New York City housing shortage

Last updated December 13, 2024

For many decades, the New York metropolitan area has suffered from an increasing shortage of housing, as housing supply has not met housing demand. As a result, New York City has the highest rents of any city in the United States.^[1]

The New York metropolitan area has long-standing exclusionary zoning practices, which were frequently rooted in racism. Restrictive zoning regulations, which prohibited multifamily residential use and affordable housing, were intended to prevent non-whites from moving to white neighborhoods.^[2]^[3]

The housing shortage in New York is driven by a lack of housing supply. Home construction in New York City lags far behind other major American cities.^[4] From 2010 to 2023, housing supply in the city increased by 4% while jobs increased by 22%;^[4] however, 973,000 workers commuted into the city from its suburbs as of 2019,^[5] as employment in New York City is not restricted to city residents. In these suburbs, restrictive zoning regulations are a key contributor to the undersupply of housing, as zoning laws either prohibit or disincentivize any but single-family detached homes in Nassau, Suffolk, Westchester, Putnam and other surrounding counties.^[2]^[3]^[6]

Within New York City itself, housing supply has been artificially limited by "warehousing" of unrented apartments^[7] particularly by landlords of rent-stabilized units who keep cheaper rental properties off the market in order to maintain overall profitability for their portfolio. In 2024, the landlord-advocacy organization CHIP estimated that 26,000 such units "is the minimum number of rent regulated units off the market" for this reason.^[8] A 2023 survey by New York City government estimated a total of "230,200 units that were vacant but not available"^[9] within the five boroughs of the city. The NYC Housing Authority counted 330,118 residents in 161,585 apartments within the public housing system in 2023.^[10] The maximum number of public housing units allowed by the 1998 Faircloth Amendment within the NYCHA system stands at 178,948,^[11] meaning an additional 17,363 public housing units could be constructed under the federal limits.

In the 2020s, some New York politicians pushed for ambitious plans to increase housing supply in New York by undoing some of the most restrictive zoning regulations to permit mixed-use development in areas previously exclusively for commercial use, allow accessory dwelling units in single-family zones, and allow dense housing construction near public transit stations.^[6] These plans faced considerable opposition by politicians from the New York suburbs, in particular, where zoning is most restrictive.^[12]^[6]

Supply factors

In the post-war era, New York, like most American cities, saw a sharp decline in population with “white flight,” an increase in highway construction, and the use of old commuter railroads for families who decamp from cities into newly built suburbs outside the city limits. Consequently, from approximately 1950 to 2000, New York City’s total population sat below its previous all-time high. This exodus from the city allowed rents to remain relatively affordable through the immediate post-war era.^[13]

However, in the late 20th century cultural changes increased demand for city life as individuals and families became increasingly likely to remain in cities, or at least delay moves to the suburbs. Jobs returned to downtown centers and demand for housing in New York boomed.^[14]

To absorb this demand, New York produced 2.2 units per job from 2001 to 2008. However, from 2009 to 2018 the City built just 0.5 units per job as land use regulation, historical preservation, and political opposition ground housing production to a halt.^[15]

Consequently, the cost of housing production has skyrocketed in New York. With little available land remaining for development, long approvals processes, and onerous building code provisions, production costs for housing have markedly increased at every step of the process. As a result, developers are unable to provide moderately-priced housing as the costs imposed by the City and local opposition forces have made housing for the middle class prohibitively expensive to build.^[16] Other regulations inhibit repartitioning existing units to accommodate more people. New York City housing codes prevent overcrowding by restricting the number of people who are legally allowed to occupy a unit, as well as the number of bedrooms within a unit.^[17]

Moreover, New York’s public housing stock, a vital tool for reducing homelessness and maintaining the number of affordable units, has fallen into disrepair as government management failed the City’s low-income residents.^[18]

Zoning

With production costs and zoning laws limiting private production of housing, and incompetence and criminal mismanagement reducing the efficacy of public housing, New York is facing a chronic housing shortage that increases costs for all New Yorkers looking to rent or buy a new home. Groups like the Citizens Housing and Planning Council and Open New York advocate for a resolution of the housing shortage through zoning reforms that would increase the rate of housing production.^[19]^[20]

In 2016, Mayor Bill de Blasio promised an even more aggressive plan to build and preserve 200,000 housing units over ten-years and he introduced mandatory-inclusionary zoning requiring 30 percent of all new construction units to be affordable. The goals of the initiative, which was called Housing New York, were later increased to 300,000 affordable housing units by 2026.^[21] By the end of his administration, in 2021, none of the goals of the program had been reached: although Mr. de Blasio claimed that he had succeeded in "fighting inequality".

