Fighting New York’s Affordable Housing Crisis With Neighborhood Rezoning
August 5, 2019
It is no secret that New York City is in the midst of a deepening housing affordability crisis. Home prices in the city have grown by 30 percent since 2011. Average rents have risen by 40 percent within the last 20 years. These surging price levels are a function of a growing disparity between housing demand (driven by an expanding population) and a supply-constrained housing stock. On the demand side, the city added 576,000 new residents between 2005 and 2016. On the supply side, during the same time period, only 76,000 net new units of rental housing were added, a result of New York being a water-locked city with significant zoning and land-use restrictions.
This April’s release of new U.S. Census data, however, revealed a surprising twist to the above narrative—since 2016, the city has experienced its first population decline in more than a decade, losing 48,500 residents in the years 2017 and 2018 combined. Many see this short-term dip in what has been a long-term growth trend as an alarming warning sign of just how out-of-sync housing prices have become relative to what many New Yorkers can afford.
Policy makers need to act quickly and decisively to confront the growing housing affordability crisis. Unfortunately, efforts to protect tenants from rising rents by means of rent ceilings have only compounded the issue. New York’s rent stabilization system has contributed to an overall rise in rents by removing apartment units from the supply side of the market and by creating incentives for tenants to stay in stabilized apartments for extended periods of time, thereby leaving little room for newcomers. Instead of gradually working toward reintroducing the city’s 1.1 million rent stabilized apartments into the free market, today’s political agenda is to keep regulated units in the system and further restrict their rent growth. This shortsighted approach will further widen the gap between stabilized and free market rents and thereby deepen the affordability crisis.