Mayor Bill de Blasio’s ambitious initiatives to create more affordable housing – Mandatory Inclusionary Housing and Zoning for Quality and Affordability – will likely face a vote in the City Council at the end of March.
But along with MIH and ZQA there has been another suggestion for how to create more affordable housing: to build more market rate units. In last months’ real estate issue, Borough President Melinda Katz said that more market rate units, as well as more affordable units, were necessary to combat the city’s affordable housing crisis. It seems like common sense to increase supply in order to take the pressure off prices. But two experts argue that New York City cannot develop itself out of this problem.
Matthew Lasner, a professor of Urban Policy and Planning at Hunter College, thought new housing supply, unless it completely flooded the markets, would have little impact on rent.
Lasner said the problem was just that demand in New York had just exceeded supply for far too long, by far too much.
“We would have to build hundreds of thousands of units of new housing before we caught up with demand,” he said. “That’s not a reality that any of us will ever witness in our lifetime.”
Paul Graziano, a land use and urban planning consultant, also said that real estate prices in New York City were not driven by the simple laws of supply and demand.
“The whole city is hyper expensive,” he said. “It’s not a supply and demand issue. It’s what the market will bear.”
Graziano said that the contextual down-zonings that he orchestrated in the many neighborhoods actually helped keep them relatively affordable for middle class residents, something that might seem counter-intuitive, since they made the potential housing supply in the neighborhood finite.
But he argued that when the possibility of development was taken off the table, the properties lost their speculative value for developers; their price ceased to be inflated by the properties potential to become a money-making apartment complex.
“You’re removing the ability for someone to make a lot of money,” Graziano said of the downzonings. “If the neighborhood were zoned multi-family, [the property value] would jump exponentially. Because each of those properties could be re-developed into multi-family housing.”