Comptroller: Housing crisis can’t be pinned on gentrification
New York City has a lot less affordable housing than it used to. And it's not really gentrification's fault.
Those two rarely paired assertions are contained in a report released this morning by New York City Comptroller Scott Stringer.
The uncommonly in-depth analysis of New York City's decades-old affordable-housing crisis found that while gentrification—defined as “a growth in the number of middle- or high-income households in a neighborhood or the city as a whole"—increased somewhat, it did not increase enough to account for the loss of some 400,000 units of affordable housing renting for less than $1,000 a month between 2000 and 2012.
“New York City as a whole has been ‘gentrifying,’ but at a rate much slower than commonly perceived,” it reads.
Also: “gentrification of the city’s household distribution was an unlikely cause of rent inflation citywide during the Bloomberg era.”
According to Stringer’s analysis of the census data, from 2000 to 2012, the number of “high-income” households earning more than $160,000 a year (in 2012 dollars) increased by just 12,000, “a small change in representation in a city with over 3 million households.”
Put another way, “that income group grew from 9.65 percent of the city’s households to 9.82 percent over the period.”
The number of households earning at least $100,000 a year also grew by 43,000, but even that number “is far less than the net increase in the city’s housing supply over the period,” and more than half of those households were homeowners, not renters, anyway.
Nevertheless, New York City’s housing became much more unaffordable. And that unaffordability is acutely felt in those Brooklyn and Manhattan neighborhoods that absorbed the bulk of those high earners.
“It may not be coincidental that Brooklyn experienced the largest increase in average rents while Queens and Staten Island the lowest," reads the report.
Stringer's report offers several other theories for why New York City has become so expensive, among them a loophole-ridden rent regulation system and the city's population historically high population growth.
It's not an easy question to answer. Nor is it a new one.
"We are approaching a crisis in the housing situation," said Walter Stabler, comptroller of the Metropolitan Life Insurance Company...in 1920. "Unless radical action is taken, something drastic will happen.”
That year, the state passed a rent control bill and the city began subsidizing housing.
"[N]ew housing construction in the 1920s exceeded 700,000 dwelling units, by far the biggest housing boom the city ever experienced," reads the report.
Nevertheless, by the middle of the next decade, "landlords and public officials were once again referring to a crisis in the city’s housing conditions. In fact, although the most urgent concerns have shifted over time, there has rarely been a period in the past century when New York City’s housing market seemed to be serving adequately the needs of the city’s residents."
That holds true today. With reason.
Citywide, median rents have risen 75 percent since 2000, compared to 44 percent nationwide, and between 1994 and 2012, the city lost 105,242 units of rent regulated housing.
Within the city, rents grew fastest in Brooklyn, where the average monthly rent increased by 77 percent between 2000 and 2012. Although the highest average rents are found in Manhattan and the lowest in the Bronx, they increased by a nearly identical 65 percent between 2000 and 2012. Average rents in Queens and Staten Island grew somewhat more slowly, increasing by 63 percent and 55 percent, respectively.
At the same time, thanks to the high cost of living in New York City, the median real income of New Yorkers declined 4.8 percent, even as "income growth, measured by either the median or the mean, was significantly stronger in New York City and its metropolitan area than in the rest of the nation."
And all of these developments took place despite a $23.6 billion, widely hailed Bloomberg administration investment in affordable housing.
On May 1, Mayor Bill de Blasio will release his long anticipated plan to build and preserve 200,000 units of affordable housing in the next 10 years, more than his predecessor built in 12.
"The report takes a snapshot of New York City housing as it exists at the end of a $23 billion investment in affordable housing and before a new multibillion effort is about to begin wtih a new administration," said Stringer in an interview. "It is time to take stock and drill down as to what’s really gong on."
If nothing else, Stringer's report provides ballast for the argument that de Blasio should focus his affordable housing efforts on lower-income renters, many of them working poor and the elderly. Renters that earn between $20,000 and $40,000 now, on average, spend 41 percent of their income on rent.
"This group’s housing circumstances have become more precarious even though their labor force participation rates have soared," reads the report.
Stringer also recommends investing in the largest supply of low-income housing in New York City: the New York City Housing Authority.
According to the report, “the cost of rehabilitating a single NYCHA unit is estimated at less than one-third the cost of constructing a new unit."