NYC’s housing supply can’t keep up with its job growth: report
Welcome to New York City, where you may have a job, but not a home.
New York City’s housing market hasn’t kept up with its stellar job growth. That discrepancy is exacerbating displacement and homelessness — most significantly in Brooklyn and Queens — according to newly released data from the Department of City Planning.
The 2019 Geography of Jobs report, published last week, shows that as the number of jobs in the city has increased, there is not enough new housing to keep up with demand. According to the report, New York City had the largest housing production to job growth deficit for the region, which includes the lower Hudson Valley, North New Jersey, Southern Connecticut, Long Island and the New York City metro area.
In layman’s terms: There aren’t enough places for people to live — let alone afford — across the five boroughs.
From 2001 to 2008, the city created 2.2 units of housing per job. But by 2018, that dwindled to a mere 0.5 units created per job, according to the data. Job growth has been most significant in Brooklyn and Queens.
“Falling housing production poses a threat to our cities, and to our region’s continued prosperity,” said Vicki Been, deputy mayor for Housing and Economic Development. “The tri-state area has seen a 30 percent drop in the pace of new housing construction in the current market cycle compared to the prior cycle, even as job growth has surged. This imbalance is driving up rents, damaging our quality of life and exacerbating inequality.”
The good news
New York City has bounced back from the 2008 economic recession in a major way, gaining 924,000 private sector jobs since that time — the most jobs in a U.S. metropolitan area. These private sector jobs included roles in office, institutional, industrial and local services employment.
For Brooklyn, private sector growth included adding more than 198,000 jobs from 2009 to 2018, with the largest growth coming in office jobs — which includes financial activities, information, and professional and technical service jobs.
This employment sector also represented the highest valued employment as workers in office jobs earn an average of $131,600 per worker, according to the report.
Meanwhile, Queens has seen an increase of 47,300 “institutional” jobs since 2008, such as jobs in health care or education. Thomas Grech, president of the Queens Chamber of Commerce, attributed part of this growth to the marked increase of the senior population in the borough. Queens has the second highest senior population in the city, after Brooklyn, according to a 2017 City Comptroller study.
“People are aging in place,” he said, necessitating an increase in the amount of professionals to care for them. “All the big boy hospitals … are all coming and staking their claim in Queens,” he said, noting that most large hospital systems, such as Northwell Health and NewYork-Presbyterian, now have borough outposts.
Queens also grew its number of industrial jobs by 12,200 — the most of any area in the region.
“The infrastructure reinvestment kind of rules the day,” Grech said. The major redesign of LaGuardia Airport and its transit structure, as well as construction at JFK Airport and in the transportation sector have increased infrastructure spending, he continued.
The Brooklyn Chamber of Commerce declined to comment for this story.
The bad news
More jobs has not translated into more housing, affordable or otherwise.
Before the 2008 recession, the New York City area saw 2.2 housing units developed per job added to region. Now that this ratio has sunk to .5 units per new job post-recession, the DCP report explained, affordability challenges will increase.
In the years since the 2008 recession, New York City has only built a total of 407,000 units of housing compared to an influx of 770,000 jobs, according to the report. “This pattern would be expected to heighten affordability challenges and create headwinds to further business growth,” the report says.
Housing advocates like CEO and executive director for the Center for NYC Neighborhoods, Christie Peale, claim that one of the best deterrents for displacement and affordability is property ownership.
“It also demonstrates the need for affordable homeownership, which can prevent people from being priced out of their neighborhoods and provide New Yorkers the opportunity to build wealth and close the racial wealth gap,” Peale told the Eagle. “It should be a key element of growing New York City’s housing supply.”
This is highlighted by the current affordability crisis and homlessness crisis facing city residents. About 58,500 people sleep each night in the city’s shelter system, according to the Department of Homeless Services. More than 114,000 students in New York City’s schools are in the shelter system or doubling up with relatives and friends, according to city data.
Stable housing is considered to be housing that consumes no more than a third of an individual’s income. Taking up more than that is considered burdened, and increases the risk of homelessness or displacement.
