In New York, which has 3.5 million units of housing, new units completed in Manhattan from 2011 to 2015 that could be considered luxury high-rise units is just 14,911. As such, these units represent only 0.422 percent of all housing. Supertalls are an even smaller number, with only about a dozen or so of these units being found in Manhattan. Yet, despite the small number of these units, many people think that these luxury high-rise buildings are the reason why housing prices are so high. While these buildings do make for an easy scapegoat, the reality is that they are not the actual cause of the problem. Rather, zoning issues and other restrictions preventing the construction of more housing is at the root of the problem.
Housing Fails to Keep Up with Population Growth
Between 2011 and 2015, a total of 62,345 units of new housing were added to the New York City housing stock. Yet, during this same time period, the city’s population increased from 8,244,910 to 8,550,405. In other words, an additional 300,000 people were added to the population. If two people were to occupy each of the housing units that were added during this time period, that is only enough to accommodate 125,000 people. This, of course, falls way short of the actual population increase. To further add to the problem, building demolitions and conversions also took place during this time period, thereby depleting the housing stock even further.
Adding New Housing to the Market
While it may seem like the answer to this problem is to just build more housing, the answer is not so simple. Thanks to zoning restrictions, the amount of available land is restricted. Written mostly in an effort to mitigate the perceived negative effects of skyscrapers, New York City’s first zoning laws were enacted in 1916 and then rewritten in 1961. These regulations were set in place to limit bulky shapes while promoting sunlight by encouraging buildings to be set back from the street. Of course, these zoning regulations were also put in place to separate land uses, such as keeping factories away from residences.
Over the last century, the zoning laws in place in New York City have slowly transformed into a series of policies and programs that prevent new housing from being built. By keeping them in place, home values are preserved by ensuring supply remains limited in neighborhoods. As such, zooming has become more of a policy tool for homeowners to use in an attempt to preserve the value of their investments. Furthermore, zoning provides landowners with little incentive to replace small buildings with taller ones that could help to increase the city’s housing stock. Add these variables to the fact that homeowners consistently take steps to prevent urban growth in an effort to protect their investments, and it is easy to see why housing availability and costs continue to remain a problem in New York City.