Less Regulation to Produce More Housing

What’s the best way to increase the amount of affordable housing in New York City. The New York Times digital edition recently featured a collection of proposals that address this issue.

Most of the proposals were more of the same old: strengthen rent regulations, preserve public housing, tax increment financing, nonprofit ownership and other mechanisms that have been used in NYC to a greater extent than anywhere else, but have all failed to solve the “affordable housing crisis”.

Only one proposed solution has not been tried in New York and it comes from Ed Glaeser, an economics professor at Harvard University, who understands the laws of supply and demand. Professor Glaeser proposes a simple solution of easing housing demand by increasing the supply of housing. And the way to increase supply is to remove the barriers to building created by land use regulations such as zoning, historic preservation and air rights (and we should add rent regulations and labor practices).

But New York City, under Mayor Michael Bloomberg, has moved in the exact opposite direction. Major rezoning, affecting 40% of the city, has downzoned neighborhoods where developers were building higher-density market-rate housing without taxpayer subsidies. Development has instead been funneled into smaller development zones where even greater density will be required, together with subsidies to produce affordable housing.

Alms for the Upper Middle Class: Subsidized Apartments Aim at $200K Earners

 

 

 

 

By Stephen Jacob Smith

Standing outside a shiny new red and tan brick building at 401 West 25th Street, indistinguishable from any other late-2000s new construction throughout the West Side, you can catch a glimpse of the future of housing if New York City’s Democratic mayoral candidates get their way.

A young woman who works in finance and moved into this building from a “real shithole” in the West Village, a computer programmer from South Carolina, a lifelong New Yorker who moved in from the projects a few blocks south, and a gay couple—one a playwright, the other a social worker—with a son, who moved from 14th Street and Seventh Avenue.

Inside an Elliott-Chelsea apartment.

They all found places in a 22-story middle-income affordable housing development in an increasingly unaffordable Chelsea. The Elliott-Chelsea, developed by Artimus Construction, rose on New York City Housing Authority property with the help of an alphabet soup of government agencies. Some of the 168 units in the  building are typical low-income units, reserved for families earning under $40,000 a year. But the bulk of the complex is set aside for middle-income earners, a group that this cycle’s crop of Democratic mayoral candidates is eager to court.

Some of these units can legitimately be called middle-income apartments, with half a dozen one-bedroom apartments available to couples earning a combined $64,000 to $101,000 a year. But there are also 45 two-bedrooms that go for $3,421 a month, for households, no matter the size, ranging in income from $119,143 to $190,080. In the world of New York City affordable housing, this is what passes for middle-income.

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