Expensive New York needs affordable housing. Can Mayor Eric Adams deliver?

Despite constant construction, New York City faces a critical shortage of affordable housing. Four decades of inadequate construction have driven housing costs to double the national average and reduced the rental vacancy rate to 1.4 percent, a quarter of the national average.

To meet the most pressing needs, Mayor Eric Adams hopes to loosen zoning regulations, which could lead to changes in neighborhoods, living conditions and the economic landscape.

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As rents and real estate prices continue to rise across the country, New York is hit hardest. Mayor Eric Adams is proposing a major rezoning to provide more opportunities for the city’s middle-class workers.

Nearly 70% of New York City residents live in rented accommodation. A third live alone. And most pay more than they can afford. The poorest New Yorkers have little choice.

“If the working class can’t afford to live here, the city can’t function,” says Olivia Leirer, co-director of New York Communities for Change. She says the city needs another three-quarters of a million apartments in addition to the current 3.7 million.

Mayor Adams supports denser housing: creating neighborhoods with 20 percent more housing units, converting vacant office buildings into residential space, and revitalizing single-room occupied (SROs), private bedrooms with shared spaces.

New York City was once an industrial metropolis with a dynamic working class, but it has become unaffordable for the middle-class nurses, teachers and firefighters who keep the city running.

Four decades of inadequate construction have driven housing costs to twice the national average and reduced the rental vacancy rate to 1.4 percent, a quarter of the national average.

To meet the urgent need, Mayor Eric Adams is focusing on one big idea in particular: loosening strict zoning regulations to allow for more types of housing – and not just in traditionally select areas. “A little more housing in every neighborhood” is his slogan for this goal.

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The ambitious project has the potential to dramatically change neighborhoods, living conditions and the economic landscape – even if skeptics doubt whether the goals are achievable.

A comprehensive rezoning has not yet been completed, but Mayor Adams and the city have already taken important accompanying steps.

Today, for example, the New York City Council unanimously approved a proposal to bring 7,000 new housing units to the East Bronx over the next decade—about a quarter of which would be designated as affordable.

“If workers can’t afford to live here, the city can’t function,” said Olivia Leirer, co-director of New York Communities for Change, an affordable housing advocate. Housing experts say the city needs 20 percent more housing – another three-quarters of a million on top of the current 3.7 million units.

“A little more living space in every neighborhood”

Mayor Adams’ plan calls for creating neighborhoods with 20% more housing units – provided the additional housing units remain affordable. The proposals include encouraging homeowners and religious organizations to build new housing units on their own unused land where possible, allowing more apartments above businesses, and eliminating mandatory parking in new complexes, which developers say are prohibitively expensive.

New York City Mayor Eric Adams is proposing to loosen strict, half-century-old zoning regulations that could dramatically transform the city’s neighborhoods.

The mayor wants to revive the popularity of single-room occupancy (SROs), a classic 20th-century housing style that offers private bedrooms with shared spaces. One-third of all New Yorkers live alone.

Another push is converting vacant office buildings into apartments. About 20% of the towers are vacant. The city’s new Office Conversion Accelerator said in an email that many buildings have asked about conversions and 10 have valid permits that could create 4,000 apartments over the next decade. Relatively few of the city’s office buildings can or will be converted, the email said.

Conversions are costly, but some units would be affordable thanks to new city tax incentives passed by state lawmakers this spring, as well as some other rezoning requests from Mayor Adams.

Albany also renewed tax breaks for developers building affordable housing units. The cuts replace a rebate that expired in 2022 and curbed housing construction by 76%, according to New York University’s Furman Center for Real Estate and Urban Policy.

Eric Kober, a senior fellow at the Manhattan Institute and a retired urban planner, says simpler regulations would have been more effective, but tax breaks are better than nothing: “Private developers are the ones building these housing units, and you have to make sure it’s profitable for them.”

Impact of zoning on housing costs

Most elected officials, residents, urban planners and other experts agree that restrictive zoning increases construction costs, drives up rents and stifles local economic growth. More money for rent means less money for clothing, food and entertainment.

Brian Cain of the city’s Independent Budget Office says it’s still uncertain whether the City Council will adopt the mayor’s initiatives this fall. Community officials say the rezoning is destroying neighborhoods; tenant activists accuse them of NIMBYism.

Previous administrations have rezoned select areas, but Mayor Adams’ administration would be the first since 1961 to implement a citywide rezoning. Mayor Adams is seeking 100,000 additional housing units over the next decade, with a “moon goal” of 500,000 by 2032. Some units would be reserved for low-income renters. Matthew Murphy, the executive director of the Furman Center, says the mayor’s moon goal is unrealistic — and the 100,000 is not what is needed given the expected demand.

The city planning office assumes that 108,850 housing units are possible by 2039 – less than the already inadequate annual average production of 25,000 units in recent times.

In April, the mayor’s office announced that the city was ahead of its goal of creating or preserving 12,000 affordable units this year. Based on figures from the New York Housing Conference and the city, about half of the new units created in 2023 were affordable.

Baaba Halm, vice president of New York’s Enterprise Community Partners, a national nonprofit that promotes affordable housing, said the city is a leader on the issue but still has a long way to go.

According to Harvard University’s Joint Center for Housing Studies, rent for middle-income households nationwide is $1,300. In New York City, rents last year were $3,000. For that to be considered affordable, a family must earn $120,000 – nearly double the $70,000 median household income for renters in the city.

“Newcomers can’t afford to come here, and long-time residents find it hard to stay,” says Manhattan borough historian Robert Snyder.

Owning versus renting

Owning an apartment can cost less per month than renting, but the high down payments make ownership impossible for most, says Nishant Sondhi, a real estate agent and fund manager who raises money for construction projects in Manhattan and Brooklyn.

The wooded enclave of Inwood in northern Manhattan was rezoned in 2018 despite community protests. This working-class neighborhood of five- and six-story apartment buildings and independent businesses will see several mixed-use, block-long complexes. They range from 12 to over 20 stories and will create 1,600 new affordable apartments and preserve 2,500 others, including The Eliza, an affordable, mixed-use housing, school and library complex that opened in June. Over 80,000 people applied via lottery for The Eliza’s 174 apartments.

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