New York City housing crisis

The New York City housing crisis refers to the recent shortage of affordable housing in the city. It is caused by the erosion of the New Yorkers' purchasing power and the uptick of the average monthly rent in the city despite robust tenant protection. To address the problem, New York City Mayor Bill de Blasio launched an initiative called Housing New York to create or preserve 300,000 affordable housing units by 2026.

Housing market in New York City

New York, more than other big cities in the United States, is a city of renters. 51% of housing units are rented, and 41% occupied by owner including housing cooperatives and condominiums. Owners of rental units pay heavy property tax; owners who occupy their own property are lightly taxed.

Supply factors

There was an increase of 19% in the number of housing units between 1970 and 2016, although growth in new construction slowed after 2000 from over 7% to 5.3%. Most people's experience of living in New York from the time when Bloomberg was mayor has been of constant construction.

Commerical building

Newly constructed housing units are renting for $400 over existing units, which is eight times the difference in 2000 between new and existing units.

Government initiatives

The city government has had to deal with many periods of housing crisis in its history. Following a housing crisis in 1920, 700,000 units were built. But, again in 1930's people were talking about a crisis. Mayors Fiorello La Guardia and William O'Dwyer dealt with slum clearance and building public housing. Wagner and Lindsay oversaw Mitchell-Lama. Ed Koch was mayor during a wave of housing abandonment which had to be stemmed and rebuilt. This continued under Dinkins and Giuliani.

Individual and family homelessness had become a major issue over the 1980's and 1990's. Mayor Bloomberg oversaw a economically resurgent city. During this period rents in New York City rose more than 15% over the country as a whole. His New Housing Marketplace Plan pledged to create 165,000 units of affordable housing between 2002-2014, of which 53,000 would be new units and 112,000 preserved. The cost for this program was $23.6 billion, of which $5.3 billion was public funds and leveraged $18.3 billion private funds.

In 2016 Mayor Bill de Blasio promised an even more aggressive plan to build and preserve 200,000 housing units over ten-years and he introduced mandatory-inclusionary zoning requiring 30% of all new construction units to be affordable.

Vacant units

In 2014 there were 182,600 vacant units unavailable for rent or sale. A large majority of these units were either bought for investment or used only occasionally for visits to the city. In two years this number had increased to 248,000 units and represented 8% of the city's housing stock. The increase in vacant units by 60,000 is exactly the same number as the number of homeless in New York City's shelter system.

Demand factors

Between 2000 and 2012 the median rent of an apartment increased 75% in New York City compared to 44% for the rest of the United States. The increase impacted the poor and working class most. There was a loss of 400,000 apartments renting for $1,000 a month or less (constant 2012 dollars) and a resulting gain of apartments renting over this. This was not a small shift but saw 240,000 units renting for $601-800 disappear and apartments renting for $1,201-1,600 having the highest gains. Median rent in constant dollars increased from $839 in 2000 to $1,100 in 2012.

Balancing out the growth in housing, over the past decade New York City has been growing dramatically, now up to 8.6 million people. All boroughs, including the Bronx, are close to all-time population highs. Employment has been growing up to 4.5 million jobs. Combined with low crime and lots of amenities, the city is a very attractive place to live.

Market failure to build affordable housing

The new construction has not been built for families with the greatest need. On top of the 19% increase in new housing units, hundreds of thousands of rent stabilized units have been lost. A large percentage of new construction has been studios and one bedrooms and there is a great need for larger units to service families.

The units lost were those the lowest-income families in New York City would find affordable. Looking back over history, New York has always had an affordability crisis with a 5% vacancy rate. This is the reason the government has traditionally stepped in to subsidize housing. There is a 2% vacancy rate in rent stabilized units. So the affordability crisis is how the city can build and preserve housing units that serve low and moderate-income households.

Impact of affordability crisis

Overcrowding

Almost 1.5 million people live in overcrowded conditions in New York City. Overall crowding rose from 7.6 percent in 2005 to 8.8 percent in 2013 (a 15.8 percent increase). Overcrowding is not limited to low-income households, but is found at all income levels.

Severe overcrowding is defined as more than 1.5 persons per room. The severe overcrowding rate in the nation is 0.99 percent and is 3.33 percent in New York City.

Homelessness

There are currently 63,495 homeless in New York City, including over 23,600 children. Total homelessness in the city has increased by 82% over the last decade. According to an agency funded by the New York State Education Department, there were 104,088 students (1 in 10) living in temporary shelters and identified as homeless in the city's school system for the period 2016-2017.

There is a huge cost to the city to provide for the homeless. Following a 1981 consent decree, the city is required by law to provide shelter to any eligible person who asks for it. To shelter one family in one of the 167 family shelters costs $34,573 a year. $1.04 billion was budgeted for 2014 to provide homeless services, up from $535.8 million in 2002.

See also

• 421-a tax exemption, which promotes affordable housing in New York City by giving tax breaks to real-estate developers for building new multi-family residential housing buildings
• San Francisco housing shortage

References

Further reading

• Barker, Kim (May 30, 2018) "Behind New York’s Housing Crisis: Weakened Laws and Fragmented Regulation" The New York Times
• NYC For All: The Housing We Need (November 2018) Office of the New York City Comptroller, Scott M. Stringer
• 2018 Housing Supply Report New York City Rent Guidelines Board

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