Finally a deal has been reached to restore the controversial 421-a tax break (excuse me, it is now known as the Affordable New York Housing Program), and the expectation is that it will ignite a boom in residential construction. Well, maybe.
At first glance the numbers support the idea that developers have been in a holding pattern since the tax break expired in late 2015. As the graph shows, building permits accelerated during the recovery from the financial crisis and then soared in 2015 as builders rushed to get approvals before the tax break lapsed. Last year permits fell by 70%, and so far this year we are on pace to issue about 20,000. The city needs more housing than that.
The common theme seems to be that builders have misjudged the incomes of the millennials who have flooded to big cities for jobs in the so-called creative economy. These young people simply can't afford the rents, and the impact is spreading from New York to other thriving cities. San Francisco rents have dropped 5% in the past nine months. Vacancy rates are rising even in Denver and other booming cities. Because development of an apartment building takes several years, a big jump in supply is coming in New York and around the country—further pressuring rents.
Beyond the immediate crunch, demographers are beginning to question how long millennial commitment to city living will last.
A survey released this year showed that young people still want to move to the suburbs. I know two such people (yes, they are journalists) who each plan eventually to leave Brooklyn for a single-family house in a suburb with good schools. One is staying for now because universal prekindergarten is cheaper than preschool in Westchester, but she's still checking the Westchester houses for sale and saving her money.
7 comments:
as someone who (reluctantly) is counted by the demographers as a millennial, this seemed absurdly obvious and not much in need of saying
-somethingstructural
> These young people simply can't afford the rents, and the impact is spreading from New York to other thriving cities. San Francisco rents have dropped 5% in the past nine months. Vacancy rates are rising even in Denver and other booming cities. Because development of an apartment building takes several years, a big jump in supply is coming in New York and around the country—further pressuring rents.
Sounds like the problem is solving itself? NYC is too absurdly expensive for our generation to afford, but prices may finally be dropping.
The idea is should be to keep those prices dropping until we can afford to buy houses and raise families here, not to give away our tax dollars to the billionaire developers already ripping us off.
Ok. We all know millennials need housing. So do boomers who are mostly retired by now. 40lks that rise and fall day by day, and social security that never rises beyond 2%, simply do not cover all expenses, especially expenses that keep rising.
Estimated costs for rental housing when 421a is implemented is $2500 for studio, and $3000 and up for 1 bedroom. On a fixed income this is a receipe for homelessness. What if your fixed income totals $2,000 or less? How does a boomer in that situation afford $2,500 a month or more in rent? What happened to 25% of income for rent? ($2000 x .25 = $500.)
So then, how does a boomer on a fixed income afford $2,500?
This is NOT AFFORDABLE HOUSING for the masses. BUT it is a boondoggle for politicians and builders.
It takes a survey and years for experts to FINALLY see that the rents are WAY too high and wages are NOT keeping up with housing rates? I could have told you that years ago! What we need is to find a way to cap the population In this city.... 9 million people (no I don't believe it's 8.4 million like "census" shows) is way too many for a city that is only equipped to handle 7 million people. There is no room to build, no where to park, not enough space in certain schools, not enough dmvs, not enough public transportation, not enough room on our bridges or highways. Don't they realize that all these people is a HUGE safety hazard? If all of us had to evacuate this island for some reason, between us and long island, more than HALF of us would be dead.
Ok. We all know millennials need housing. So do boomers who are mostly retired by now. 40lks that rise and fall day by day, and social security that never rises beyond 2%, simply do not cover all expenses, especially expenses that keep rising.
They would rather house foreigners in this city than to house our own elderly. Did you know that on the lower east side, there is an affordable housing complex where my ex bf mother lives that houses 95 percent Chinese elders? It is on 5th street right by Bowery. These Chinese Also collect 900 dollars a month somehow from social security and it has it own access a ride and parking lot RIGHT next to the building. These Chinese don't even speak a word of English! I know that they social security because my ex bf mother was talking to one of the home health aides on the elevator one day and she had told my ex bf mother that. Also there is a project housing complex I remember reading about in the paper where this politician complained that the whole public housing complex was made up of Chinese people and of course she was called a racist for calling them out! So you tell me what is wrong with this picture?
Sounds like the problem is solving itself? NYC is too absurdly expensive for our generation to afford, but prices may finally be dropping.
yeah.. 10% drop is still not consider affordable to many in nyc.
1.5 million, 10% = 150k = 1.35M
1.0 million, 10% = 100k = 900K
Don't expect it to drop like 40%. If there is a 40% drop.. NYC and the WORLD will have BIGGER problems. By then, you will be scare or chicken out to go back into the market anyways.
It is on 5th street right by Bowery. These Chinese Also collect 900 dollars a month somehow from social security and it has it own access a ride and parking lot RIGHT next to the building. These Chinese don't even speak a word of English!
I know right, but yet, they still have the brains to know how to work the system while English speakers don't. Shows the brain is at work regardless if you speak the language or not.
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