Restricting Housing Near Transit Won’t Make NYC More Affordable

Weeks into his first term on the City Council, Antonio Reynoso is beginning to negotiate the tricky politics of housing and development in the neighborhoods he represents. So far, it’s tough to decipher whether his office will support the construction of walkable, transit-accessible housing that New York needs in order to keep the cost of living from spiraling out of control.

Photo: Dennis A. Clark/NY Post
Council Member Antonio Reynoso. Photo: Dennis A. Clark/NY Post

Kevin Worthington, Reynoso’s Bushwick community liaison, recently told Community Board 4 that Reynoso is “looking at some downzoning” along Broadway, the transit spine of the neighborhood with direct subway service to Manhattan and Queens, according to the Times Newsweekly. But restricting the supply of housing would only make the neighborhood’s affordability problems worse, as people continue to move there. A downzoning would also preclude opportunities for “inclusionary housing,” which relies on letting developers build more apartments to create new residences affordable for lower-income households.

Reynoso seemed to take a more nuanced position, calling for new development rules in the neighborhood, but he took a hard line against any construction until those rules are in place. “We could protect ourselves and prevent the gentrification — the displacement of the members of Bushwick — if we do a rezoning,” he said. “Any new development that happens during my tenure is going to have a very hard time… I will make sure that no development happens until the rezoning is complete.”

A rezoning could include measures like the elimination of parking minimums and mandatory inclusionary zoning — a policy tool favored by Mayor de Blasio — but it could also take years to get through the planning department and the City Council. In the meantime, Reynoso seems to be saying he’ll make it tougher for new housing development near transit to move forward.

In a statement sent to Streetsblog on Friday, Reynoso implied that he is open to the construction of more housing (emphasis his):

The process of rezoning will be community based and is looking to empower Bushwick residents with in-depth knowledge and provide resources on zoning tools and designations. My office will organize workshops and forums in the following months with experts from city agencies and local organizations to bring crucial information to our constituents on how to preserve and foster a vibrant community without harming fair and necessary development.

Over the long run, building more apartments will help keep housing prices in check, but new development can be a potent symbol of out of control housing costs. That frustration is reflected in Reynoso’s campaign website: “Gleaming new housing towers are edging out affordable apartments, and rents continue to skyrocket.”

Earlier comments from Reynoso recognized that new development can be a tool to build more affordable housing in his district. “We need to start working on incentivizing and encouraging developers or anyone that’s building in Williamsburg to build middle income housing,” he told City & State in December. “That’s going to be the way that we can thwart gentrification and sustain our community long-term.”

That’s closer to the message coming from de Blasio, who pledged to create 90,000 units of affordable housing and make inclusionary zoning mandatory. In his campaign platform: a pledge to target rezonings and new housing construction in “locations with strong transit connections, encouraging higher-density development at and around transit hubs.”

  • Kevin Love

    Basic economic laws of supply and demand dictate that the only real way to reduce housing prices is to build lots and lots of new housing.

    Fortunately, we have a powerful tool to help achieve this goal called “free market capitalism.” Good examples of free market capitalism exist in Canada and Europe that show how this tool of free market capitalism can also be used in the USA.

    Since the demand exists, it should be possible to flood the market with lots of additional housing in the form of high-density transit-oriented development. That will bring rents down.

    The alternative to increasing supply is to reduce demand by getting rid of a lot of people. Somehow, I think that the first option is better.

  • Bolwerk

    Neat supply-demand models used for consumer products and commodities are not really designed for real estate, however. In New York’s case, we may have something akin to a Giffen good.

    To the title of this, “Restricting Housing Near Transit Won’t Make NYC More Affordable,” the question is, Affordable for whom? It basically eliminates the desirability of a neighborhood, for all intents and purposes, probably keeping the existing neighborhood and its housing stock marginal. This doesn’t solve any affordability problem, but it doesn’t necessarily create new ones either.

