Is Prohibitively Expensive Housing In New York City Inevitable?

-- By KieranSingh2001 - 16 Apr 2024

The Problem

As someone who has never faced housing scarcity, it's hard to put my finger on why it ignites a passion in me more intense than nearly any other political issue. Perhaps it comes from seeing my neighbors, in my well-to-do neighborhood of Minneapolis, my hometown, preach high ideals of racial and economic justice in one breath, then lobby for zoning policies that keep their neighborhoods rich and white in the next. Yet, housing costs and scarcity are at their most severe here in NYC, and 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. Thus, the question remains: is it possible, on a macro level, to make housing affordable for everyone in New York? Even the oft-derided "transplants?"

The Current NYC Housing Landscape

In 2023, the median rent in Manhattan reached $4,200. In Brooklyn, it was $3,500. Multiply those numbers by twelve and one can more clearly see the problem. On average, it costs fifty thousand dollars just for housing in Manhattan. Moreover, the population of Manhattan has declined significantly in the last one hundred years, and it's not for lack of people's desire to live here.

Zoning Laws

Manhattan zoning laws are complicated, and not based exclusively on heights or units. In Manhattan, at least, 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. For example, in an area with a maximum ratio of 6, a building that covers the entire plot can only consist of 6 stories. In areas of Manhattan, including my current neighborhood of Morningside and my future neighborhood of Hell's Kitchen, residential areas are zoned as "R8," which means that the maximum floor-to-area ratio (FAR) is 6, with special exceptions for affordable housing developments. In many areas of Brooklyn, the land is zoned as "R6" or "R6B." R6 areas have a typical maximum FAR of 2.43, and R6B? zones, which are in neighborhoods like Park Slope and Bed-Stuy, exist to "preserve neighborhood character," and have much more severe height regulations at 50 feet. While there are no overt restrictions on the number of units allowed, these zones seem to restrict the supply of housing by allowing only limited buildup.

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. The most recent version of the 421-a (16) tax exemption allows developers to avoid property tax if 25-30% of their units are affordable (defined as rents in the range of a third of a certain percentage of the median income for the area, and all of the units are subject to stabilization until they are priced past a "decontrol" limit. 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. The governor's office has proposed more exceptions to the FAR regulations, but only for "certain projects," and a more general lifting of the FAR cap may expand the supply of new units.

Rent Stabilization

Opponents of upzoning 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 R10, 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. Second, the city can allow affordable developments even higher than what the R10 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 there may be economic ramifications that I am currently oblivious to, but the current system is unsustainable. New York is the greatest city in the world, and its membership shouldn't be artificially restricted.

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