Policy

Adding Jobs but Not Housing Is a Recipe for Urban Unrest

New York City has failed to zone for enough housing to keep pace with growth.

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When it comes to the country's urban housing shortage, California gets all the headlines. Yet the situation is not much better in New York City, where surging employment growth is outpacing new construction, leading to longer commutes and higher housing costs.

Since 2008, the 22.6-million-person New York metro area has added 924,000 jobs. Despite this growth, the region has built only 457,000 units of housing, or about one new home for every two jobs. The ratio is even more skewed in New York City, where only one unit of housing has been built for every 3.55 new jobs, according to the city's Department of Planning.

Northern New Jersey is responsible for the lion's share of new residential development, building 40 percent of the metro's post-recession housing despite having only 30 percent of its population and adding only 15 percent of its jobs since 2008. By comparison, New York City overall has added 70 percent of the region's new jobs since 2008 but only 40 percent of its new housing units.

Much of this is policy-driven. New Jersey is relatively accommodating of new development, while New York City has failed to zone for enough housing to keep pace with growth. The New York suburbs, meanwhile, are positively hostile to new building.

The result is that more people are making longer commutes. The New York metro area has the fourth worst traffic in the country, and trains across the Hudson are as overcrowded as they are late. Workers seeking to avoid this drudgery by moving closer to their jobs in the city can expect to pay some of the highest rents in the country.

"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 New York continues to see commute times and housing costs grow, the economic dynamism of the region will decline. Far from embracing necessary reforms, he says policy makers are making things worse by doubling down on rent stabilization, which limits how much landlords can raise rental prices. "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.

New York's housing situation has not reached California levels of dysfunction, but housing crises also aren't created overnight. Not building enough today can mean serious problems tomorrow.

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  1. The last thing I want is the person serving me coffee living next to me.

    1. You’re definitely part of the problem.

      Part of embracing liberty as a guiding principle of governance means renouncing any claim on where the person serving you coffee (or anyone else) gets to live.

      1. He simply expressed a preference. And we libertarians implement this particular preference through living in high priced neighborhoods.

        1. Land is zero-sum. Supply is not created in response to higher land prices. So forcing land prices higher in your neighborhood reduces the supply of land elsewhere – which means land prices outside your neighborhood also rise. And when this is accomplished mostly through government policy/subsidy/distortion, the result is 100% anti-libertarian.

          You are just proclaiming the govt-created status quo to be ‘libertarian’ because you are benefiting and you don’t want to admit you’re a welfare queen.

          1. re: “Supply is not created in response to higher land prices.”

            Boston would beg to differ.

            1. Nothing in that article says that at all. The Mill Pond dam was a private venture that didn’t create land – and apparently failed too leaving only stagnant stinking water. All the land creation mentioned in that is done by government – not the market ‘in response to higher land prices’. Same goes for the stuff in Netherlands, Dubai, medieval England, etc. All of which combined is itself marginal if not damn near non-existent compared to the total land supply that existed before humans invented tools.

          2. Land is zero-sum. Supply is not created in response to higher land prices. So forcing land prices higher in your neighborhood reduces the supply of land elsewhere

            The US is at rank 145 among world nations in terms of population density; land is not scarce or expensive in the US. The only thing that drives prices up in the US is what people do with the land. That’s why land in desert sh*tholes like Las Vegas and Los Angeles is tons more expensive than the rural South.

            You are just proclaiming the govt-created status quo to be ‘libertarian’

            Oh, we don’t need government for that, CCRs will do just fine.

            1. The US is at rank 145 among world nations in terms of population density; land is not scarce or expensive in the US.

              If ‘land’ worked the way marginalist economics said it does, then the shelter component of housing would therefore be cheaper in the US than most countries. Precisely because the other component costs are comparable or cheaper in the US – and there SHOULD then be competition and plenty of land supply. But except for the higher income, shelter is in fact NOT cheaper – and for the lowest 40% it is among the most expensive. Further, we also actually have relatively low homeownership rates compared to other countries – while also having the highest (or near) distortions in favor of homeownership.

              Likewise, if land worked the way marginalist economics said it does, then deRugy’s assertion a couple weeks ago in an article that a ‘1950’s standard of living only costs about 20% of today’s income’ would be true. When an average American household can’t even buy a 1950’s house now for that. Much less food, transport, utilities, etc that people in the 1950’s also had access too.

              But land doesn’t work the way marginalist economics says its supposed too. So all sorts of BS assertions about how things ‘work’ are simply – BS.