    Either way, plenty of existing residents probably correctly calculate they lose when a gentrification wave hits them. That doesn’t mean the wave is a a wholly bad thing, but I wish people would be more sensitive to it and start thinking about ways to alleviate the pain it causes existing residents. The best solution I can come up with is higher paying jobs for existing residents, but given their socioeconomic traits (class, language, education, immigration status, credentials, etc.) the question is, how?

  • TemperedEnthusiasm

    Kevin, it’s not quite that simple. The cost of building housing in NYC (and in a lot of the country) is more than many of the potential occupants can pay, ignoring the need for a profit margin for the developers and banks for their trouble and risk. Part of this is vast inequality. Another part are regulations (good and bad) that mandate both basic safety and quality standards and nasty things like parking spaces. Throw in land speculation, financing requirements etc and you get what you have in NYC, near zero non-subsidized units being built for anyone but the wealthiest quarter or so. That wouldn’t change if density limits were removed on their own. The plan to build your your out of it only works if skyscrapers are cheap or infrastructure-subsidized land is plentiful. I’m sympathetic to the demand to build, but also there are plenty of good reasons to try to build with some amount of community control.

  • Matthew

    I think instead of opposing new housing development he should oppose the construction of any new parking for any developments along Broadway. Parking free developments tend to attract people who don’t have cars, and who are reliant on transit, while discouraging people who have cars from renting them. This will reduce the demand for the apartments since car owners wont want them, thus keeping the prices lower, while the lower construction costs, and the fact that you can build more units with the same bulk without parking means the developers can make more money.

  • Reader

    Where housing stock is limited, you see buyers coming in and renovating old homes or developers buying buildings, renovating them, and renting them out, gradually driving up prices for everyone else. There has yet to be a neighborhood with convenient access to subways and transit that hasn’t gentrified or isn’t in the process of gentrifying, with or without additional development. I don’t agree that by limiting construction a neighborhood’s desirability is eliminated. Larger forces are at play.

  • Kevin Love

    “How” is indeed the right question. There really needs to be a two-pronged approach to this. The first is harnessing the power of a free market to build lots and lots of more housing. The second is harnessing the power of the government to eliminate poverty through proper wealth redistribution.

    Free markets do an excellent job of building things and creating wealth, but a poor job of distributing it. That is where government comes in. Although nowhere is perfect, there are plenty of cities in Japan, Canada and Europe that do a pretty good job of providing housing for their people.

  • valar84

    There are many causes for the housing problems, but here is what is not going to help: blocking housing development and increasing the costs and risks of promoters.

    Housing prices are effectively the result of supply and demand, and if supply is low, then prices rise. But there is another aspect to this dynamic, a promoter will not build housing if the expected price he can sell them at is equal to or below the cost to him of building the housing. So the more red tape you throw at them, the more risks you put in his way, the more NIMBY panels you have them present their project to, the more you increase the cost of building housing, which means that even if they want to, they will be unable to offer affordable housing. When you increase the cost of building so much, you force them to build only expensive housing for the rich.

    Decisive action is needed, I have nothing against imposing certain conditions for promoters, like imposing a certain amount of affordable units in their projects as a condition for giving the green light to their more expensive units. But red tape must be cut, make few rules to follow, but important rules. And don’t give the power of life or death of any project to NIMBYs.

    Ideally, what would be best would be a public housing corporation. Essentially all Asian countries that have to deal with expensive land have public housing corporations building affordable housing, even countries that tend not to have very left-wing and interventionist governments like Japan. But barring that, you need to make building new housing in cities less expensive and less time-consuming, otherwise you’re just cutting your own throat.

