Within days, Mayor Bill de Blasio is scheduled to unveil his long-awaited plan to build 200,000 affordable-housing units during the next decade. When the proposal is revealed, an intense debate will likely erupt over whether it will work and what the costs will be.
Before that happens, a different question should be raised: Is the residential housing boom sweeping the city, as well as an intensified push to build more low-cost housing, endangering the economy by squeezing New York's industrial and commercial sectors?
There isn't a problem in the short term. True, the tech boom has soaked up all the space in midtown south—which some say has the lowest office-district vacancy rate in the country. But downtown is awash in millions of square feet of available space. The Hudson Yards miniboom will add several million square feet of modern space as well.
In the long term, however, Economics 101 will play out. Developers are bidding up the price of land because they can make a lot of money building luxury housing. If, as expected, the de Blasio plan requires those same developers to build or finance more affordable housing, it will put further pressure on both land and construction costs.
Already, the squeeze is pressuring the recently stable manufacturing sector. Industrial businesses, such as warehousing, will soon find themselves priced out of the city. Commercial space will become less and less economical.