, developers often won’t come up with a project at all if they feel they’ll face significant opposition, said Kirk Goodrich, president of Monadnock Development.
Even when they propose a project, the path can be rocky: A recent project in Harlem that could have contained more than 900 new homes was recently withdrawn after opposition from the local council member. Council members opposed two other projects — one in Astoria in Queens and another in Throgs Neck in the Bronx — that would add more than 3,000 housing units, including some 800 that would rent below market rate.
An effort to rezone parts of Brooklyn’s Gowanus neighborhood, which was approved in 2021 and includes a Monadnock project, has taken more than a decade, in part because of political fights. The time taken up by these battles, Mr. Goodrich said, “does not allow us to deliver major housing in a timeframe that allowed us to overcome the shortage”.
The cost of construction is also high and increases every year, according to the Citizens Budget Commission study. Interest rates, which are rising to fight inflation, threaten to make development even more expensive.
Even without inflation, unique provisions in New York City’s building code, plumbing code and electrical code drive up the cost of development, the study found.
A political quagmire that blocks solutions
National and local authorities have so far been unable to agree on meaningful solutions.
This year, state lawmakers considered and failed to pass at least four different measures to boost housing supply in and around the city: Homes died after opposition from lawmakers representing New York’s suburbs .
A bill that would have removed a state cap on the size of residential buildings also died in the Legislative Assembly.
And lawmakers let expire without replacing or reforming a controversial tax break that helped fund the development of large new buildings, known as 421-a.
The city and state have also long failed to revamp the unequal underlying tax system that weighs more heavily on large apartment buildings than smaller properties.
Mayor Eric Adams has promised to make building easier in New York, such as eliminating or relaxing some requirements that new buildings provide parking spaces for residents and streamlining the building code.
But the changes, which are expected to be introduced in early 2024, could face fierce political opposition.
“More people than ever before have been impacted by the housing crisis during the pandemic,” said Jessica Katz, the city’s director of housing. “We hope we can build a coalition around this.”
Yvonne Stennett, executive director of the Community League of the Heights, a community development group in Washington Heights, said the city should push for more projects like a 174-unit affordable housing development in Inwood that her group is involved in. , made possible after neighborhood rezoning and public and private subsidies.
Building and maintaining affordable housing requires a large amount of public investment to subsidize below-market rents. While Mr Adams has pledged to spend $22 billion over 10 years on affordable housing – a historically high figure – his administration has not set specific housing production targets, and housing advocates fear that the investment does not go far enough.
For some, housing supply problems are exaggerated.
Samuel Stein, senior policy analyst at the Community Service Society, a nonprofit poverty relief group, said other factors, such as investors seeking higher profits on housing, are also fueling the problems. affordability.
He said lawmakers should prioritize measures that would reduce exorbitant rent increases, like the “eviction for cause” bill that also failed the state legislature, and channel public investment towards projects that benefit New Yorkers with the lowest incomes.
A precarious future
As solutions remain stalled, affordability issues are forcing New Yorkers to make tough decisions about where to live that could change the nature of the city.
Many New Yorkers wonder if middle- and low-income people can continue to settle here. Ms Stennett said many longtime residents of her neighborhood, long a largely working-class neighborhood, have been “evicted” as wealthier people move in.
“This town is getting so rich – who can afford some of this stuff?” said Mrs. Stennett. “How is a newly married couple supposed to do that? How is a college graduate supposed to do that? How can a family that receives public assistance be expected to give it up? »
Taylor Sicko, 25, used to commute from a Brooklyn apartment where she lived with roommates to Midtown Manhattan, until she lost her job during the pandemic and could no longer afford her monthly rent of $1,300. Ms Sicko took an online quiz about where to live and decided to book a late 2020 flight to Denver, a city she had never visited.
Almost two years later, Ms Sicko is still living there, with a new car and her own apartment and has no plans to leave any time soon. And she wouldn’t have to: Her new job is an all-remote role at a New York-based legal tech company.
“I very rarely find myself missing New York,” Ms. Sicko said.
Matthew Haag contributed report.