Demand factors

Between 2000 and 2012, the median rent of an apartment increased 75 percent in New York City compared to 44 percent for the rest of the United States. The increase impacted the poor and working class most. There was a loss of 400,000 apartments renting for $1,000 a month or less (constant 2012 dollars) and a resulting gain of apartments renting over this. This was not a small shift but saw 240,000 units renting for $601–800 disappear and apartments renting for $1,201-1,600 having the highest gains. Median rent in constant dollars increased from $839 in 2000 to $1,100 in 2012.^[22]

Partially offsetting the growth in housing units was an increase in population to 8.6 million people. All boroughs, including the Bronx, are close to all-time population highs as of 2018. Factors include an increase in employment to 4.5 million jobs and a trend of decreasing crime.^[23]

Impact of affordable housing shortage

Overcrowding

Almost 1.5 million people live in overcrowded conditions in New York City. Overall crowding rose from 7.6 percent in 2005 to 8.8 percent in 2013 (a 15.8 percent increase). Overcrowding is not limited to low-income households, but is found at all income levels.^[24]

The California Health and Human Services Agency defines "severe overcrowding" as more than 1.5 persons per room.^[25] The severe overcrowding rate in the nation is 0.99 percent and is 3.33 percent in New York City.^[24]

Homelessness

In 2018 there were 63,495 homeless in New York City, including over 23,600 children. Total homelessness in the city had increased by 82 percent over the last decade.^[26] According to an agency funded by the New York State Education Department, there were 104,088 students (1 in 10) living in temporary shelters and identified as homeless in the city's school system for the period 2016-2017.^[27]^[28]

Homelessness is expensive for the city. Following a 1981 consent decree arising from Callahan v. Carey , the city is required by law to provide shelter to any eligible person who asks for it. To shelter one family in one of the 167 family shelters costs $34,573 a year. $1.04 billion was budgeted for 2014 to provide homeless services, up from $535.8 million in 2002.^[22]

Government initiatives

The city has had many periods of housing shortages in its history. Following a housing crisis in the 1920s, 700,000 units were built but in the 1930s people were again talking about a crisis. Mayors Fiorello H. La Guardia and William O'Dwyer dealt with slum clearance and building public housing. Rent control in New York, having begun as part of price controls on the United States home front during World War II, continued after the war. Robert F. Wagner Jr. and John Lindsay oversaw the Mitchell-Lama Housing Program. Ed Koch was mayor during a wave of housing abandonment which had to be addressed. This continued under David Dinkins and Rudy Giuliani.^[22]

Homelessness of individuals and families became a major issue during the 1980s and 1990s. Mayor Bloomberg's term in office saw an economically resurgent city. During this period, rents in New York City rose more than 15 percent over the increase in the country as a whole. His New Housing Marketplace Plan pledged to create 165,000 units of affordable housing between 2002-2014, of which 53,000 would be new units and 112,000 preserved units. The cost for this program was $23.6 billion, of which $5.3 billion was public funds leveraging $18.3 billion in private funds.^[22]

Related Research Articles

Public housing, also known as social housing, refers to affordable housing provided in buildings that are usually owned and managed by local government, central government, nonprofit organizations or a combination thereof. The details, terminology, definitions of poverty, and other criteria for allocation may vary within different contexts, but the right to rent such a home is generally rationed through some form of means-testing or through administrative measures of housing needs. One can regard social housing as a potential remedy for housing inequality. Within the OECD, social housing represents an average of 7% of national housing stock (2020), ranging from ~34% in the Netherlands to less than 1% in Colombia.

