To stimulate the creation of 300,000 more housing units in the next 10 years, New York City must raise the allowed building density in strategic areas, streamline building approval processes, reform construction-site liability rules, provide incentives to convert office buildings to residential uses and replace the expired 421-a tax relief program for multifamily housing construction, an Aug. 16 RAND Corporation report says.
“Recent housing policy in New York City primarily has focused on price controls and direct public financing of affordable housing production,” said Jason Ward, lead author of the study and an economist at RAND, a nonprofit research organization, in a press release. “But without significant increases in housing production, these approaches are unlikely to lead to broad increases in affordability in the city."
New York City faces what RAND calls "a near-perfect storm of housing unaffordability," with record-high rents, distress in the old rent-stabilized housing stock, the expiration of the critical tax relief program, the rapid growth of homelessness and a collapsing office real estate sector potentially placing a higher future property tax–funding burden on the housing sector, the news release said.
"While increased housing production alone may not be sufficient to reach affordability goals, it is clear that the failure to achieve a significant, sustained increase in housing production will limit any path toward meaningful housing affordability in New York," Ward said.
The new policies could lead to an impressive 160% surge over current production levels, making housing more affordable by intensifying competition among landlords, the press release said. Such an increase would be a significant step toward alleviating the housing crisis in New York, where a majority of renters spend more than 30% of their earnings on housing.
Increasing building density near subway and rail stops alone could create 122,000 additional units over a decade, the report says.
Some of the RAND recommendations are similar to current proposals, including Gov. Kathy Hochul's proposed 485-w program to replace the expired 421-a program as well as recommendations the city's Buildings and Land Use Approval Streamlining Taskforce has made to simplify environmental review, land use approval and permitting.
The RAND researchers identified what they saw as the most promising strategies from among many proposals by government and non-governmental organizations, local affordable housing developers, city and state government officials, academic researchers, practitioners in land use and property tax law, and regional and state planning organizations. They also took some ideas "verbatim from preexisting proposals such as the city's recently released Building and Land Use Task Force (BLAST) report," the press release said.
