Brooklyn Boro

Building boomlet added nearly 200K apartments and intensified income segregation

NYU Furman look at 2010-2020 growth finds new affordable housing concentrated in low-income neighborhoods of color, except where soon-to-expire 421-a tax break put it in prime real estate.

June 6, 2022 Greg David, THE CITY
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Logo for THE CITYThis article was originally published on by THE CITY.

While New York City’s housing crisis requires more construction, the city did produce almost 200,000 new units in the last decade – one-third of them affordable – in a performance that likely created more housing than any city in the nation.

Crucial to that success, says the annual State of New York City’s Housing and on Neighborhoods report released today by the NYU Furman Center, were the rezonings of the Bloomberg and de Blasio administrations, targeting areas where much of the building was concentrated.

But most of the affordable units were built in poor neighborhoods populated by people of color. The 421-a property tax break for rental housing — expiring this month after state lawmakers failed to renew it — was the one program that brought diversity to whiter and wealthier areas.

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“The big takeaway here is scale,” said Matthew Murphy, director of the Furman Center. “No American city has seen that kind of development.”

But he wonders what will happen without 421-a. “Affordable units are not equally spread throughout the city. The expiration of 421-a brings into question what is the future of a tax system to encourage onsite affordable housing.”

The annual Furman report is one of the most comprehensive reports on housing in the city, detailing vital stats for all 59 community districts.

Because government agencies did not update several key statistical sets, year’s edition, the report’s information on rents, rental arrears and other measures of the health of housing present information only through early 2021.

So Furman chose to take a longer-term lookback at the health of New York City’s housing production: how many housing units were built between 2010 and 2020, where they were built, as well as how many were market rate and how many were affordable.

Furman’s data encompasses new construction with at least four units, which it believes covers 90% of all the new housing.

The center’s look at housing production comes against a grim backdrop for rent-stressed New Yorkers: The city is not building enough new housing to keep up with population growth, with much affordable housing lost to market rate conversions earlier in the decade before rent laws changed in 2019. Demand for lower-cost units outstrips supply, and market rate rents are soaring.

But the report spotlights the sheer amount of housing construction and the large percentage of new units that are affordable, and pinpoints the key reasons for those successes.

Residential developments sprouted up in Downtown Brooklyn, Nov. 16, 2021.
Ben Fractenberg/THE CITY

Slightly more than 185,000 units were built in the decade, Furman found, with construction peaking in 2018. Even if other cities build more on a per capita basis, Murphy says, the figure is an accomplishment given the many geographical and regulatory limits of building in New York.

Affordable units — defined by Furman as those restricted to people with incomes lower than 80% of the area median, or currently $96,000 or less for a family of three — comprised 32% of the total. Given scant federal support for housing construction, the share of affordable housing is impressive, Murphy said.

About one in five affordable units were built with no subsidy other than the 421-a tax break, which grants an exemption from property taxes for as long as 35 years and requires the developer to set aside a percentage of units for lower-income New Yorkers.

But the rest of the 52,000 affordable units received additional city help, such as low-interest loans, Low Income Housing Tax Credits or government vouchers.

“New York is maximizing its resources and has built an infrastructure for affordable housing,” he added. “That basically stayed constant through the decade.”

Builders agree.

“There can always be more, and demand outstrips supply, but we have to take a moment and say look at this level of production that’s unprecedented,” said Eli Weiss, principal of Joy Construction.

Furman found a third of new construction occurred in areas rezoned for greater density in the Bloomberg and de Blasio administrations, which made such changes the centerpiece of their efforts to spur construction. The rezoned areas accounted for a small percentage of the city’s land.

The rezonings are important, said Carl Weisbrod, de Blasio’s first planning commissioner who initiated many of those efforts, but so is the amount of capital the last two administrations committed to affordable housing.

“The production of affordable units, irrespective of where they are located and the level of affordability, is a major accomplishment, he said. “Both administrations have a lot to be proud of.”

Affordable units were also predominantly in larger buildings, with a median of 54 apartments in each.

Affordable housing construction was highest in the Bronx and occurred mostly in poorer neighborhoods inhabited primarily by people of color. Market-rate housing was concentrated in Manhattan — especially Chelsea, and the Brooklyn and Queens neighborhoods closest to Manhattan.

The affordable units built in whiter and wealthier neighborhoods occurred as a result of the requirements of the 421-a tax break, the Furman study shows.

“Buildings built with 421-a are the only way to integrate neighborhoods and allow less well-off people to live in areas with good schools and other amenities,” David Lombino, managing director at Two Trees, the prolific Brooklyn developer, told THE CITY recently.

Desegregating the city is extremely difficult, noted Weisbrod, as illustrated by the major fight over the rezoning of NoHo and SoHo, which is expected to improve integration in those two neighborhoods.

“Many of our wealthiest neighborhoods are already built out to the maximum 12 FAR residential and cannot be upzoned, or are in historic districts,” he said. “Providing more affordable housing in these areas is challenging.”

Murphy wonders how long the city can continue to devote the current level of resources to affordable housing and find a way to build those units in areas that are more expensive.

“We can celebrate the last decade and challenge ourselves saying we have a lot more work to do to create a more equitable and healthy housing market,” he said.

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