The New York City Housing Authority (NYCHA) is a public development corporation which provides public housing in New York City, and is the largest public housing authority in North America. Created in 1934 as the first agency of its kind in the United States, it aims to provide decent, affordable housing for low- and moderate-income New Yorkers throughout the five boroughs of New York City. NYCHA also administers a citywide Section 8 Leased Housing Program in rental apartments. NYCHA developments include single and double family houses, apartment units, singular floors, and shared small building units, and commonly have large income disparities with their respective surrounding neighborhood or community. These developments, particularly those including large-scale apartment buildings, are often referred to in popular culture as "projects."

<span class="mw-page-title-main">Single-room occupancy</span> Type of low-cost housing

Single-room occupancy (SRO) is a type of low-cost housing typically aimed at residents with low or minimal incomes, or single adults who like a minimalist lifestyle, who rent small, furnished single rooms with a bed, chair, and sometimes a small desk. SRO units are rented out as permanent residence and/or primary residence to individuals, within a multi-tenant building where tenants share a kitchen, toilets or bathrooms. SRO units range from 7 to 13 square metres. In some instances, contemporary units may have a small refrigerator, microwave, or sink.

The YIMBY movement is a pro-housing movement that focuses on encouraging new housing, opposing density limits, and supporting public transportation. It stands in opposition to NIMBY tendencies, which generally oppose most forms of urban development in order to maintain the status quo.

Affordable housing is housing which is deemed affordable to those with a household income at or below the median, as rated by the national government or a local government by a recognized housing affordability index. Most of the literature on affordable housing refers to mortgages and a number of forms that exist along a continuum – from emergency homeless shelters, to transitional housing, to non-market rental, to formal and informal rental, indigenous housing, and ending with affordable home ownership. Demand for affordable housing is generally associated with a decrease in housing affordability, such as rent increases, in addition to increased homelessness.

Secondary suites (also known as accessory dwelling units (ADU), in-law apartments, granny flats, granny annexes or garden suites) are self-contained apartments, cottages, or small residential units, that are located on a property that has a separate main, single-family home, duplex, or other residential unit. In some cases, the ADU or in-law is attached to the principal dwelling or is an entirely separate unit, located above a garage, across a carport, or in the backyard on the same property. Reasons for wanting to add a secondary suite to a property may be to receive additional income, provide social and personal support to a family member, or obtain greater security.

<span class="mw-page-title-main">Fulton Houses</span> Public housing development in Manhattan, New York

The Robert Fulton Houses is a housing project located in the Chelsea neighborhood of Manhattan in New York City, owned and operated by the New York City Housing Authority (NYCHA). The 6.27-acre (2.54 ha) site is located between West 16th and 19th Streets and bounded by Ninth and Tenth Avenues. The project consists of 945 apartments in eleven buildings; three of the developments are 25 stories, while the others are 6 stories high.

Rent regulation in New York is a means of limiting the amount of rent charged on dwellings. Rent control and rent stabilization are two programs used in parts of New York state. In addition to controlling rent, the system also prescribes rights and obligations for tenants and landlords.

Breukelen Houses, also known as Breukelen or Brookline Projects, is a large housing complex maintained in Canarsie, Brooklyn, by the New York City Housing Authority (NYCHA). Its main office is located at 618 East 108th Street, Brooklyn, NY 11236. It is bounded by Flatlands Avenue, East 103rd Street, Williams Avenue and Stanley Avenue. The community sits on 64.98 acres (26.30 ha) and consists of 1,595 apartment units inside 30 structures, all of which are either three or seven stories high. As of March 2008 the population was estimated to be 4,038.

Starting in the 1990s, the city of San Francisco and the surrounding San Francisco Bay Area have faced a serious housing shortage. The Bay Area's housing shortage is part of the broader California housing shortage.

The United States Department of Housing and Urban Development estimated that more than 181,399 people were experiencing homelessness in California in January 2023. This is one of the highest per capita rates in the nation, with 0.46% of residents estimated as being homeless. More than two-thirds of homeless people in California are unsheltered, which is the highest percentage of any state in the United States. 49% of the unsheltered homeless people in the United States live in California. Even those who are sheltered are so insecurely, with 90% of homeless adults in California reporting that they spent at least one night unsheltered in the past six months.

The term housing crisis refers to acute problems with the provision or market for shelter and lodging. These include shortage and affordability crises as well as financial crises related to the real estate sector.