  • J_12

    Market rate housing developers will build lots of luxury housing, and lots of transitional housing (sharable apartments for young kids who will live in tiny spaces.) They will build some of what you might think of as middle class housing, although less and less, and almost no low income housing.
    If the government completely stepped out of the picture and stopped enforcing building codes, then you would get plenty of low income housing as well, but it would be in violation of current codes. I don’t think this is going to happen anytime soon in NYC.
    So either the government has to mess around with the housing market and distort it away from what free market developers want to build, or we have to accept that lower income, and even many middle income, people will increasingly be pushed into areas with inferior access to transit and other desirable characteristics.
    Downzoning hurts everyone, but it hurts developers more. If you see gentrification as a zero sum game, it’s not totally crazy to try something like this.
    The fact is that large scale new development has tended to push prices up in the entire area. All the massive development along the waterfront has focused on luxury apartments, and has resulted in rising property values and rents in those areas as they are marketed to more affluent people and other properties appreciated by association. The city, under the Bloomberg administration, has made only token demands to include affordable units.

  • oxyrrhynchus_megacephalon

    Are you saying that strict restrictions on new development DIDN’T keep the West Village, Park Slope, and Brooklyn Heights from being gentrified?

  • woolie

    I suppose in the end, time rules everything.

  • Joe R.

    NYC at present is stuck with several factors that tend to drive housing prices up. Construction costs here tend to be higher than elsewhere due to parking minimums, heavily unionized construction labor, building codes, and the need to work around existing infrastructure. There are also real estate speculators who tend to drive up prices by buying and renting things like single family homes. Finally, you have nearly infinite demand for housing in NYC so you would need to build a huge new supply to significantly affect prices. Probably something like 50 or 100 million people would want to live in NYC if housing existed which they could afford.

    Some of these problems are amenable to immediate solutions while others require a long-term approach. Obviously, parking minimums can be eliminated immediately. You could mitigate any fears of existing residents that new buildings might result in less on-street parking by prohibiting car ownership for any residents moving into buildings with no parking. You can also legislatively deal with some types of real estate by prohibiting ownership of single family homes by either corporations or persons other than the residents. Unlike other types of real estate, such as apartments, single family homes are mainly places to live, not investments. They shouldn’t be allowed to be treated as investments. I feel just getting real estate speculators out of single family homes would drive down prices of all real estate somewhat. More people in apartments could afford to buy homes. This would free up some apartments, reduce demand, and lower rents.

    Other problems have longer solutions. High construction costs are unfortunately inherent in high-rise construction. Long term I see robotic labor and prefabrication dramatically reducing construction costs but these things won’t come online for at least a generation. In the meantime there’s one way to increase housing stock which I think has huge potential-encourage telecommuting. If every job which was amenable to telecommuting was done at home, two things would be accomplished. One, some people would leave the city. These would be mainly people who don’t like NYC but stay here because their job is here. If they can keep their job and live elsewhere they would. That frees up housing. You also free up real estate when enough people telecommute by dramatically reducing demand for office space. Eventually, you can rezone some commercial areas and convert the office space to apartments. This is far less costly than new construction. You might even have companies converting part of their office space to residences for those workers who can’t telecommute. They could provide free or low-cost company housing as a perk. Since it would be in the same building, the worker essentially has no commute-just an elevator ride.

    Subsidizing housing is an obvious solution also. Due to long-term trends, I feel this will become increasingly important. Artificial intelligence will soon obsolete many human workers. This will most likely mean a world where people at best have part-time employment. In a free market economy where housing costs are uncontrolled, you may well have a majority unable to afford the basics on what they earn. The end result of this will dictate some type of income support, perhaps a mandated minimum income for all adults which can be supplemented by working. There may be housing subsidies as well. The bottom line is eventually much of the world will be run by non-human labor. The only question is should those who own the means of production be the only ones to reap the rewards? Practicality dictates that the answer to this is no. Some of the production from robotic labor, perhaps most of it, will have to be earmarked for the majority-what we currently call the poor and middle class. We’ll also need to dramatically improve the education system because the jobs which exist will be mainly those which can’t be done by machine-namely jobs requiring creativity. However, it’s doubtful there will be enough such jobs for the present model of earnings from employment being the primary determinant of consumption. You will likely need to allocate everyone a housing allowance and a food allowance. Earnings from employment, if any, would be mainly used to buy non-necessities.

