November 18, 2024
By John Low-Beer, J.D., PhD. City Club Law Committee Chair
The New York City Planning Department presents the City of Yes for Housing Opportunity (“COYHO”) as a modest, incremental proposal to address the “severe housing shortage that makes homes scarce and expensive … by making it possible to build a little more housing in every neighborhood.” COYHO is not modest. As George Janes, an urban planner and consultant to several community boards, has extensively documented, it is a radical proposal that will dramatically alter the cityscape and make our urban environment less livable, particularly in Manhattan, which is already the densest residential area in the United States and one of the densest in the world.
COYHO would allow massive infill on tower-in-the-park campuses, such as most public housing projects, Stuyvesant Town and Peter Cooper Village, and Park West Village. Distances between buildings could be as little as 40 feet. Janes estimates that infill could triple the number of units on NYCHA’s Washington Houses campus. (Although the COYHO infill provisions do not apply to projects requiring HUD approval, approval is not required if, as has been proposed, NYCHA grants 99-year leases instead of selling its land.)
Whereas under current zoning the base of a tower-on-a-base building is limited to roughly match the height of adjacent tenement buildings, under COYHO the base could rise straight up to be almost twice as high. Changes in the rules for transferring floor area from side streets to avenues would enable much taller luxury buildings that are now permissible only in exchange for affordable housing. Minimum standards for rear yards, courts, and space between buildings, developed since the 19th century at the urging of reformers such as Jacob Riis (How the Other Half Lives) to provide light and air, would be weakened or removed. These are only a few examples of the changes that will, over time, undermine the livability and desirability of Manhattan.
If COYHO as approved by the City Planning Commission would contribute significantly to resolving the housing crisis, one might ask whether the trade-off is worthwhile. But COYHO incentivizes the production of housing, not affordable housing. Because it gives developers so many options to increase floor area without providing affordable units, the Universal Affordability Preference that COYHO also offers is unlikely to result in many new affordable units.
COYHO’s advocates say that even though it does not mandate construction of any affordable housing, COYHO’s addition of market-rate units will reduce housing prices through filtering, a/k/a trickle-down. But trickle-down simply does not work where added supply only induces more demand. At best, as planner Juan Rivero has pointed out, it is a slow process. And there is no reason to expect that it will ever lead to units affordable to those making 60% of AMI or less. Supply-side advocate and former Deputy Mayor for Housing and Economic Development Vicki Been admits as much, conceding that “the price effects of market-rate construction may be slow to materialize and are unlikely to be sufficient to address the needs of very low-income households.” Yet this is where the real need is. It is primarily those low-income households that are rent burdened, i.e., paying more than 30% of their income in rent. Rivero points out that the median rent burden of NYC households was only 29.5% in 2023, but for households earning less than $70,000—the median NYC household income—the median rent burden was 54%.
COYHO would not only do little to create new affordable housing; it would also further incentivize the replacement of buildings with rent-regulated apartments with much taller luxury buildings, often with fewer units. Between 1993 and 2018 New York City lost 282,000 regulated apartments, and an additional 120,000 between 2019 and 2022.
In Manhattan, there is a dire shortage of affordable housing, but no shortage of housing: census figures show that since 2010, the number of units has exceeded the number of households by between 10 and 28 percent. Citywide, the Municipal Art Society found 1.8 billion square feet of unused residential development rights within the existing zoning envelope—enough, they write, to accommodate more than a million housing units.
Late in her term as Mayor Bloomberg’s Planning Commissioner, Amanda Burden told an audience: “I had believed that if we kept building … and increasing our housing supply … that prices would go down. We had every year almost 30,000 permits for housing, and we built a tremendous amount of housing, including affordable housing …. And the price of housing didn’t go down at all.”
In recent years, prices have climbed steeply even though regulations remain little changed. Construction of new units has kept pace with population growth and household formation. Indeed, between 2020 and 2023, the city’s population fell by 544,190, yet rents rose by 30% and home prices rose 16%. There is a housing affordability crisis, not only in New York but also in other cities, and not only in the United States, but throughout the developed world. In the European Union, between 2010 and 2022, house prices rose by 47% and rents by 18%.
This evidence suggests that limits on height and density are not the predominant cause of this crisis, much less the only cause; removing those limits to build supertall luxury housing in the densest county in the nation is not the solution. Ryan-Collins et al. (Rethinking the Economics of Land and Housing), and Stein (Capital City), among many others, have shown that this crisis is the result of growing inequality, and the fact that land and housing have become lucrative investment vehicles. As Laurence Fink, CEO of BlackRock, told the crowd at the Global Megatrends Conference in Singapore in 2015, “The two greatest stores of wealth internationally today are contemporary art ... and apartments in Manhattan, apartments in Vancouver, in London.” This fuels a cycle where rising demand leads to increases in prices leads to more investment and more demand. This is not some crazy left-wing idea. Two-time Nobel laureate Joseph Stiglitz writes, “Much of the growth in inequality [is] related to an increase in rents and land values. … [L]and is a store of value. The value of land today is largely dependent on its expected value tomorrow, ad infinitum. This means that land prices are largely untethered.”
“Buy land. They aren’t making it anymore,” Mark Twain reportedly said. Land is a natural monopoly, and developers and landlords have market power. Supply siders would have us believe that there is no limit to the amount of density that can be added to meet ever-increasing demand. They care little for the urban design, architectural, and environmental values that make cities attractive in the first place. Harvard economist Edward Glaeser, a leading supply-side advocate, says that people oppose tall buildings only because they obstruct their views. Pay those people off, he says, and the problem is resolved. As to historic preservation, he says that only extraordinary buildings, and maybe the city of Paris are deserving of protection. In New York City, the number of buildings subject to preservation should be limited to, say, 5,000.
This trivializes the issue. It fails to acknowledge that the urban environment is a common good that will not be protected without regulation. As noted urbanist Richard Florida put it, “radical deregulation of land use and housing runs the risk of killing off the proverbial goose that lays the golden egg.” Florida is right. In exchange for a purported one-time fix, COYHO threatens to kill the goose.
This brings us back to the question: Is it worth it? COYHO’s proposed amendments are bad urban design and bad housing policy. They are an inefficient way to alleviate the affordability crisis. Really doing so would require that government subsidize or invest more in permanently affordable housing. But at a minimum, if COYHO is to be enacted, it should be amended to limit or eliminate the most extreme changes and to require some affordable housing through mandatory inclusionary zoning, a modest measure that has been successfully implemented in California, Florida, Massachusetts, New Jersey, Westchester County and elsewhere. In this way, the public would recapture at least a portion of the windfall increase in land values resulting from the upzoning of land.