by Nuria Forqués

New York resembles an unfinished puzzle, one of those where some pieces (even if they belong there) do not seem to have an assigned home. They drift around, despite efforts to integrate them into the big picture. We think of them as the problem, denying that what is really failing is the arrangement of all other pieces. To blame a few, forcing them into a place they do not belong, is easier than questioning the arrangement of the whole structure. But to seamlessly house all the pieces, we will need a better understanding of the connections between them. Only then will things fall into place.

When I first faced the challenge of finding a room in New York, the prices shocked me. At first, I tried hard to be at the core of the city. As a foreigner and a newcomer, Manhattan shined brighter than any other borough of this city, and that is where I wanted to be. I initially landed deep in Queens, and the hour and a half commute added light to the central diamond where I would work on weekdays and explore on weekends. I started looking for rooms and I thought I found some deals, but I couldn’t live in a 3-person-shared studio in the Upper East Side. I couldn’t breathe in a no-window railroad-style bedroom, I couldn’t fit in a walk-in closet in a five-story walk-up apartment in the core of China Town, and I couldn’t afford any of them either. Clearly, my price range didn’t include the skyscraper island. Manhattan quickly dropped off the list of possibilities. I wandered around and finally landed in Brooklyn, and there I stayed.

But finding housing in Brooklyn was tricky, too. Rooms seemed slightly bigger, but prices were only slightly lower. Thus, I learnt that proximity to Manhattan and closeness to the subway are costly. It was ultimately those costs that ended up dictating the length of my commute and, therefore, the location of my home. When I moved to my new Windsor Terrace room in Brooklyn, from Jamaica, Queens, my commute halved down to a tolerable 40 minutes. Even then, I needed some time to accept that a short walk to work in this city is a luxurious asset that few can afford.

I was lucky, though. I found an acceptable place among a few available options, while many New Yorkers do not even have a single option. As the city population grows, the shortage of housing increases and more of us get pushed out. Longer lives, babies and immigration (myself included) mean that New York is adding people much faster than it is adding housing. Housing unaffordability affects more sectors of the city’s population every day. Gentrification is an old neighbor here. It started in Soho between the 1960s and 1980s and, ever since, it has been changing, fast and merciless, any new neighborhood touched by its magic wand. Sometimes, even, there’s more than one wave of it. Most New Yorkers are part of this dynamic. First, you get gentrified, then priced-out, then you become the gentrifier. Unfortunately, once a home is lost, those with fewer resources sometimes have nowhere else to go. New York is not for them anymore.

The lowest-income group of New Yorkers are the ones suffering the most during this affordability crisis. They are those pieces of the puzzle that no one wants to deal with. Yet, this issue spreads through all income brackets. The reason is that affordability is not an absolute value but a relative one. Depending on your income, you can or cannot afford to live in a specific neighborhood.

For housing to be considered affordable, it must cost less than 30% of a household’s income. Under this definition, as per the latest release of the NYC Housing & Vacancy Survey1 on 2014, only 44% of New York’s renters make the cut. The remaining 56% are rent-burdened. Within the rent-burdened group, there are shades, too, with 30% of total renters severely rent-burdened. It means that 30% of the city’s renters are spending more than 50% of their household income in rent. For homeowners, the same scheme applies. As we can see in the following graphic from Governing2, based on the U.S. Census Bureau: 2010-2012 American Communities Survey, the only sector where affordable housing is available for more than half of the group (74.3%) is that of homeowners with housing units without a mortgage. This sector represents a very small portion of the total city’s population (around 4%), confirming that unaffordability affected most demographic groups of New York City in 2010 and continues to worsen. As 62.4% of the city’s housing stock are rental units and affordability figures vary slightly between renters and homeowners, from now on, we will focus on rental data.

