Housing Policy

Is New York City Barreling Toward Its Own Housing Crisis?

A report from the city's Department of Planning finds that housing construction has not kept pace with job growth.

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When it comes to the country's urban housing shortage, Californian cities are typically the ones that capture headlines, yet the situation is not much better in New York City.

Surging employment growth is outpacing new housing construction in America's largest metro area, leading to longer commutes and higher housing costs. And while the Golden State has begun, slowly, to adopt prudent housing reforms, New York is doubling down on policies that will only make its problems worse.

In October, New York City's Department of Planning released its second Geography of Jobs report, which tracks employment growth in the region, finding that the 22.6 million-person metro has added 924,000 jobs since 2008, with 675,000 of these added in New York City alone.

That employment growth has, however, not been matched by new housing. Since 2009, the wider New York area added just 457,000 units of housing, or about one new home for every two jobs, according to the planning department's report. This ratio is even more skewed in New York City, where only one unit of housing has been built for every 3.55 new jobs.

"New York City has gained jobs very rapidly, [but] the region as a whole has not produced enough housing," says Eric Kober, a former director with the city's Department of Planning and an adjunct scholar at the Manhattan Institute. "The housing that it does produce is not produced in proportion to the amount of existing population that different parts of the region have."

Kober notes that northern New Jersey has done a decent job of adding housing to accommodate the region's growth, building 40 percent of the region's new units since the Great Recession despite having only 30 percent of the region's population, and adding only 15 percent of its jobs since 2008.

By comparison, New York City has added 70 percent of the region's new jobs since 2008, but only 40 percent of its new housing units. The New York suburbs in Long Island and the Hudson Valley have added few jobs and even less housing.

Much of this is driven by local land-use policies, says Kober, who told me that places like New Jersey have accommodated new housing development, while New York City has lagged behind, and the New York suburbs have been openly hostile to it.

"The market is functioning in New Jersey, so maybe New Jersey is getting as much housing as the market wants," Kober says. "But it is also a matter of the rest of region suppressing through restrictive zoning what the market would otherwise be inclined to build."

In particular, Kober identifies low-density zoning and minimum parking requirements in most New York suburbs as holding up needed development. Despite already having a lot of high-density areas, he says New York City has also failed to rezone enough land to accommodate the city's growth.

The result is that more people are making longer commutes, many of them via mass transit lines that suffer from overcrowding and frequent delays. Drivers aren't faring much better. The New York metro area has the fourth worst traffic in the country, according to the INRIX's 2018 Traffic Scorecard Report, with commuters losing 133 hours a year to congestion.

New Jersey Transit reports that the number of on-time trains (meaning trains arriving within six minutes of their scheduled arrival) was at 92 percent overall in September, two percent less than the agency's 94 percent on-time goal. Trains traveling to and from New York City's Penn Station had an 85 percent on-time rate during peak hours.

Housing costs have also increased in much of the area. New York City has the second-highest median rents for a one-bedroom apartment, according to a June report from rental website Zumper, behind only San Francisco.

"Cities are labor markets," says Michael Hendrix, an urban policy scholar with the Manhattan Institute. "If we fail to scale housing and transportation to job centers, then we are failing the basic function of a city."

Hendrix warns that if the New York Metro area continues to see commute times and housing prices grow, the economic dynamism of the region will recede, noting that the city actually saw its population shrink last year. Unfortunately, Hendrix says policy at both the city and state level is getting worse.

"New York City and Albany have chosen to go in the wrong direction. They've chosen to preserve units for people who've already lucked out in the housing lottery, and lock out newcomers and outsiders," he says, referencing the state's strengthening of its existing rent stabilization law, which limits how much landlords can raise rental prices.

Developers and landlords cite these changes to the rent stabilization law for wanting to leave the city.

And while California has started to embrace halting reforms to its housing crisis—passing bills this year that make projects harder to delay and building accessory dwelling units easier—New York is considering nothing productive.

"Cuomo hasn't signed anything that's market-oriented in terms of housing solutions," Hendrix tells me. "The state legislature certainly hasn't proposed anything. Local control remains sacrosanct. On net, we're getting fewer property rights and more rights to exclude."

New York's housing situation has not yet reached Californian levels of dysfunction. Despite anemic post-recession housing growth, the metro area has still managed to add a unit of housing for every 1.15 jobs.

Still, housing crises aren't created overnight. Not adding enough units today can mean serious problems tomorrow.

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  1. Is New York City Barreling Toward Its Own Housing Crisis?

    Well, it is ruled by democrats, so yeah, it is.

  2. Maybe the city needs to use eminent domain to take land and build some high rise apartments. Why not build on that big waste of space right in the center of Manhattan?

    1. You mean the city admin building?
      The mayor’s residence?

      1. I was guessing Central Park.

        1. *** huffily ***
          Well, every *civilized* person is afraid of *Morningside* Park!

          1. Yeah!! That’s where the dead people hangout.

    2. They are building as rapid of a pace as regulations, permits, backroom deals, and bribery allows.

  3. I blame Trump, in this and all things. Unemployment is down, so more people go to the cities where pay is higher. If we would only stay poorer in stay put, everything would be alright. Except immigrants. They can move around.