Since about 1970, California has been experiencing an extended and increasing housing shortage, such that by 2018, California ranked 49th among the states of the U.S. in terms of housing units per resident. This shortage has been estimated to be 3-4 million housing units as of 2017. As of 2018, experts said that California needs to double its current rate of housing production to keep up with expected population growth and prevent prices from further increasing, and needs to quadruple the current rate of housing production over the next seven years in order for prices and rents to decline.

Silicon Valley, a region located in the southern part of the San Francisco Bay Area, is one of the most expensive regions to live in the United States, and many residents lack access to affordable housing. In 2018, the median home price across the area was $1.18 million, the highest of the 100 largest metro areas in the U.S. The growth of the technology industry in the area, including major companies like Google, Facebook, and Apple, is frequently cited as a major cause of the issue. There have been local efforts to address affordable housing, as well as state measures in response to housing issues across California.

Housing in the United States comes in a variety of forms and tenures. The rate of homeownership in the United States, as measured by the fraction of units that are owner-occupied, was 64% as of 2017. This rate is less than the rates in other large countries such as China (90%), Russia (89%) Mexico (80%), or Brazil (73%).

<span class="mw-page-title-main">Single-family zoning</span> Residential planning classification

Single-family zoning is a type of planning restriction applied to certain residential zones in the United States and Canada in order to restrict development to only allow single-family detached homes. It disallows townhomes, duplexes, and multifamily housing (apartments) from being built on any plot of land with this zoning designation.

Open New York (ONY) is a New York-based non-profit advocacy organization focused on addressing metropolitan New York's housing shortage by increasing the rate of housing production in the city and region. Part of the broader "YIMBY" (Yes In My Back Yard) movement, the group advocates for the lifting of exclusionary zoning restrictions and reforms to zoning regulations to enable more residential homebuilding in what it terms "high-opportunity" areas near job centers and transit with high incomes.

Carmel Place is a nine-story apartment building at 335 East 27th Street in the Kips Bay neighborhood of Manhattan in New York City. Completed in 2016, it was New York City's first microapartment building. The project won a competition sponsored by the New York City Department of Housing Preservation and Development to design, construct and operate a "micro-unit" apartment building on a city-owned site and pilot the use of compact apartments to accommodate smaller households.

The term "affordable housing" refers to housing that is considered economically accessible for individuals and families whose household income falls at or below the Area Median Income (AMI), as evaluated by either national or local government authorities through an officially recognized housing affordability index. However, in the US, the term is mostly used to refer to housing units that are deed restricted to households considered Low-Income, Very Low-Income, and Extremely Low-Income. These units are most often constructed by non-profit "affordable housing developers" who use a combination of private money and government subsidies. For-profit developers, when building market-rate developments, may include some "affordable" units, if required as part of a city's inclusionary zoning mandate.

Housing in Virginia comes in a wide variety of forms, from single-family homes to apartment complexes. The rate of home ownership in the Commonwealth of Virginia was measured at 69.1% in 2023, a 2.5% increase from 2022's figure of 67.4%.

References

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1 2 3 4 The Growing Gap: New York City’s Housing Affordability Challenge Archived November 27, 2018, at the Wayback Machine (2014) Office of the New York City Comptroller, Scott M. Stringer
↑ Purnima Kapur, Executive Director, NYC Dept. of City Planning, Michelle De La Uz, Commissioner, NYC City Planning Commission, and Rachel Fee, Executive Director, New York Housing Conference moderated by Brian Lehrer (May 30, 2018) Brian talks New York - The Housing Squeeze by Numbers Archived January 23, 2021, at the Wayback Machine (video)
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v t e Housing in the United States by state or territory
States	Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
Non-states	American Samoa Guam Northern Mariana Islands Puerto Rico U.S. Virgin Islands Washington, D.C.
Related topics	Architecture Economy Eviction Home ownership Homelessness California San Francisco Bay Area Colorado Florida Housing discrimination Housing insecurity California San Francisco Silicon Valley Mortgage industry Organizations Policy Homestead Acts Right to housing Slum clearance Subsidized housing Racism Segregation Squatting Zoning Missing middle housing NIMBY Parking mandates Single-family zoning YIMBY