A Big Deal That’s Not Nearly Big Enough: What the ‘City of Yes’ Will (and Won’t) Do
Urban Matters: “The greatest city in the world has just passed the greatest housing legislation in our history.” That’s how Mayor Eric Adams – rarely given to false modesty – characterized the New York City Council’s December 4th approval of his administration’s “City of Yes” zoning overhaul, intended to spur new housing development in all five boroughs.
In your opinion, just how big a deal is this? Adams also called this “the start of a new era of affordability?” Is it likely to achieve that?
Richard McGahey: With its sights set on developing 80,000 new housing units over the next 15 years, “City of Yes” is simultaneously a big deal and also inadequate for addressing the city’s housing supply and affordability gaps.
On the plus side, the City Council supported significant zoning changes that should lead to more housing construction, which in turn will help affordability through increasing supply. On the minus side, the plan was scaled back to accommodate single-family housing, cuts development options near transit sites, keeps too much parking, reduces combined commercial-residential projects, and over-regulates so-called “accessory dwelling units” (ADUs), like stand-alone backyard living quarters [sometimes called “mother-in-law” apartments].
UM: The City of Yes rezoning took some fairly small ideas – legalizing basement apartments, residential conversions of some office space, building housing above commercial storefronts, others – and bundled them into one package intended to create “a little more housing in every neighborhood.” Have we now run through these kinds of options, or are more similarly bite-sized reforms available?
McGahey: Hopefully, we will go back to the original City of Yes proposals and restore some of the anti-housing steps negotiated with the Council. Estimates are those policy changes will cut the housing units from the City of Yes by 26,000 units, almost 25 percent of the original projections. And there are other things we need that would help housing supply, focused more on speeding up project approvals while reducing delays caused by excessive procedures and reviews – steps currently built into law and practice. Adams has now also called for a “Manhattan Plan” to add another 100,000 units on the island over the next decade through rezoning.
UM: And he just gave a newly appointed City Charter Revision Commission the task of seeing how the city’s basic governing document might be tweaked to encourage or speed up housing creation.
But let’s step back for a minute: With people giving up on New York because of housing costs, is what we have here still just a matter of thinking too small?
Take the City of Yes goal of 80,000 new housing units in the next 15 years – and then top that up with, as you just said, as much as another 100,000 Manhattan units. The Department of City Planning has a bar chart showing New York City created nearly four times that much in the 1950s and 60s – the era that saw massive public housing investments, along with Rochdale Village in Queens, Co-op City in the Bronx, and other sizeable middle-income developments that were subsidized by government big-time. Now we use zoning incentives to coax more housing from private developers. Is that good enough to get us what we need?
McGahey: The positive steps in City of Yes, welcome as they are, are not sufficient to address our long-term housing shortage. Because we failed to build enough housing for many years, we are hundreds of thousands of units below where we should be. The most recent apartment vacancy rate was 1.4 percent, not even enough to account for frictional movement [the natural, expected turnover rate in a healthy housing market] by existing renters.
We should be open to all ways of increasing housing supply, but private markets are essential for addressing the problem. City and State government are not fiscally able to make massive public housing investments. NYCHA’s [the New York City Housing Authority’s] budget and management track record does not inspire confidence in long-term operation of public housing. And the Trump administration is likely to reduce the nation’s already inadequate aid to cities. So, allowing some carefully designed and monitored incentives to private developers for creating new units, both market-rate and affordable, must be a significant part of the supply equation.
Next week, McGahey identifies political blind alleys and paths forward in addressing the housing crisis.
Richard McGahey is an economist and a senior fellow at the Schwartz Center for Economic Policy Analysis, and also at the Institute on Race, Power, and the Economy, both at The New School. He is the author of Unequal Cities: Overcoming Anti-Urban Bias to Reduce Inequality in the United States.
Photo by: Doug Kerr