Policy Issues Series: The New York City Housing Crisis
By George Sarkissian, Director of Policy & Civic Engagement
As election season heats up in New York City, we’re digging into the issues that feel important to the city and keep coming up on the campaign trail. Our PMA newsletters will include a three-part series on policy issues currently impacting the city. While the candidates offer a range of approaches, we’ll explore the case for policy reforms and identify examples of best practices from other cities, in an attempt to contextualize the policy solutions currently being offered by the candidates. We’ll explore three policy areas: child care, housing, and public safety. As Christians, we’re called to “seek the welfare of the city” (Jeremiah 29), and understanding the policies that seek to help our neighbors and communities requires our time, energy, and thoughtfulness. We invite you to dig into these policy issues with us, so that, as followers of Jesus, we can consider them as we vote in the upcoming election.
The New York City Housing Crisis: An Analysis of Affordability, Policy Levers, and Pathways Forward
In Matthew 25: 31-40, Jesus is talking to his disciples about his Kingdom and how he will judge people from all nations based on how they treated the most vulnerable among them - the hungry and thirsty, the sick and oppressed, and those who have no clothes and no places to stay. The security and comfort of a home is elusive to many New Yorkers. How we treat our unhoused neighbors is an essential component of life in Jesus’ Kingdom. Jesus told his disciples that those who inherit his Kingdom “welcomed” strangers - for historical context, this meant offering radical hospitality and shelter in your home, as an act of provision and survival.
How do we love our neighbors and welcome strangers in NYC today? How do we structure a society where the most vulnerable also have the safety and comfort of a home? What is the role of government in ensuring the provision and survival of its most vulnerable residents, so they experience the hospitality and love that Jesus commanded? There is wisdom to exercise, complexity to unpack, and policy choices to consider in answering these questions. In part 2 of our 3 part series on policy issues impacting NYC this election season, we explore housing policy. NYC is in a severe housing crisis, characterized by an imbalance between incomes and housing costs, a crushing rent burden on residents, and a historically low supply of available homes that threatens the city's economic vitality and the well-being of its inhabitants.
The Widening Affordability Gap
The core of the crisis is a fundamental disconnect between what New Yorkers earn and what it costs to secure housing. As of 2023, the median asking rent for a publicly listed apartment reached $3,500 per month, or $42,000 annually. To afford such a rent without being "rent-burdened" (spending more than 30% of income on housing), a household would need to earn at least $140,000 per year—an income level nearly double the city's median household income.1 This illustrates a stark reality: the open rental market is financially inaccessible not just to low-income households, but to a vast swath of the city's working and middle classes.
This affordability gap creates a pervasive rent burden. In 2021, 53% of all renters were rent-burdened, a crisis concentrated among the lowest earners.3 For households earning less than the median renter income of $70,000, the typical rent-to-income ratio was 54.0%.4 The situation is most dire for those earning less than $25,000 without rental assistance, where 86% are severely rent-burdened, spending more than half their income on rent.5 This forces them to forgo basic necessities and places them at constant risk of eviction.
The Scarcity of Vacancy
Compounding the affordability problem is an extreme housing shortage. In 2023, the city's net rental vacancy rate fell to 1.41%, the lowest since 1968 and well below the 5% housing emergency threshold.5 This scarcity is most pronounced at the affordable end of the market, where the vacancy rate for apartments renting for less than $2,400 per month was below 1%, and a virtually nonexistent 0.39% for units under $1,100.5 The vacancy rate for rent-stabilized apartments was just 0.98%.6
An Analysis of Core Policy Levers
Addressing New York City's housing crisis requires a multi-faceted approach. Three primary policy levers are available: increasing supply through zoning, providing direct public subsidies, and regulating rents. Each presents a distinct set of benefits and trade-offs.