All the numbers exposed above highlight the housing shortage that any New Yorker feels without double-checking the math. A fast-growing population is stressing a slow-growing housing market. In 2010, the US Census Bureau published a demographic study that showed population projections for the city of New York through 20403. It also included housing unit projections for the same period. The numbers show that New York will add almost a million inhabitants from 2010 to 20140, growing its population from 8,242,642 New Yorkers in 2010 to 9,025,145 in 2040. For housing, the equivalents are 3,375,002 housing units for 2010 and 3,696,359 for 2040. Comparing these, they translate into a relationship of 2.442 persons per unit in 2010 and 2.441 in 2040. Basically, the rate remains the same.

For 2010, this person-per-unit rate along with a 2.91% vacancy rate -or percentage of empty apartments- and the unaffordability rate showed in the graphics above, gives us a sense of how tight the housing supply is, compared to how large the demand is for it. Thus, as the law says, prices rise, and we end up with the high rent-burden situation we were describing before. For the long term, what these projections mean is that the current housing shortage is here to stay for a long time. The equilibrium between demand and supply remains unbalanced, and rent prices are likely to keep rising, which will burden households even more unless income starts to follow the same trajectory. In other words, if affordability was unreachable for 54.1% of New York renters in 2010, with a person-per-unit rate of 2.442 as a consequence of a housing shortage unbalancing the market; in 2040, with a 2.441 rate, the problem, it seems, will remain unsolved.

As it turns out, these projections (gloomy as they are) may have actually underestimated the scope of the problem. According to the projections, the population in 2014 was supposed to be 8,365,963 and the number of housing units 3,426,2714. But actually, in 2014 8,491,079 New Yorkers were living in 3,438,742 units5. What this means is that New York City acquired one hundred thousand people more than expected and the number of housing units failed to keep up. Consequently, the person-per-unit rate increased to 2.469 – well above the 2.441 figure projected for that year by the US Census. As close as these numbers may seem, to achieve the projected 2.441 rate -which we already know does not provide a good market balance as per our 2010 analysis – New York City would have had to add 38,770 extra housing units to the housing market on 2014.

nuria-forques_fig05

In 2015, the discrepancies between reality and projections accentuated. In 2014 the city was lacking almost 40,000 units to maintain the rate of persons per unit projected by the US Census; in 2015 the number scaled to almost 50,000 housing units missing. Although the exact count of the total number of housing units on 2015 is unavailable, the 2016 Housing Supply Report6 published by the NYC Rent Guidelines Board states that there were 14,357 new units completed in 2015 in the city. Adding these units to the 2014 stock (ignoring demolitions, in a spirit of mathematical optimism), we still need 48,903 extra units just to match the housing shortage of 2010. In other words, the housing shortage is getting shorter and more pieces are being displaced.

To get a sense of the trajectory of the rent burden, we can contrast affordability rates in 2010 with those of more recent years. The numbers for 2016 are truly alarming.  As per StreetEasy’s State of New York City Rent Affordability report of 20167, rent burdened households in NYC went from 59.7% in 2015 to 65.2% in 2016 and two-thirds of New Yorkers are now spending more than 30% of their income on rent. These two-thirds of New Yorkers belong to all income brackets, from the very bottom to the top and they live in all neighborhoods of the five boroughs. The numbers fit with our analysis about a housing market failing to host the growing number of newcomers. Thus, rents keep rising at the pace of an increasing housing shortage. They rise faster than incomes, pushing a bigger number of people out of the puzzle and into the unaffordability pool, while further stressing households that were already part of those drowning to pay their rent.

The amount and the speed at which affordability numbers are evolving indicate a city-wide crisis. The Mayor’s Office is aware of it and is trying to address the problem by implementing its Ten-Year Housing Plan. Shortly after taking office in 2013, Mayor Bill de Blasio announced an ambitious 10-year plan “to build and preserve 200.000 housing units.”8 Of those, 80.000 would be new units, and the rest would be preserved units. The plan bases its policies on neighborhood rezoning and air rights incentives for developers choosing to dedicate part of their projects to inclusionary housing, allowing developers to build bigger and taller in exchange for adding affordable housing. Rezoning includes mandatory inclusionary housing in some areas, too. This plan proposes affordable units for all income-brackets, emphasizing the lowest ones, as they’re the ones the market disregards the most.