  • Joe R.

    Higher paying jobs were a solution which worked well from after WWII through about the 1970s. Long term trends make it increasingly unlikely that earnings will increase. In fact, I think the opposite is true. We’re poised on the cusp of a major societal change which I think nearly nobody sees coming-namely the wholesale replacement of human workers in jobs once thought to be impossible to do by machine. Look at Google’s self-driving car, for example. This will obsolete driving as a profession. Other types of intelligent programs will dramatically reduce the need even for professionals like doctors and engineers. Anything which involves rout labor will of course be done by machine within a generation. We’re already seeing some of this now. Many of the jobs lost after the 2008 crash didn’t come back because machines were able to do them.

    The bottom line is we’re going to need major government intervention in the free market sooner than we think. In fact, I honestly feel free markets themselves may well be obsolete within a generation. Free markets only work when skills and labor have value which can be traded for goods and services. Most human labor won’t have much value in 20 or 30 years. The only question then is how to divide the production of the robotic labor. Obviously those who own the means of production don’t need all of it. I discussed some possible solutions in my post above.

    A couple of articles discussing all this:

    http://jaymans.wordpress.com/2012/08/19/human-labor-becoming-obsolete/

    http://www.naturalnews.com/042276_robotics_revolution_worker_displacement_depopulation.html#

    http://beforeitsnews.com/alternative/2013/09/ultimate-outsourcing-robots-may-make-more-than-half-human-manual-labor-obsolete-four-billion-jobless-homess-2779376.html

    http://oshoku.com/225/rise-of-the-machines-are-humans-becoming-obsolete

    Yes, this is scary stuff. The good news is robots will never be able to do jobs requiring creativity. The bad news is much of the population is incapable of such creativity, even with training. We may well need to take long term measures which increase the average intelligence of the population over time to keep humans “viable”.

  • Baltimore Foreclosure Properti

    I appreciate you for sharing your knowledge. Thanks!!!

  • andrelot

    Restricting development just puts a place on an even faster track to gentrification, which also means more politically powerful constituencies will then take place and make it impossible to upzone (SoHo is a good example of that).

  • Jonathan R

    Cost of building new lodging is the same all over the city,
    but some lots are more valuable than others. Considering the long lag time
    between breaking ground and receiving rents, it makes sense for investors to
    forego developing marginal lots to wait for more valuable lots to become
    available as building on them locks in a higher rate of return. I fail to see how
    this “free-market” process leads to the creation of the greatest number of housing
    units.

  • mrtuffguy

    If Reynoso wants to ease gentrification in Bushwick he should be demanding an upzoning for Williamsburg.

  • Bolwerk

    Housing stock always has a practical limit, and we’re talking about marginal neighborhoods here. With a marginal neighborhood, the “larger forces” are conversion followed or accompanied by mixed use construction. There may be cases, like Greenwich Village’s townhouses, where the current state is the cause of the desirability, but that’s not the case in marginal neighborhoods. The whole point is people want to change them to make them desirable.

    (I have nothing against that, BTW, but as I said, the implications need to be considered.)

  • Bolwerk

    Meh. SoHo is an exception, not a rule.

  • Member of Bushwick

    How do I become a “member of Bushwick?” This sounds like a pretty exclusive club, can anyone join? Does Reynoso’s office have applications?

  • Bolwerk

    That dynamic doesn’t make much sense. As long as they’re profitable, it doesn’t make sense to forgo investing in marginal properties. Even if investing in a marginal property foregos a chance to invest in another property, buying a marginal property, receiving the income for a few years, and then realizing a capital gain on it is probably still preferable to just sitting on your cash. At least given present interest rates.