In 2017, New York ranked third highest among states in the nation for both the percentage of renters, 26.6 percent, deemed to be be severely burdened by housing costs that consumed half or more of their income, according to U.S. Census data.
In Brooklyn, more than half of all households are rent burdened and a full third are severely rent burdened — meaning that they devote 50 percent or more of their income on rent, according to a 2018 report from New York State Comptroller Thomas DiNapoli’s office.
The same report revealed that in Queens, 39 percent of residents gave more than 30 percent of their income to rent. The average cost of rent in Queens is $2,570, according to RENTCafe.
“But if the typical worker in local services receives $37,200 a year in wages, she can only afford $930 a month in rent at 30 percent of income. Even with two incomes like that in a household, they can only afford $1,860. New market rate housing rents for well over that mark,” said Tom Waters, a housing policy analyst at The Community Service Society of New York, a nonprofit that advocates for low-income New Yorkers.
“I believe that increasing production of housing is not enough to make the city affordable to people working in the lower-paying industries. We need intentional development of affordable housing, with subsidies and rent restrictions,” Waters said.
Back in June, New York State passed a package of rent reforms to increase tenant protections and close loopholes that landlords often use to raise rents and push out longtime residents.
“I think that there’s no question. The report gets it right — we’re not building affordable housing for New Yorkers,” executive director of the Center for an Urban Future Jonathan Bowles told the Eagle.
But, Bowles said, housing affordability is a complicated problem, and more than just the number of housing units goes into it. For instance, he’s seen a boom in low-wage jobs — such as in the restaurant industry — that can make it difficult for low-income people with those jobs to break into higher income brackets.
Additionally, Bowles said, there should be a push for housing to be built at all income levels, noting that the luxury housing being built in some communities is not attainable for everyone.
There is a glut of luxury housing in New York City, according to a data analysis by StreetEasy, with more than 25 percent of the 16,242 new condos that were built in New York City since 2013 remaining unsold in 2019. These condos, with a median price of $1.1 million citywide, are largely unattainable to the average New Yorker.
The housing problem, then, goes hand-in-hand with the low wage job issue.
“Housing is so important in this city, but if you don’t have a job, you’re going to struggle in this city,” Bowles said. He added that though housing is key, if residents have jobs that pay only $30,000 a year, it would be difficult to survive regardless.
Boosting residents into better housing won’t be solved by just increasing the volume of the area’s jobs. Part of it is giving residents more opportunities to move up.
Bowles said the city needs more pathways for low-income New Yorkers to enter fields with better paying salaries, such as tech, or creative industries like marketing or design. Funding for programs like apprenticeships and tech training needs to be emphasized, Bowles said, and the programs that exist need to expand their scope. Bowles also wants to see more investment in CUNY, noting that the university system can be a springboard for low-income students looking to enter the middle class.
On the other hand, Waters, from CSSNY, believes one of the solutions to the displacement being felt by New Yorkers is reimagining the way new units are being built.
“I believe that New York City should move toward a city-wide planning system that allows more construction of new housing, without concentrating it in low-income areas where it can lead to displacement,” Waters said.
In October 2017, Mayor Bill de Blasio announced his goal to create or preserve 300,000 units of affordable housing by 2026.
“This is how we will keep New York, New York,” de Blasio wrote in his introduction to his New York City housing report. “This is how we will ensure that the greatest city in the world will remain what it is and what it was always meant to be—a place for everyone.”
But an analysis of this commitment conducted by Brownstoner in November 2018 showed that affordable housing options have monthly rents that are close to the current rents of market-rate units, and often in the same building.
The analysis stated that at the root of the affordability crisis are privately owned buildings built under the state’s 421a tax exemption program — a state program that allows a percentage of the required affordable units in a building to rent at 130 percent of the area median income — which in 2018 was $93,000 for a three-person family.
Waters, of CSSNY, said that greater public subsidies for housing could be a useful tool in closing the gap between income and housing costs, especially as the city’s housing market continues to outprice low-income New Yorkers.
“When you look at the job growth concentrated in categories where the typical wages are far too low to pay for newly constructed housing, I think you have to conclude that we need much more new subsidized affordable housing in the city and in the suburbs, and we need it targeted to lower income levels,” said Waters.
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