How New York City’s Affordable Housing Problem Can Be Solved

New York is in the throes of a “housing crisis” that never seems to end. Both our governor and mayor use the term. But our efforts to address high costs and a lack of affordability focus too narrowly — on how to provide below-market rental units in the five boroughs, whether through tax reductions or regulation of nearly a million “rent-stabilized” units.

The Empire State already has far more public and subsidized housing than any other state. As of 2021, according to federal Department of Housing and Urban Development (HUD) estimates, New York had 591,065 units of publicly “assisted housing,” or three units for every 100 state residents, which is double the national average relative to population and by far the most of any state.

Yet our housing crisis continues. 

Our problem lies on the supply-side — and not just in New York City. In fact, building new housing outside the city is a time-honored way to reduce price pressure in Gotham. But zoning regulations throughout the state suppress what should be the major source of new housing — private development. In comparison both to the national average and even neighboring Northeastern states, we fall far short in constructing both new homes and a variety of housing types which can bring costs within reach of buyers. 

Our shortfall is striking.

In 2021, when new housing starts surged across the country in the wake of the pandemic, New York State municipalities issued building permits for 40,135 residential units in single- and multi-family homes, a ratio of just 1.99 units per 1,000 residents. This was well below the 50-state median of 4.4 units per 1,000. Even neighboring Massachusetts (2.82), New Jersey (3.99) and Pennsylvania (3.68) approved more housing construction. 

Just as problematic is our lack of new housing variety. In 2021, New York residential building permits were concentrated in just two residential categories: single-family homes (11,099 units) and apartments in buildings of five or more units (27,510) units.

Across the Empire State, only 908 two-family homes were issued permits in 2021 — just three percent of the total — effectively limiting the range of housing types available, repeating a pattern from recent years. This “missing middle” in the new multi-family housing market is less reflective of consumer preferences than of the strict, single-family zoning prevailing in many municipalities across the state. 

Fully 25 percent of Queens and 22 percent of Staten Island remains zoned exclusively for single-family dwellings. In those areas, a single-family home could neither be replaced by a two or three-family home nor converted into one. 

The situation is more extreme in downstate suburbs such as Suffolk County, where single-family homes account for more than 81 percent of the housing stock. Among the nation’s 100 most populous counties, between 2008 and 2018, Suffolk and neighboring Nassau County ranked near the bottom in measures of new residential building permits per 1,000 residents.

Solving the problem of limited supply is less a cost problem than a political one. Suburbs marked by two or even four-acre zoning have to be convinced that opening their doors more widely will not lead to construction of the public housing they rightly fear (based on its history) or sharply increase their property tax burdens.

Here is where the can state can make a difference. Crucially, extra state financial assistance, triggered by relaxed zoning, could offset increased public school costs, if there is an increase in student enrollment. And municipal planning boards should also get the message that new housing within the range of teachers, firefighters and young families help to keep communities alive. New homes could also help keep younger New Yorkers from fleeing to upstate New York or moving to Florida.  

In addition to clearing away obstacles to more housing, the state should reverse the 2019 expansion of rent regulation, which historically has contributed to the scarcity of affordable rental housing options in New York City by discouraging turnover and rewarding those who are not needy. The city too, must reform its own property tax system, which discourages all but high-end apartment development.

New York’s housing crisis can be solved. But public policy, to date, has only managed to make it worse.

This piece is adapted from “The Next New York: Renewing and Reforming the Empire State,” a project of the Empire Center at NextNewYork.net.