Solution 1: Zoning and Supply Expansion
This strategy posits the crisis is a problem of insufficient supply. Reforming restrictive zoning codes to allow for larger residential buildings ("upzoning") and removing mandates like parking minimums can allow the market to build more housing, potentially driving rents down.14
Pros: This approach directly addresses the supply-demand imbalance that drives up prices.16 Over the long term, a significant increase in housing supply can stabilize rents and create "naturally occurring" affordable housing as older buildings become less expensive relative to new construction.18
Cons: Upzoning is not a panacea. In the short term, it can increase land values, triggering speculation and gentrification that displaces current residents before new units are even built.14 Furthermore, new market-rate construction is not inherently affordable and does not immediately serve the lowest-income households.14 The process is also slow, and there is no guarantee developers will build to the new capacity.19
Solution 2: Public Subsidies and Direct Support
This approach uses public funds to bridge the gap between market rents and affordability through mechanisms like tenant-based vouchers or public resources to subsidize the cost of construction of new income-restricted affordable housing.8
Pros: Subsidies are highly effective at improving housing stability and preventing homelessness for the households that receive them.8 NYCHA public housing, despite its profound challenges, remains the city's single largest source of deeply affordable housing, protecting over 520,000 New Yorkers from the private market.21
Cons: Demand far outstrips the supply of subsidized housing, with over 241,000 families on the public housing waiting list.21 The construction of new affordable housing, subsidized by the NYC Department of Housing, Preservation and Development, has not kept pace with the demand for low-income housing due to limited public capital and the limited capacity of agency staff executing financing agreements to subsidize construction.
Solution 3: Rent Regulation and Market Controls
New York's rent stabilization system covers roughly half the city's rental stock and limits annual rent increases for tenants in eligible apartments.1 A rent freeze is a more stringent form of this control.
Pros: The primary benefit of rent regulation is tenant stability. Rent regulated housing in NYC is a vital source of affordable housing, protecting incumbent renters from sudden, unaffordable rent hikes, preventing displacement and allowing families to remain in their communities.19
Cons: By suppressing rental income, rent regulations can disincentivize maintenance and upkeep of building systems and individual apartments. A rent freeze could accelerate these trends, as landlord operating costs increase but the rents they collect do not, potentially leading to additional disinvestment. The J-51 tax abatement and exemption program was designed by NYS to help incentivize investment in existing rent stabilized housing.
Case Studies in Housing Policy Innovation
Other cities facing similar affordability challenges have implemented innovative policies that offer valuable lessons for New York.
In 2018, Minneapolis enacted its "Minneapolis 2040" plan, a comprehensive zoning reform that eliminated single-family-only zoning and removed parking minimums.28 The results were significant: between 2017 and 2022, the city's housing stock grew by 12%, while rents increased by only 1%, compared to a 14% rise in the rest of Minnesota.28 This demonstrates that aggressive supply-side reforms can moderate housing costs.
Vienna has long pursued direct public involvement in its housing market. Today, approximately 60% of its residents live in social housing (municipal or publicly subsidized cooperatives).30 This large, non-speculative sector exerts a price-dampening effect on the market, resulting in rents significantly lower than in other major European cities.32 While critics note the model's reliance on high taxes and its unique historical context 33, Vienna's success highlights the stabilizing impact of a large, permanently affordable housing stock.
In 2008, Helsinki adopted a national "Housing First" policy, providing homeless individuals with immediate, unconditional access to permanent housing and support services.34 By converting shelters into permanent housing, Helsinki reduced long-term homelessness by 72% between 2008 and 2022.36 The approach has also proven cost-effective, saving an estimated €15,000 per person annually in avoided emergency service costs, proving homelessness is a solvable policy choice.34
Conclusion
New York City's housing crisis is a deeply entrenched problem born from a severe mismatch between incomes and housing costs, exacerbated by a historic shortage of available homes. The primary policy tools available—increasing supply through zoning, providing direct subsidies, and regulating rents—each present a complex set of trade-offs. Zoning reform promises long-term supply relief but risks short-term displacement; subsidies provide critical stability but are chronically underfunded; and rent regulations protect tenants but can stifle investment and supply.
There is no single solution. However, case studies from other cities demonstrate that meaningful progress is achievable. The candidates running for Mayor in NYC have all proposed a range of policies to make housing more affordable, with varying details and emphasis. Candidates for Mayor must include housing plans that deploy a multi-pronged strategy, learning from the above examples.
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