Anyone concerned with the affordability of housing in New York City should be encouraged by the numbers released earlier this month by the U.S. Census Bureau. While the national housing market has been anything but strong as of late, here in New York City we have managed to avoid many of the downturns associated with the growing mortgage foreclosure crisis.
The Census Bureau’s report reveals that, for the third straight year, the City has issued building permits for over 30,000 new units of housing. In fact, 2007’s numbers represent the greatest number of new units created since 1972, while the Bloomberg administration’s six-year total represents the greatest six-year total since accurate records began being kept in 1965.
These numbers represent good news for both the subsidized and non-subsidized housing markets alike. Certainly, the number of subsidized affordable units actually being constructed represents an important part of the story.
I am proud to say that the Department of Housing Preservation and Development has helped to finance over 88,000 affordable housing units in the six years since the beginning of Mayor Bloomberg’s administration. However, by looking solely at subsidized units, one misses the bigger picture - a picture rooted in the history of the city in the 1990s and the challenges it faces in the future.
The year 1980 saw New York City’s population at a historic low. In the 1990s, however, the city saw its population boom. Over the intervening ten years, an average of roughly 70,000 people a year moved into the five boroughs. To keep pace with this rate of growth, over 23,000 units a year should have been added to the city’s housing stock. Unfortunately, during the entire decade, there was not one year in which new units permitted broke the 10,000 mark. What is worse, there were four years in which the number fell below 5,000. The result was a housing gap that NYU’s Furman Center for Real Estate & Urban Policy estimates at roughly 100,000 units. In addition, this gap serves as a major factor in the rising cost of housing in the city.
Fortunately, we are making significant progress in narrowing this gap - progress highlighted by these historic numbers. What’s more, the numbers show that this new housing is not simply concentrated in Manhattan but, increasingly, is being built throughout the city. Three quarters of these new housing permits issued under Mayor Bloomberg have been issued outside of Manhattan, compared to less than two-thirds in the previous three decades.
Queens alone saw over 7,500 new units permitted last year - the borough’s highest number ever - with its three-year total pushing well past the 22,000 mark. Each new unit completed serves to reduce pressure on the housing market, particularly in the individual neighborhood where it is located.
Of course, the Bloomberg administration remains firmly committed to making as much of this housing affordable as possible, which is why the Mayor’s New Housing Marketplace Plan includes programs such as the City’s Inclusionary Zoning program and the State’s 421-a tax incentive program. Both provide incentives to private developers who agree to set aside at least 20 percent of their development for affordable housing. As a result, these programs stimulate the construction of both market rate and affordable housing.
Moreover, it is through programs such as these, as well as through more traditional methods such as the use of government subsidies or the issuance of tax credits and low interest loans, that the Bloomberg administration has helped to create and preserve enough affordable housing for well over 200,000 New Yorkers in less than five short years. That is just the beginning, though, as we are firmly on track toward seeing that number reach 500,000 by the middle of 2013 - a figure that represents the largest municipal affordable housing plan in the nation’s history.
Shaun Donovan is the Commissioner of the NYC Department of Housing Preservation and Development