          3. #LockeanProviso

    2. Seriously, or are you just affecting the sort of snobbish sentiment you think might be operating in some people?

      If serious, is it something about the particular people you happen to know who serve you coffee? Or about that class of workers? Or is it a matter of your privacy or anonymity, such that you don’t like anybody to see too much of your life?

      1. You must be new here.

        Most of Fist’s comments are jokes. I think I’ve seen him (her?) make 3 or 4 serious comments in the nine years I’ve been on here.

        1. Joke or not, I’ve lived in low rent neighborhoods before. Jfree clearly has not. The self righteous virtue signalers have never had to deal with the sainted poor people they pretend to feel so much empathy for. He just likes to call the people who pay most of the taxes to our bloated government “welfare queens”. Now, that guy is a joke.

          Haha.

  2. My niece called me Thursday night, said the toilets wouldn’t flush, sinks wouldn’t drain, sewer water backing up in the tubs. So I went over there Friday, chased a hard clog out into the yard with a sewer tape, told her she was going to have to call a real plumber to dig up the yard, cut the sewer line, fish out whatever it was that had the pipe stopped up. Which she did, $350 and a day-and-a-half without being able to use the plumbing system, plus cleaning up the mess in the basement.

    My point is, NYC is like a giant sewer system and government clogs it up, you’re going to have to learn to pay to have it cleaned out occasionally and occasionally you’re going to be wading around in shit. Or, you know, you could just move somewhere else if you’re sick of dealing with the shit, but over there where the drains work fine I’m sure there’s some other sort of problem just as bad.

  3. The result is that more people are making longer commutes. The New York metro area has the fourth worst traffic in the country, and trains across the Hudson are as overcrowded as they are late.

    Before you make that commute, please consider the environment. Thank you.

    1. High Speed Light Bus-Rail, and ban cars. That’s the ticket.

      1. Isn’t that Miami Beach’s answer to the problem? Make it painful enough to live there and those awful human beings will stop wanting to live there. Instead of adding traffic lanes, take some out, instead of building new apartments, demolish a few high-rises, instead of getting rid of a few burdensome regulations, add a lot more. San Francisco might be on to something with the inviting homeless crazy drug addict illegal immigrants to come shit on the sidewalks downtown – it’s maybe not as effective at getting rid of people as Chicago’s plan of letting roving gangs shoot random passersby and robbing the survivors but we’ll see how well it works and then maybe we can get Bernie Sanders and Nancy Pelosi and Chuck Schumer to all work together to roll out a nationwide plan to get us all to move to Mexico.

        1. Mexico is too smart to let us in.

          1. We were promised Mexico was going to pay for a wall. And I have pointed out many times that walls that keep people out are just as effective at keeping people in. Schools, prisons, gated communities, border walls – it’s only a matter of which way the razor wire and the gun turrets face.

            1. Can we get a wall with gun turrets facing both directions? A nice wall needs protection. The Berlin Wall only protected one side. The other was covered with graffiti.

            2. I have been assured that illegal Mexican immigrants pay more in taxes than they receive in welfare.

              Mexico and its Mexican citizens are paying for the border wall.

              Gracias!

  4. Commuting into NYC via mass transit is a major pain in the ass.

    Forget trying to drive in. The Helix at the Lincoln Tunnel is just a huge caterpillar that don’t move.

  5. The Koch / Reason policy of unlimited, unrestricted immigration will fix any housing problem.

    #OpenBorders
    #ImmigrationAboveAll

    1. Refugees and immigrants from certain countries are used to living outdoors. They are the perfect solution.

    2. Make houses out of clay and use their corpses as insulation. Genius!

      1. A modest proposal

    3. Mass immigration increases housing demand and labor supply, increasing housing prices while decreasing wages, doubly decreasing housing affordability.

      Supply. Demand. Not rocket science.

  6. Not to worry.
    Global-climate-warming-change will kill them all by drowning before the housing becomes a real issue.
    Thus saith the AOC; all hail.

  7. ‘”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.’

    We call it “I’ve got mine” liberalism.

  8. All I know is that new York and New Jersey are likely losing House Districts to Red states, like Florida, Texas, and Georgia.

    1. Losing the well to do but not rich with the end of federal deductability of SALT.

  9. Shit hole country. They’re not sending their best, that’s for sure.

  10. Sounds dire, and we sure need zoning reform in this country. But if, say, 500,000 of the people taking those new jobs since 2008 already lived in the metro area and had been unemplolyed, then they already had housing, no?