The Ten-Year Plan application date started in 2014 and will be due in 2024. Currently, two years into it, it is keeping with the projections or milestones that the Mayor’s Office established. Yet, even if they manage to build all the proposed units by 2024, will it be enough to solve New York City’s affordability crisis? Let’s revisit the numbers.

If the demographics behave as per the US Census projections, in 2024 there would be 8,658,993 New Yorkers and 3,627,735 + 80,000 housing units, considering that the new units the plan proposes are in addition to the projected ones, and avoiding distinctions between affordable and non-affordable units. With these data, the person-per-unit rate would improve to 2.38, loosening the housing market. Unfortunately, real numbers differ. As commented above, last year the city was missing 50,000 units to be at person-per-unit levels of 2010 -far from affordable. If we added the 80,000 units into the 2015 data equation, it shows a 2.42 rate. Though more positive than the actual 2.47 rate in 2015 and the 2.44 rate in 2010, this helps us highlight that, even if we added all of the housing units proposed by the 10-Year plan today, it seems unlikely they would be enough to solve the affordability crisis for 65% of New Yorkers today. And we still have eight more years of demographic surprises to come, confounding projections.

The horizon seems hazy and hopeless as more pieces struggle to fit in the city’s housing puzzle, but this is not the first time the city of New York has faced an affordability crisis. New York City was a national pioneer in proposing and providing affordable housing when densities began rising in the early 20th century. Later in the century, the city faced several more affordability crises, as the population surged in response to wars and economic expansion, and the housing sector failed to keep up9. When proposing solutions to this problem, historically, the city has approached it in two different ways. It either builds new affordable units with public money or promotes policies for the private sector to take the initiative. Currently, the 10-Year Plan is relying on the latter option, leaving the production of affordable housing to the private developers through incentives. Historically, though, the city has failed to react on time with this approach, as it happened at the beginning of the past century and during the 1960s. Historically, the city has succeeded in improving housing affordability through the direct investment of public money into new public housing. Perhaps this would be an alternative way to react quickly to an imminent crisis.

There seem to be other layers interfering with the current situation. We commented before that the housing affordability crisis is the output of the law of supply and demand. As supply rises like a tortoise and demand rises like a hare, the law says that New Yorkers will keep racing away from affordable housing. Facing this situation, we would expect the whole city to develop at a fast pace until supply balances the demand. Yet, this expected speed is only appearing in some areas. Most neighborhoods continue changing slowly, and at low densities. As per the 2016 Supply Report6, 23.5% of all building permits issued on 2015 were for single-family buildings and 19.2% for two-family. Together, it means that the city dedicated 42.7% of its ongoing construction to the tortoise, ignoring the speeding demand. Even if these numbers broadly simplify the complex factors affecting housing in NYC, they expose the fact that the market is not reacting as it would be expected to react. Some pieces are disconnected.

Overlapping the New York Densities Map with the Subway map helps us understand another possible factor in this market equation. In the image below we can see how densities, even in more peripheral areas, are much higher where a branch of the subway system extends. In contrast, where no branches arrive, densities drop. In a recent New York Times’ article10, they call those unconnected areas “subway deserts.” People who commute from or to those areas often need to transfer several times in any combination you can think of. These difficult commutes translate into enervating and time-consuming routines that showcase a missed opportunity to address the affordability crisis.

People’s preference is to live as close as possible to where they work. Most people would consider an average commute of 30 minutes, but fewer will consider an hour-long commute. Thus, those looking for housing prioritize areas located within an approximate 30 minutes radius from their workplace. The history of New York City’s subway construction provides insight into this behavior. Before building the subway, New Yorkers commuted by elevated trains and streetcars. These were slower and more expensive, so many chose to walk to their jobs, which were mostly concentrated in downtown Manhattan. Hence, four years before opening the subway in 1904, 50% of the New York City population lived in Manhattan, making the highest densities in the city those in Lower Manhattan. Implementing the subway and offering affordable rates twenty-four hours a day meant that fifteen years after finishing the subway´s construction, 75% of the New York City population lived outside Manhattan –in places where housing offered more for less. In the following video, you can see the evolution of Manhattan Densities and the quick spread after the first decades of the twentieth century -when the subway construction was completed.

