Why Progressive ‘Myths’ Distort Solutions to the Housing Shortage
Urban Matters: Writing in Forbes magazine last month, you said that while passing Mayor Eric Adams’s “City of Yes” housing program is “a promising sign that many progressive politicians now recognize the need to increase housing supply,” pro-development momentum needs to be kept up. What might be the next steps in making that happen?
Richard McGahey: I worry that many progressives still cling to myths about housing (I wrote about this recently in Forbes), and focusing on those myths will slow or block positive momentum for new construction. For example, I was sorry to see Governor Kathy Hochul come out against private equity investments and use of rental algorithms in housing. While I’m no fan of either trend, they simply aren’t significant reasons for our housing problem, and wasting time and energy on such issues can divert us from real solutions to the housing shortage.
We need progressive politicians who can thread a very difficult needle: recognizing the need for private housing investment and avoiding excessive regulation while concentrating on affordability, in the face of some misguided left arguments that regulating housing is the central solution for the affordability crisis.
Brad Lander [now the New York City comptroller and then a member of the City Council] and others’ work on Brooklyn’s [2021] Gowanus rezoning and neighborhood plan, which had extensive community involvement resulting in significant pro-housing policy that also should increase affordability, is a good example of what we need.
UM: Back in 2023, talking about your newly published book Unequal Cities, you said that, “New York’s progressives need to look to Los Angeles, where a ‘triangle’ of unions and developers, communities of color, and environmentalists worked together for progressive goals.” Is that what happened to get City of Yes passed? Do you see such a coalition influencing this year’s New York City election outcomes?
McGahey: I don’t think the Los Angeles dynamic was reproduced here, although the Gowanus rezoning process has some parallels, with its continuous negotiations and communication and meaningful community benefit agreements. Rather, New York’s housing crisis just can’t be denied, and the Mayor and the Council engaged in some tough negotiations to achieve the wins in “City of Yes.”
The Los Angeles coalitions in fact are being shaken by their housing crisis (which preceded the recent horrific fires that will just increase the housing problem there). Mayor Karen Bass and many LA politicians are taking, at best, baby steps on addressing their housing crisis, locking in too much single-family zoning and doing very little to aggressively increase supply. A major danger in LA – and New York – is some progressives’ desire to address housing primarily through regulation and tenant rights, while downplaying or rejecting increased supply. That could be an Achilles heel for housing, and for progressive coalitions.
UM: Also on the subject of political will: A few weeks ago, a column by New York Times editorial writer Binyamin Applebaum argued that Donald Trump won last November, in part, because voters saw homelessness and the housing affordability crisis in cities like New York as proof that Democrats just aren’t up to the job of governing. Do Democrats have to own that judgment?
McGahey: In my view, Democrats have gone too far in creating excessive, uncoordinated layers of regulation, project review, and “community” input which often is dominated by wealthier single-family homeowners. In contrast, organizations like Open New York combine support for tenants with aggressive steps to increase housing supply, and that’s the kind of work Democrats (and all of us) need going forward. The solution isn’t unrestrained housing development. Without reforming single-family zoning and overcoming suburban economic and racial resistance to denser affordable housing, low-density suburban sprawl just contributes to our climate problem and unfairly burdens cities alone to solve regional housing problems.
UM: Final question. Just last January, Alex Schwartz, who chairs the graduate program in public and urban policy at The New School’s Milano School, told Urban Matters: “People in poverty simply cannot afford the basic cost of operating a housing unit. If rents only covered insurance, taxes, utilities, management, repairs, and other essential costs, and generated zero profit for the owner, they would still be unaffordable.” What does City of Yes, and increasing housing supply, do to reduce that problem?
McGahey: Alex, one of our best housing scholars and policy experts, is right. City of Yes does not primarily address the massive problem of economic inequality – in New York and America – which also has deep racial and ethnic bias built into it. Even with increased housing supply, which I believe (and research shows) will help slow and even reduce housing costs, too many people don’t have enough income for a decent standard of living.
The National True Cost of Living Coalition’s recent report documents the scale of the problem, and New York’s 2022 approval of City Charter amendments to document our true cost of living will give us a sobering picture of the city’s gap. But addressing income inequality requires a multifaceted strategy and will ultimately require a national movement. Progressives shouldn’t block good housing policy – like City of Yes, with all its shortcomings, or other efforts to increase housing supply – because it doesn’t solve the larger problem of America’s deeply rooted, multidimensional, racially biased economic inequality. More housing supply, including market-rate, is good for housing affordability. Progressives should support City of Yes and other efforts to increase New York’s housing supply across the board.
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: Steven Pisano