  • Bolwerk

    Everything within x blocks of a subway should be upzoned. That would probably relieve pressure on Bushwick, or at least provide alternative “cheap” housing if it can’t be salvaged in Bushwick.

  • Jonathan R

    You are correct when discussing investments in existing housing units, but that does not increase the number of units overall. My issue relates to the creation of new housing units, and why “free-market” solutions may not be the best way to create the maximum number of housing units.

  • Bolwerk

    It’s the same trade-off: it doesn’t make sense to forego investing in an improvement of a marginal property while waiting for a prime property to come on the market (at present interest rates, ceteris paribus, yadayadayayada, etc.). It only makes sense to forego if you are choosing between two mutually exclusive investments.

    I agree with you about the outcome though. In reality, marginal investors will invest in the marginal properties and are more likely to create marginal results. And I think “free market” is a cynical phrase anyway.

  • Alan

    I think there is very little that can be done to completely restrict gentrification short of draconian property controls. My neighborhood has not that much new construction but there has been a huge increase in rents, along with the formation of group houses with younger people, and changing demographics as older residents sell and people from outside the neighborhood buy. The truth is really the only people with any control over gentrification are property owners. And if they are renting units out they have even less control since that would be discriminatory to pick and choose what type of tenant you want.

  • Alan

    It just affects where the new demand goes. If everyone got together and said no new supply, prices would still go up and more people would get pushed out across the city. It’s a zero sum game.

  • JamesR

    Guys, there is a racial, ethnic, and class-based subtext here that you all are obtusely ignoring. Bushwick is a majority-minority neighborhood in the midst of demographic transition. Folks who’ve lived there all their lives see the ongoing gentrification in Harlem and fear that that is their fate: that their neighborhood – their home, filled with people that look like them – is going to become something unrecognizable as new dwelling units are built and occupied under current zoning regs. Hence the calls for downzoning.

    However, as development pressures are titanically strong in NYC in ways that they are essentially nowhere else, this is essentially like throwing stones at a giant IMO.

  • Bolwerk

    I haven’t been ignoring it. I hope it’s mostly a class thing and at least not racial, and I don’t think downzoning is good policy, but there isn’t much denying it achieves its goal of blunting the impact of gentrification for certain groups. It may be an uncomfortable reality, but it is reality.

    Sadly, the Force [of neoliberal invisible hand agitprop] is strong here!

  • WoodyinNYC

    Yes. Upzone everything close to a subway stop.

    I’d say allow up to 40 stories within a block of a subway entrance, 30 stories within two blocks, 20 stories within 3 blocks. And NO minimum parking requirements for housing within 4 blocks of a subway entrance.

    Tens of thousands of apartments within an easy walk of transit.

    Gentrification is powerful, but the number of would-be gentrifiers is not infinite. Adding a much larger supply of housing in every neighborhood would disperse the newcomers and upwardly mobile-ers. This would at least drag out the gentrifying of the most desirable, close-in neighborhoods and make the changes less sharp and immediate.

    OK, if you think a 40-story tower at the Brooklyn College stop is a bit much (I don’t), then let it become like most real estate developers vs planners tug of wars, and we bargain from that starting point.

  • Bolwerk

    I don’t have a problem with height, but I don’t think you need to go crazy to get great results. Bushwick and most of brownstone Brooklyn tends to be 2-3 stories. Infill can be 5-8 stories and do wonders.

    And it must be remembered that not all housing will be replaced. In a century, a few percentage points of housing will be replaced.

  • Nick

    I bet a lot of those new tenants will still own cars and just park them on the street.

  • kip

    Then institute a neighborhood parking permit system – no parking 2am-6am without one. Give one away for every car registered in the neighborhood, renewable for some small administrative fee to cover costs for some sunset period, say ten years, and auction the rest. After those ten years all permits get auctioned every year. Use the money to help maintain subway stations or increase bus frequency through the area.

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