Anyone who has had to search for a place to live in New York City recently is familiar with the features of our housing shortage.
As more and more families and professionals are attracted to our thriving metropolis, there are simply not enough residential apartments to meet the demand.
The result drives up prices across the city and places even greater pressure on New Yorkers with low and moderate incomes.
Last week, NYU’s Furman Center confirmed these trends in its latest State of New York City’s Housing and Neighborhoods report.
The report found that though the city’s housing stock grew by nearly eight percent between 2000 and the end of 2016, the adult population has increased by almost 11 percent. In 2016, adult-only households made up more than 70 percent of all the households in the city and the number of jobs in NYC was up more than 16 percent.
The analysis highlights an increase in the demand for affordable housing; however, the supply isn’t meeting those demands.
The solution is to build more housing – and one simple way to do that would be to raise the floor area ratio (FAR) cap. There is a proposed bill to do so currently in the State Senate known as S6760 that would do just that.
Originally implemented in Albany in 1961, the cap mandates that a residential building cannot have 12 times more square footage than the lot on which it is built, effectively limiting the height of buildings.
This senseless regulation greatly reduces the ability of the city to create more housing – at a time when rents are rising twice as high as wages, no less.
The reality is that the cap accomplishes little other than limiting housing supply. It does not apply to commercial buildings — nor to buildings that are being converted from commercial into residential. The city is effectively hamstrung only in residential situations at a time when more housing is desperately needed.
Lifting the cap would not weaken the public land-use process through which new projects are scrutinized, nor would it nullify the studies of the potential impact of a new development in a certain neighborhood.
All it would mean is that New York City has more control over development in New York City.
This is a time in New York City when forward thinking solutions are needed because the underlying problems will simply not go away.
The population is growing — citywide population is expected to reach 9 million by 2030 — and more land will not just simply appear. The vacancy rate is at 3.8 percent. As the population grows, that vacancy rate will only decrease, increasing rents with it.
In a recent report entitled “Creating more affordable housing in New York City’s high-rise area: The case for lifting the FAR cap,” the Regional Plan Association (RPA) makes a clear and convincing argument to unlock the potential to create more affordable housing by triggering Mandatory Inclusionary Housing.
Furthermore, NYC Department of Buildings data demonstrates that specific projects across the five boroughs could have offered more affordable apartments to the residents who need them were it not for the cap. There is simply no good reason to limit the production of affordable housing units.
We cannot wish the housing shortage away. It will require active planning and common-sense solutions from communities, the real estate industry, stakeholders like the RPA, and elected officials in City Hall and in Albany.
A good first step would be to raise the FAR cap to help create the city New Yorkers deserve – not just today but in the decades to come.
In Other REBNY News
Our Finance Committee will host its 7th Annual Cocktail Party on Wednesday, June 6 from 5:30 to 8:30 p.m. at 230 Fifth Avenue, Rooftop Lounge. Tickets are $70 for members and $90 for non-members. Email CommercialBrokerage@rebny.com for more information and sponsorship opportunities.
Join us for networking, cocktails, hors d’oeuvres, and a review of New York City’s most notable retail deals of 2017 at our 20th Annual Retail Deal of the Year Cocktail Party to be held on Tuesday, June 12 from 5:30 to 7:30 p.m. at Club 101 (101 Park Avenue). Sponsors of the event include: Empire State Realty Trust, Manhattan Skyline Management, Eastern Consolidated, Jack Resnick & Sons, Newmark Knight Frank, Ripco Real Estate Corp., Rose Associates, HJ Kalikow & Co., SL Green Realty Corp., Cushman & Wakefield, and JLL. Register online now.
The JDRF Real Estate Games return to New York City on Thursday, June 14 to raise money for JDRF, the leading global organization funding Type One diabetes (T1D) research, through an afternoon competition among top real estate companies at Chelsea Piers. For additional information about the event and ways to support JDRF, please contact Nathan Tuchman, JDRF’s Development Manager at (212) 478-4315 or firstname.lastname@example.org.
Enjoy a summer day of golf and tennis while networking with NYC real estate professionals at our Annual Golf and Tennis Outing on Monday, July 30th at the North Shore Country Club. Take advantage of this opportunity to advertise your company, sponsor the event, and provide promotional items or raffle donations. Register online and email OwnersandManagers@rebny.com for sponsorship opportunities.
REBNY Residential Brokerage Division Members: Review your sales and rental transactions for the Residential Brokerage Division’s Deal of the Year Contest, and nominate your outstanding colleagues for their professional achievements. Award submissions are due on Friday, September 14 by 5:00 p.m. All awards will be presented at the 30th Annual Residential Brokerage Deal of the Year Charity and Awards Gala on Tuesday, October 30 at the Plaza Hotel. Buy your tickets now. Email ResidentialBrokerage@rebny.com to purchase a table of 10 at a discounted rate and/or to learn about gala sponsorship opportunities. Event proceeds support the REBNY Member in Need Fund, which provides grants to residential agents who have experienced unexpected illness or financial hardship