This proves that infrastructure has a big impact on where people end up living and the densities they live at. One option for New York would be to start building more, faster, and better-connected subway lines. If this is impossible, then zoning laws would need to respond instead, increasing and adapting the FAR dramatically in places where the subway is more accessible. Probably both things should be done to really increase affordability and make room for all New Yorkers, and the New Yorkers yet to come.

References:

  1. 2014 Housing and Vacancy Survey Report (http://www1.nyc.gov/site/hpd/about/nyc-housing-vacancy-report.page)
  2. Housing Affordability Burden For U.S. Cities (http://www.governing.com/gov-data/economy-finance/housing-affordability-by-city-income-rental-costs.html)
  3. New York City Population Projections Age/Sex & Borough, 2010-2040, The City of New York, Department of City Planning, December 2013 (http://www1.nyc.gov/assets/planning/download/pdf/data-maps/nyc-population/projections_report_2010_2040.pdf)
  4. Projections calculated with linear functions based on the data provided by the New York City Population Projections Age/Sex & Borough, 2010-2040.
  5. State of New York City’s Housing and Neighborhoods in 2015, Furman Center, May 2016 (http://furmancenter.org/files/sotc/NYC_Section_3_SOCin2015_6MAY2016-9.pdf)
  6. 2016 Housing Supply Report, New York City Rent Guidelines Board, May 2016
  7. The State of New York City Rent Affordability in 2016, Street Easy, Alan Lightfeldt, April 2016 (http://streeteasy.com/blog/new-york-city-rent-affordability-2016/)
  8. Mayor Bill De Blasio on his Letter from the Mayor, featured in Housing New York, A Five-Borough,Ten-Year Plan, 2014.
  9. For more information on this matter, check Reaching affordability. A retrospective on New York’s housing, Improvistos, Nuria Forques, April 2016 (http://www.improvistos.org/es/reaching-affordability-a-retrospective-on-new-yorks-housing-en/)
  10. New Yorkers in Subway Deserts Have Advice for L Train Riders: “Suck it Up”, Emma G. Fitzsimmons, August 2016

 

Credits of images:

Fig01: Forques Puigcerver, Nuria, New York’s skyline, 2016

Fig02: NYC Department of Housing Preservation and Development, NYC Housing & Vacancy Survey 2014, 2014 (http://www1.nyc.gov/site/hpd/about/nyc-housing-vacancy-report.page)

Fig03: Governing, Housing Affordability in US Cities, New York City, 2012 (http://public.tableau.com/views/city-housing-income/Dashboard1?:embed=y&:loadOrderID=0&:display_count=yes)

Fig04: Forques Puigcerver, Nuria, Population Growth in NYC, 2016.

Fig05: Forques Puigcerver, Nuria, Total Housing Units in NYC, 2016.

Fig06: StreetEasy, New York City’s Growing Rent Burden, 2016.  (http://streeteasy.com/blog/new-york-city-rent-affordability-2016/)

Fig07: Forques Puigcerver, Nuria, New York City’s Densities Concentration, 2016. Based on NYC Planning Map: PL-P2 NTA: Population Density by Neighborhood Tabulation Area, New York City, 2010.

Fig08: NYU Stern Urbanization Project, The Rise and Fall of Manhattan’s Densities, 1800-2010, 2015 (https://www.youtube.com/watch?v=AGXJTwkc0CA)

Nuria Forques graduated from the Architecture School of Valencia. Architecture embraces her love for details and precision, from a little spoon to an entire city, keeping her focused on the whole.

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