    1. That doesn’t seem to be the case though. The region has grown by 3 million people since 2010, and added less than 1 million jobs since 2008. So even if the new jobs are going to unemployed current residents, there are still more new people moving in to the region

  11. ‘We’ll just convert businesses into housing. I mean, there are too many jobs, right? And, like, not enough homes for people who work those, like, jobs, right? Soooo, take the business and give it to the people who need them most! And the unemployment won’t go down because people are working two jobs anyway so they’ll still be working! Win! Win! Win! Problem solved! You should thank God I got elected.’

    AOC.

  12. Adding Jobs but Not Housing Is a Recipe for Urban Unrest

    Because, as everybody knows, it is a recognized libertarian RIGHT to engage in unrest when people offer you jobs at a salary that doesn’t give you convenient housing options! Even Jefferson said so. It’s right there in the Constitution! As libertarians, we need to point out these basic rights and gold our progressive city leaders accountable! /sarc

  13. That’s why I just shake my head whenever I read articles about these tech companies announcing they’re building new offices and creating 100,000-ish new jobs… in the San Francisco Bay Area. Just what that place needs… even more tech workers having to pay $3000/month for a shithole efficiency apartment or $5 million for a 2/1/1 home and adding to the traffic headaches.

    Why can’t these companies put these fabulous new jobs in, say, Detroit or Memphis or Des Moines? Tech work isn’t really location-specific, people are getting engineering degrees in the South and Midwest, and you could save a lot of money on wages that can still provide for a comfortable cost of living.

    1. What? You expect hipster-woke tech companies to set up in deplorable areas?

      1. I’m surprised that none of the democrat presidential candidates have proposed a modern version of the Homestead Acts, where the government buys up abandoned homes in rustbelt cities, fixes them up, then sells them to hipster families from the coasts, along with loans to big tech firms to relocate there.

        1. Oops-I meant gives the houses to the hipsters for free, along with paying off their student loans and free child/health care.

    2. Tech might not be location-specific but the workers, mostly single guys in their 20s-30s, don’t want to live in flyover country

      1. More…resources for us here. Keep flying over fly boys.

    3. Why can’t these companies put these fabulous new jobs in, say, Detroit or Memphis or Des Moines?

      Because the landlords of tech are NOT the engineers. They are the VC’s promising IPO’s and pre-IPO stock options as part of compensation. And that funding comes from the previous rounds of tech IPO’s – where those who made it rich then are sitting on extremely low Prop13 benefits. They ain’t gonna go to flyover country to oversee their investments so the serfs have to come to them and grovel.

      1. where those who made it rich then are sitting on extremely low Prop13 benefits

        Get off this hobby horse, already. You don’t understand CA property tax issues.

        1. Statutory prop tax rate in CA – 1%
          Average prop tax paid in Palo Alto – 0.42% – lowest in the state

          And yeah – it is Prop 13

          1. And from that article – Half of the top 10 California cities with the lowest effective tax rates are in Silicon Valley, with median home prices above $1 million: Palo Alto, Millbrae, Los Altos, Burlingame and Sunnyvale.

            where do you think the feudal lords of the older tech-IPO’s live? You wanna hint?

            1. where do you think the feudal lords of the older tech-IPO’s live? You wanna hint?

              Yeah. I live within about 40 miles of there. Getting constantly lectured on it by a guy who’s obviously never lived in this state and doesn’t understand the particulars gets annoying.

              You don’t understand how property tax works in CA. I’ve explained this to you before.

              Hint: we play games with language a lot in CA. Just because something isn’t technically counted as a “tax” doesn’t mean it’s not a tax. It’s how we do things here.

              1. I know the particulars a fuckload better than you think. LAND is my hobby horse – not prop taxes.

                And the reason Prop13 is the third rail in CA is also hinted at in that article:
                Most homeowners benefit from Prop. 13. More than 71 percent of Californians pay less than a 1 percent effective tax rate. More than 40 percent pay an effective tax rate of 0.5 percent or less, or half the Prop. 13 rate.

                IOW – I’ve got mine fuck you all. That is CA in a nutshell. Which would be perfectly fine – except that you assholes then lie through your teeth whenever you talk publicly about the problems there. And since CA is also a fucking obsession with Reason writers (and a media center anyway), it means that lie gets spread through both the articles and the commentariat. The only former Reason author who seems to get it is Virginia Postrel and she doesn’t write here much now

                1. Here’s a great article Postrel wrote for Bloomberg re the problem. Of course it’s possible she hasn’t lived in California long enough to understand all the nuances of language re ‘what is a tax’ in California

                  1. That article is about Props 58 and 193.

                    To quote: “By itself, Prop 13 is fine.”

