421 Ways To Improve Housing…🎶

Welcome to N/Y(C) IMBY — the blog about building a better New York for New Yorkers in their own backyard. It seems that the New York skyline is constantly changing, new projects frequently enter the development pipeline, and many of them promise to “revitalize” struggling neighborhoods after a particularly difficult few years. Plans pitch affordable housing, office space for local nonprofits, schools, parks, and community centers.

And that revitalization is often needed. The post-pandemic economic recovery in New York City lags behind the comparably quick bounceback seen across the rest of the United States. As of August, the city’s unemployment rate sat 32% higher than the national average and has yet to reach pre-pandemic levels. Employment figures in retail, entertainment, and manufacturing sectors shrunk by more than 10% over the past four years. In June, hotel occupancy sat 10% lower than 2019 highs. Subway ridership stagnated at 70% of peak, while average weekday office occupancy hovers around 50%. New York City’s population shrunk by 400,000 since June 2020.

With those figures out of the way, it’s clear that New York City is struggling to draw people after a multi-sector nosedive. Despite a lackluster economic comeback, the cost of living continues to skyrocket. Since November 2019, rents in Manhattan and Queens climbed 17%, while Brooklyn and the Bronx lead the pack closer to 20%. If there’s fewer people, fewer jobs, and mounting fiscal and social issues, why is demand for housing so high?

The issue is supply, supply, and supply. Over the 2010s, New York City added a whopping 500,000 new residents. But, only 100,000 units of housing were built over the same timeframe. During that same period, luxury mega developments like Hudson Yards and Long Island City dominated local headlines boasting thousands of new units at sky-high prices. Most of the 500,000 people who moved to New York City during the population boom can’t afford to spend between $3,500 and $10,000 on rent per month. Developers overbuilt luxury housing, the price points didn’t meet local needs, that mismatch increased demand (and prices) for reasonably priced apartments. New York lags the rest of the country in affordable housing per capita by around half.

So what drove large development companies to build massive, high-end giga-projects that wouldn’t serve the needs of the local community? Some would say greed, but the on-record answer is a tax loophole by the name of 421(a). From 1971 to 2022, developers could promise to match some units’ rent to local income levels in exchange for property tax exemptions for 15-25 years. In theory, New Yorkers with lower to moderate incomes could benefit from newer homes and high-end amenities while landlords’ profits were buoyed by market-rate tenants and lower taxes. Over five decades, the program sponsored the development of 117,000 units. In Long Island City, builders planned over 3,000 affordable units. The backers of Hudson Yards are on the hook for thousands of affordable units in their upcoming second phase.

But, the program as we know it lapsed as of June 2022. Attempts to revive development incentives have stalled in Albany and dozens of affordable developments across the city are on hold. Opponents claim the $1.7 billion in tax revenue lost annually could be used to build more city-sponsored housing. Advocates say it’s the best plan possible. But, the 2023 budget season in Albany came and went without a new plan. So for now, it seems like New York City’s affordable housing stock is stuck in limbo. More people are competing for fewer affordable homes. And that’s where we’ll pick up next week.

If mid-market supply is the issue, why don’t developers just shift to producing less expensive homes? That will be our focus for the coming weeks. I’m excited to explain the quirks, traps, and runarounds written into bureaucratic codes across the city that makes New York a notoriously difficult place to build. We’ll dive into zoning restrictions, size requirements, housing proposals that rankle landlords, landlord proposals that rankle officials, and more. Next week, we’ll discuss new zoning proposals meant to spur construction of affordable homes put forth by Mayor Adams recently.

Thanks for sticking it out for this long through a bunch of facts, figures, and findings. As a reward, I’ll share some “hits and misses” — one example of great land use and another that is…questionable at best. This week, give a round of applause for the folks behind Innovation QNS in Astoria, Queens. The newly approved, transit-accessible development includes two acres of open space, a community hub for non-profits, wellness facilities, shops, restaurants, entertainment, and nearly 3,000 apartments — with around 45% of units carrying the affordable designation. Props to Innovation QNS!

Well, you might be surprised that the “miss” is also Innovation QNS…the project currently consists of a dirt pit and some big-box stores. What happened to all those new homes and great amenities? They’re waiting in the wings for a successor program to 421(a)! See below for some pictures of what’s there now versus what New Yorkers deserve.

Same time, same place next week! Take care.

421 Ways To Improve Housing…🎶

Saying “Yes” to the “City of Yes”