Proposal to Boost Housing in New York City Moves Forward
In a country plagued by an affordable housing crisis, New York City suffers from one of the worst shortages, with a rental vacancy rate of less than 1.5 percent. A lack of supply and skyrocketing rent prices have led to notable financial losses for the city, as outmigration and loss of productivity are estimated to cost between $1.4 billion and $1.9 billion in lost taxes annually. Affordable housing (which is defined as costing less than 30 percent of gross pre-tax income) is becoming increasingly difficult to find, and ultra-low income families are being hit especially hard.
Despite the fact that New York City has seen the creation of 1.2 million jobs in the past 10 years, it has only added 400,000 homes, an imbalance that has further exacerbated this ongoing problem. In addition, residents of New York City are less likely to move than those in other parts of the country, with the annual turnover rate of rentals being 41 percent lower than the US average. All of this combines to create a situation that is problematic in the short term and unsustainable in the long term.
100,000 new housing units proposed
In an attempt to motivate and facilitate the development of new residential properties in New York City, Mayor Eric Adams championed the “City of Yes” plan, which has the goal of building 100,000 new housing units in the city. This plan ran into pushback on a number of levels, however, and for a time it appeared unlikely to come to fruition. However, after a round of amendments by a New York City Council subcommittee, the plan was approved in late November 2024, bringing it one step closer to being signed into law.
The “City of Yes” plan didn’t emerge from City Council deliberations unscathed, as a number of items were cut or limited in the amendments. The biggest change was arguably the reduction of 100,000 proposed new homes to 80,000, although a number of other changes were also noteworthy. The plan originally sought to do away with parking requirements throughout the city that served as a deterrent for many potential developers, but this was amended to divide the parking restrictions into three zones. While parking requirements will be eased in transit-proximate areas such as Manhattan and western Brooklyn and Queens, they will remain in place in the rest of Queens, as well as Staten Island. The plan also seeks to reduce restrictions on building accessory dwelling units in garages, attics, and basements, but concessions had to be made on this point, as well.
A commitment to support affordable housing
Despite the modifications to the plan, Mayor Adams heralded its approval as a success and a major step forward in the fight against affordable housing shortages. In order to achieve this victory, Mayor Adams committed $4 billion in funding from the city, which will be used for housing capital ($1 billion), infrastructure development ($2 billion), and programs such as neighborhood planning, voucher assistance, and tenant protection ($1 billion). In addition, New York state committed to providing $1 billion for housing capital between 2025 and 2030.
“New York has a housing affordability crisis, and there’s only one way out: build more housing,” said Governor Kathy Hochul. “Now, we’re adding a $1 billion state commitment to support affordable housing in New York City.”
Plan considered likely to become law
With the support of New York City’s mayor and the state’s governor, as well as the aforementioned New York City Council subcommittee, the plan now has much-needed momentum, and is considered likely to eventually become law. If it were to do so, it would represent the largest increase in New York City’s zoning structure in over 50 years, and serve as a major first step toward meeting the ballooning housing demand in the city. Mayor Adams celebrated the subcommittee approval, stating, “Thanks to our shared commitment in building critically needed housing, we have reached an agreement on a historic plan that could open the doors to a little more housing in every neighborhood in our city— with no borough, block, or backyard left behind. If passed, New York City will once again serve as a model to the nation on the government’s infinite ability to take challenges head on, set forth a bold agenda, and get the job done.”
The proposed plan, officially known as the “City of Yes for Housing Opportunity” rezoning proposal, is tentatively scheduled to go before the entire City Council for a vote in December of 2024. Relevant stakeholders throughout the city, including the Real Estate Board of New York, affordable housing advocates, and various developers, have lauded the provisionally approved plan and are working hard to get it passed. But there is also a widespread sentiment that the “City of Yes” proposal won’t do enough to solve the housing shortage in New York City, particularly in its latest, pared-down form. On the other side of the debate, suburban opponents of the plan have continued to express their dissatisfaction with the proposed rezoning, arguing that the city is already overcrowded as it is, and that more development will lead to a reduction in the quality of life and existing property values.