                    The thesis statement:

                    “Economist Milton Friedman, who supported the original Prop 13, famously said that he was “in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.” Following that maxim, I voted for Props 58 and 193. It was a huge mistake — one I believe Friedman himself would recognize.”

                    If you’re so expert in the particulars, clarify what you mean by “effective tax rate.” Explain why Postrel argues that 13 was good but 58 and 193 bad. Notice Postrel’s article doesn’t breathe one word about why Prop 13 was passed in the first place or why property values rise so aggressively in CA.

                    Remove protections for homeowners from rape by the state artificially inflating property values and those people will get out of those homes? What a revelation!

                    And I get that LAND is your hobby horse, but frankly you don’t seem to understand land markets and their relationship to development and property values, either. You’re just repeating progressive/technocratic talking points about “PROP 13 BAD!! GOVERNMENT CAN’T FUNCTION!! THINK OF THE POOR!!”

                    you assholes then lie through your teeth whenever you talk publicly about the problems there

                    Or maybe you don’t understand a place you don’t seem to have ever been nearly as well as you assume you do. I don’t get the impression that Postrel ever lived here very long, either, so that particular appeal to authority falls a little flat.

                    You want to understand property values in CA? Look at land use restrictions. Address those, and we can start to talk about Prop 13. Oh, wait, you can’t, because this literally has nothing to do with you.

                    1. Explain why Postrel argues that 13 was good but 58 and 193 bad.

                      She doesn’t. What she says is that pure Prop13 distortions re any individual piece of individually-owned property would disappear over time because people die. Except of course that corporations DON’T DIE. They are granted eternal life BY THE STATE. Which means that, for them, those distortions compound over time instead. 58 and 193 allow individuals to pass land to their children and grandchildren without being reassessed – so those too now compound distortions over time forever. Prop 13 itself was merely a perpetual CORPORATE ownership loophole. Living breathing individuals required all three. Modern libertarians – as is always the case – wouldn’t recognize a corporate loophole if it sat on their face.

                      You’re just repeating progressive/technocratic talking points

                      No I am repeating what CLASSICAL economics – Smith, Ricardo, Mill, George (and yes Marx in his economic history of enclosure though not his economics where he too ignored land) – said about land.

                      I don’t get the impression that Postrel ever lived here very long, either,

                      According to the article she voted for 58 (1986) and 193 (1996) and still lives in California as of when she wrote the article (2018). So yeah – I suppose 30+ years – and most likely as a homeowner – just isn’t enough to get the ‘nuances’ of California semantics. Cuz in the lifespan of a corporation you know, 30 years is like nothing.

                  2. You sure do bitch a lot about how much other people pay in taxes. That’s ugly.

                    1. If only smart people like him could direct all of our resources, our problems would be solved.

    4. Tech companies locate in Silicon Valley because that’s where the founders and VCs live. Not only are they wealthy, they bought their homes a few decades ago. What used to be cheap rural land when they bought it is now prime upscale real-estate. They don’t want to move.

  14. When I first read someone’s analysis of state legislators in New York City as opposing gentrification as being really about locking in their current clientele of poor voters, I thought how cynical and implausible that was…for a few minutes. Then I realized it was all too true. It’s not always about catering to the privileged well-off.

  15. Let us also not forget that if borders were open, we’d see population skyrocket along with land valuation. You think it’s hard to buy a house now? Just wait until there are 30-50 million immigrants looking to a buy a home all at the same time.

    In California, for example, how much of the ‘housing shortage’ is caused by illegal, or even legal, immigration. I won’t pretend it’s the only factor there, probably not even the largest factor, but let us also not pretend it has no effect on housing or land valuation.

    I’m sure, though, that like all other things Reason writers assume a perfect libertarian paradise will already be in place once open borders comes into play. Gee, where have I heard that particular brand of disingenuous utopian thought before? Could it be I’ve heard it from socialists for decades? Nahh, must have been my imagination.

  16. If the state can force new housing they should also force no new housing. There comes a point in time – New York probably hit it decades ago – where a civilized society says, “no more”. Offer businesses incentives to move to less populated areas where housing is cheaper and easier to build.

    Ironically, some of the worst cities in the US dealing with unaffordability, homeless and housing shortages are the same ones that keep inviting illegal aliens to live there.

    Making our cities less liveable eventually (see San Francisco) will result in people leaving.

  17. The thing is, most of these jobs needn’t be in New York City. Hell, most of these jobs could be done from home. Corporate America needs to rethink this. How much time is wasted sitting in a box on wheels to go to a big box just so you can sit in there and stare at a screen connected to a wire?

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