    1. I blame Trump, in this and all things.

      Congratulations, and welcome to your new job as a staff writer at Reason.com…

    2. “Unemployment is down, so more people go to the cities where pay is higher.”

      That should be “Unemployment is down, so that proves people are working 2 or 3 jobs just to survive.”

      #LibertariansForAOC

    3. I’ve seen people on FB insist that cities build more affordable housing to accommodate the low-wage workers. Argument is that low-wage folks shouldn’t have to leave the city because “they spent their whole lives there, it’s all they know!”

      Same people fail to realize that Guatemalans, Salvadorans, etc., somehow manage to relocate here from a place with a different language and culture. Given that, I think moving from Seattle to Spokane, say, shouldn’t be all that upsetting.

    4. Kaiser Wilhelm can stick 40 50 families in the property Trump just vacated.

  4. Nobody wants to build in a town run by communists? I find this hard to believe.

    1. This happened in Denver, although on a smaller scale. It’s gotten very blue with all the Californians fleeing the consequences of their own decisions, and they came to Denver and passed some law about how new construction has essentially unlimited liability. If 200 years from now someone finds a fault with a building you built, you’re still on the hook for it.

      As it turns out, not many developers like the sound of unlimited liability and just decided to not build there anymore. Rent is going up dramatically as a result, and I’m sure they’ll be on the rent control bandwagon soon enough.

      I don’t need a wall between me and Mexico, I need a wall between me and California.

      1. Maybe you’ll feel a little better knowing that there are plenty of Texans moving to Colorado as well? Probably not, although I’ve been told by more than one local in my new town that they prefer people like to me moving here to Californians. That said, I live in one of the red bastions in Colorado so…that probably has something to do with it.

        I’m not super welcome in Boulder, though.

        1. Thank you for helping the sane Colorado residents in taking down Prop CC.

        2. I live in the Springs which thankfully hasn’t gone totally insane yet. It’s gonna take a lot of displaced Californians to offset the military presence down here.

          And yeah, when I moved here from Northern VA the locals were concerned, right up until I asked them where the best places to go shooting were.

    2. At least the normal communists make the trains run on time. Apparently these ones can’t even accomplish that.

      1. Well, that was the (italian) fascists supposedly. Though there’s some evidence they simply announced the trains were on time and shot anyone who disagreed.

  5. the 22.6 million-person metro has added 924,000 jobs since 2008, with 675,000 of these added in New York City alone. That employment growth has, however, not been matched by new housing.

    No need, since those are second and third jobs taken by existing New Yorkers so they can continue to afford to live there.

    1. Occasional-Cortex, is that you?

  6. NYC has always had a housing crisis.
    Fortunately, there is de Blasio as mayor to make it even worse.
    Aren’t progressives wonderful?

    1. Well Blasio might help with freeing up some apartments as people flee the aggravated homeless, high taxes, and petty laws.

      “”Aren’t progressives wonderful?””

      They are so wonderful that people are going to want to elect a tough mayor looking to clean up the town. It will be Giuliani time, once again.

      1. Hell, I’d settle for a clean E-Train that runs on-time….

  7. At a certain point, urban density means you can’t build anything new without knocking down something old and replacing it. Or rezoning the places that are those ‘expanding businesses’ to replace with housing.

    I don’t live in New York, nor have I ever been there, so I can’t say that’s necessarily the case but when I look at the density of New York I’m unclear on how they can ‘expand’ housing any further when it’s already a concrete jungle that expanded upwards a long time ago. I’m sure there’s some fiddling they can do to expand housing, I’m just not so clear on where exactly they could put all this new housing in such a dense urban area.

    1. “”At a certain point, urban density means you can’t build anything new without knocking down something old and replacing it.””

      Like this

      https://www.businessinsider.com/view-from-top-of-432-park-avenue-2014-10

      1. More or less, although the prices on those units is staggering. I know how Tokyo achieved such a dense population but I’m not so sure Americans are willing to live in coffin pods quite yet.

      2. The views are terrific, mainly because you can’t see the ugly ass building you’re in.

    2. Why doesn’t NY just storm in, capture Perth Amboy, knock it down, and extend Staten Island? If that’s a success then seize all the way up to Jersey City and Hoboken?

  8. Can something be a crisis if self-inflicted?

    1. Since most political and economic crises are self-inflicted, I would say yes.

  9. New York? Well I never! Next you’ll be reporting a housing crisis here in California!

  10. Why is it that every time Reason writes about a proggie city like New York, or state, like California (in crisis), I hear a giant federal taxpayer bailout sucking sound.

  11. NYC has been barreling towards a housing crisis ever since it passed rent control. As the old saying goes: In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.

  12. NYC won’t have to worry about a housing crisis due to the constant net out-migration from the state. It doesn’t matter how many new units you put up if everyone who retires sells their units and moves out.

  13. Korea and Japan have 50-70 million people packed in a booger sized country, and their solution to housing is simple – you stack people in high rise apartments. To save cost, some of them don’t come with heating or any appliances.

    But you like the suburbs and single unit housing? You want to have a front yard garden, adapt a dog named spot and hang Christmas lights on your roof? You’re a racist.

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