Is Prohibitively Expensive Housing In New York City Inevitable?

-- By KieranSingh2001 - 16 Apr 2024

The Problem

Housing costs and scarcity are at their most severe here in NYC, with median rents reaching $4,200 in Manhattan and $3,500 in Brooklyn. Living here has crystallized my impulse to use my legal career to fight for everyone's right to housing. But for every tenant I can represent as a lawyer, there are a hundred other people with no representation in subpar, or prohibitively expensive, living conditions. is it possible, on a macro level, to make housing affordable for everyone in New York?

Zoning Laws

In New York, the amount that can be built is a function of the size of the property itself. The ratio between the total floor area of a building and the area of the plot of land is limited. Without getting into too many technical details, the ratio determines the height and volume of a development on a plot of land and varies based on neighborhood. Areas like Morningside allow residential high-rises while areas like Bushwick allow less density, and neighborhoods like prospect park south are sometimes restricted only to single- or two-family dwellings

Rent Stabilization and Affordable Housing

Currently, around a million units in NYC are rent stabilized, meaning that landlords can only increase rent by a certain percentage each year, and that the landlord cannot refuse to renew the tenant's lease, among other protections. While theoretically abundant, affordable and stabilized units are hard to find. On sites like StreetEasy? , only 200 stabilized apartments are listed in the entire city. Stabilized and affordable apartments can also be obtained through lotteries, but that leaves something as significant as the right to shelter to chance.

The Path to Housing Abundance

Rezoning

A 2018 Minneapolis rezoning plan allowed for the building of duplexes and triplexes on land that was previously zoned for single-family homes and eliminated parking minimums. The number of units in Minneapolis since the rezoning (from 2017-2022) increased by 14%, while the number of units in Minnesota at large only increased by 4%. Homelessness increased by 14% in the state, while decreasing by 12% in the city. Rents increased by 1% in Minneapolis, and 14% in the state. While still an increase in rent, 1% over 5 years far underpaced the rate of inflation. While NYC bears little similarity to Minneapolis, the same principle could apply here. Rezoning lower-density areas as "R10," a zone that allows for tall apartment towers and higher floor-area-ratios, will allow the construction of far more units per plot of land.

Historical and Political Obstacles

New York has an infamous history with broad-scale city planning changes. Robert Moses, an immensely powerful bureaucrat, enacted citywide urban renewal, road, and public housing programs, often displacing poor people and minorities in the process. A proposal to stick a highway through SoHo received opposition from Jane Jacobs, an urban activist. Moses believed in top-down city planning, whereas Jacobs believed in community input. Importantly, Moses promoted automobile-centered development, and Jacobs believed in (reasonable) density and walkability. Jacobs has won in terms of retrospective popular opinion. Still, her legacy has been claimed by pro-upzoning and anti-upzoning advocates alike, and certain thinkers, like Janette Sadik-Khan, the former commissioner of the NYC DoT? , and journalist Seth Solomonow, see her language and methods being deployed to oppose developments she would have approved of. The Homevoter hypothesis, posited by William Fischel, states that homeowners vote in ways that protect their land values, and they often have outsized influence in their municipal governance

According to Village Preservation, an architectural and cultural preservation organization operating for more than 4 decades, A SoHo rezoning plan approved in 2021 did not live up to promises due to the replacement of rent-regulated buildings with market-rate buildings. It may be easy to dismiss this sort of argument from a statistical perspective, but losing a rent-stabilized apartment is a massive loss to each individual affected. Moreover, Village Preservation has pointed out that areas with the least amount of construction (and the most landmarking) have had the lowest increase in rents, whereas the areas with the most construction have had the highest increase in rents. The Minneapolis data may be more on point, because there may be causal problems with assuming that places are more expensive because of development rather than the reverse. Regardless of the veracity of VP's analysis, however, the anti-rezoning viewpoint is politically salient and may cause trouble for any proposed rezoning plan. A prudent rezoning plan, then, would address these concerns without dismissing them out of hand, which necessitates expansion of rent stabilization.

Rent Stabilization

Opponents of upzoning, including prominent urban critic Roberta Gratz, often invoke the possibility of developers buying buildings with rent-regulated units, replacing them with shiny new apartment towers that offer only market-rate housing. However, the status quo of restricted supply is unsustainable, and upzoning can occur counter to, or without, displacement. First, if swathes of the city were rezoned for maximum residential density, wealthier people and transplants may move into new market-rate units, and with a greater supply of market-rate units, it would lower the competition for units overall. This phenomenon, termed "filtering" by urban academics," applies mostly to the reduction in price of older market rate units, and, unfortunately, evidence shows that a "politically unrealistic" amount of housing would have to be built to cause proper filtering. Still, it is good to think outside the realm of political realism, and a compromise plan could still ease competition for rent-controlled units.

Second, the city can allow affordable developments even higher than what the limit allows, greatly expanding the number of affordable units allowable per plot. The 421-a tax exemption could be expanded to incentivize higher percentages of affordable housing, for longer, further expanding the availability of affordable units. For people in existing units, current regulation requires that those forced to move after a demolition get moving assistance and stipends. With a much higher number of affordable units available, the city could extend assistance after demolition, guaranteeing a similarly-priced unit in the same general neighborhood. Finally, this abundance of affordable and stabilized housing units could allow residents to find rent-stabilized units more easily.

These ideas may have a hard time getting past the legislature or city council, and the dilemma between community control -- which may be far too slow to solve the housing crisis -- and a citywide plan -- which has unfortunate echoes of Moses' methods -- remains, but the current system is unsustainable. Moreover, while simple economic theory would posit that an increase in supply decreases the price of housing, the real-world data is much murkier. Minneapolis is the strongest, and most recent data point in favor of citywide upzoning, but previous {mit paper}. New York is the greatest city in the world, and its membership shouldn't be artificially restricted.

There are several ways that this could be improved, it seems to me. Currently, you bear the weight of having to make up everything: you cite no other writer on any aspect of the problem of city planning and housing construction in New York City. Given that an immense amount is written on the subject, which is intensively studied by many disciplines and engages, not surprisingly, quite a few capable and well-informed New Yorkers, you should not find it hard to locate writing you can learn from.

You can save space by removing technical details in the zoning system. Your objective is to show that moving from single-family homes to high-density high-rise apartment blocks creates housing. Perhaps not reading anything written about cities since Jane Jacobs would make it easier to say nothing about the social consequences.

Another route to improvement would be to think about politics, rather than dismissing it, like air resistance, from the simplified physics problem. New York City is a somewhat complicated political environment, which is why writing about even a small sliver of it (Peter Stuyvesant Village, or Forest Hills, let's say) will require more than a little political history to become intelligible. Robert Caro on Robert Moses still seems to me like the required starting place, though the New York City of The Power Broker is as old as I am now.

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