Keith Bedford for The New York Times
Similar to San Francisco, more housing development in New York City fails to lower housing costs
Urbanist ideologues led by Senator Scott Wiener, Silicon Valley tech executives and a cadre of young urban professionals claim that the best way to lower housing costs is to allow for almost unlimited housing development by the private sector.
As I've explained in greater detail in previous articles and as carefully analyzed and explained here by Bloomberg contributor Justin Fox, decades of massive housing development in New York City have failed to show any evidence of the theory that profit motivated developers will choose to build affordable housing.
Comparing New York City with San Francisco, we see statistical similarities. The population of NYC (five boroughs) is about 8.1 million and the total number of housing units is currently about 3.5 million: a ratio of 2.31 persons per unit. The population of San Francisco is about 864,000 and the total number of housing units is currently about 386,755: a ratio of 2.23 persons per unit [U.S. Census].
The article below notes that NYC has added 488,478 housing units since 1991 (a ratio of about .061 per person), whereas San Francisco has added about 50,000 since 1991 (a ratio of about .057 per person). Accounting for margins of error, statistically, the cities are pretty much the same.
This is relationship also borne out by the housing pricing and rental trends, which are also statistically correlated. In both cities, more luxury housing is being built in the past 10 years and rental rates have been dropping for higher end units for about 18 months.
If you run comparisons of the NYC Metropolitan Area (approx. 20.2 million people) and the San Francisco Bay Area (approx. 7 million people), the ratios become even closer but the San Francisco Bay Area has a slight lead in overall net units created. If the theory that more building leads to lower housing costs were correct, then the SF Bay Area should show a greater decline in housing costs, but that is not the case. In fact, in rough terms Bay Area housing prices are comparatively higher overall and on a per capita basis (persons per unit), even though housing growth has been relatively similar.
The likely cause of this appears to be that job growth in the San Francisco Bay Area is notably faster than the New York Metropolitan Area, particularly in high paying sectors like technology (Sources: San Francisco Curbed; New York Planning Department: Employment Patterns report, 2016). We also should consider that the median income in San Francisco was approximately $113,000 in 2017, while the median income in New York City was approximately $85,900.
Overall, this suggests that housing development by itself is not producing affordable housing for those most in need: lower income, lower middle class families and the working poor. This is consistent with historical data that since 1934, the vast majority of affordable housing has been developed and maintained with financial assistance from a variety of federal and state funded housing subsidy programs.
(Other Sources: New York Department of Labor Statistics. Plan Bay Area 2040, San Francisco Planning Department: Housing Inventory Report)
New York's Have and Have-Not Market Housing Market
If you've got lots of money, it's getting easier to find an apartment. If you don't, good luck. New York City has added an estimated 488,478 housing units since 1991. For a city that has added 1.1 million jobs over that same period, that's not great, but it's not terrible, either. Where things get complicated -- and in some ways less encouraging -- is in exactly what kind of housing it has added.