New York City Mayor Eric Adams is addressing the New York housing crisis with his “City of Yes” plan … [+]
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Like other American cities, New York is struggling to address its housing crisis. A decades-long failure to build enough housing is causing rents to skyrocket beyond incomes and wages. And overly expensive housing could have major negative effects on the city’s economy and population, with the burdens falling most heavily on low-income people.
After decades of inadequate housing policy, New York is now moving forward with Mayor Eric Adams’ “City of Yes” proposal—zoning and other reforms aimed at increasing new housing construction. But while the proposal is welcome, it won’t be enough to fully address the city’s long-term housing problem and the economic and social threats it poses.
Housing Crisis Now Threatens New York’s Economy
New York’s housing crisis is the result of two longer-term trends: job and population growth, and stagnant new housing construction. While the city added jobs and new residents, little housing was built.
Experts now estimate the city needs hundreds of thousands of new units just to close the gap. And housing production still is not keeping up. There are estimates that the city needs up to 50,000 new units per year, but only 27,980 were completed in 2023, while permits to build new units actually fell.
Other data reinforce the severity of New York’s housing shortage. In 2023, the net rental apartment vacancy rate hit 1.4%, the lowest since 1968. Such a low rate likely doesn’t even account for people moving from one apartment to another, or renovations and repairs, much less new residents seeking to live in the city.
Not surprisingly, such a low vacancy rate drives up rents. The New York City Comptroller’s office reported that “median ‘asking rent’ on publicly listed apartments available for leasing rose to a record high level in 2023.”
Those rent levels and increases translate into a housing affordability crisis. The Comptroller reports that rent level means “a household would need to earn $140,000 or more to not be rent-burdened (defined as paying 30% or more of income on rent). This income level is nearly double the median NYC household income level in 2022.”
This yawning gap in housing availability and affordability threaten New York’s future prosperity. The Regional Plan Association estimates that by 2035 the entire New York region could lose $900 billion in GDP, 730,000 new jobs, and billions of dollars in tax revenues. Since New York City drives the region’s economy, many of these losses would fall directly on the city.
Mayor Adams and “The City of Yes”
Faced with the ongoing housing crisis, New York’s Mayor Eric Adams proposed an ambitious plan—the “City of Yes”— to produce over 100,000 housing units in the next 15 years. The new housing would come from private developers, largely by changing single-family and other zoning restrictions allowing denser development in many parts of the city. The plan also would reduce expensive parking mandates, and other administrative barriers.
The plan got substantial pushback, from an odd combination of conservative single-family neighborhoods opposed to greater density, and progressive advocacy groups suspicious of private developers.
Single-family neighborhoods feared new development without mandated parking construction would make parking hard to find. Progressive opponents, in turn, argued for more affordable housing units and strong restrictions on for-profit development .
The Adams administration, led by City Planning Director Dan Garodnick, negotiated a deal to get the City Council’s approval. They accommodated single-family neighborhoods by continuing mandated parking for new residences (which reduces the space and resources available for housing), restricting development of alternative development units (ADUs) on existing single-family lots, and limits on denser housing near mass transit.
Progressives negotiated another $5 billion in city and state funding for affordable housing, infrastructure, tenant protection measures, and focusing eligibility for affordable housing on lower-income households.
The resulting package is now estimated to produce an additional 80,000 housing units over 15 years, down by around 30,000 from the original plan.
“City of Yes”: Progress, But Inadequate
“City of Yes” represents important progress for New York City on housing. For years, the city’s housing supply has been held far below the city’s needs, from a combination of inadequate policies and political opposition.
That opposition is an odd coalition of single-family homeowners and some leftish advocacy groups. It is rare to see an issue that brings conservative Republicans on Staten Island and elsewhere together with leftist environmental and tenant groups.
Of course, those groups want very different things—no affordable housing or density increases for conservatives, especially in their neighborhoods, and a lot more—even exclusively—affordable housing and extended rent regulation for the leftists.
If “City of Yes” is ultimately enacted, it is a promising sign that many progressive politicians now recognize the need to increase housing supply. City Comptroller Brad Lander, a progressive running for Mayor next year, was a strong supporter of the proposal, like several City Council members and other political leaders.
But by itself, “City of Yes” isn’t enough. Estimating 80,000 new housing units over 15 years gives an average of around 5300 new units annually. While that would be a welcome addition, Curbed reporter Kim Velsey notes “Adams has said that the city needs to add 50,000 units per year, nearly double the 27,980 that were added in 2023.” (Curbed humorously described the city’s revised and downsized proposal as the “City of Yes-ish.”)
So two cheers—not three— for the “City of Yes.” Hopefully, it represents a break from kneejerk anti-housing policies that have stifled new supply and helped create the housing affordability problem New York (and other cities) now face.
But the momentum needs to keep going, to assure the “City of Yes” proposals aren’t further watered down and additional efforts to increase housing supply will be undertaken. New York and other cities unfortunately have contributed to the housing affordability crisis through misguided policies, and it will take years and new pro-housing development policies to overcome it.