As an ally of those calling for an end to such policies as rent control and overly restrictive zoning, I hesitate to throw a bucket of cold water on these affordability strategies. They certainly would, over time, have a positive impact on housing supply. Whether New York can build its way up to affordability, though, is a more debatable question.
A basic point I'd raise is that in almost all times and places, the solution for urban population growth has not been vertical densification, but outwards expansion into greenfield areas. Historically, dramatic vertical growth was the product of exceptional circumstances, generally related to the presence of city walls paired with external military threats discouraging sub-urban construction, or the occasional imperial mega-city. The development of skyscrapers in the late 19th century looked to have the potential alter this longstanding pattern, but for several reasons, greenfield development still remains today the overwhelming source of accommodation for urban population growth:
- The naturally slow pace of incremental infill development in a built-up area. Even where demand is very high, the process of acquiring parcels from a multitude of private owners, demolishing structures, and rebuilding, is slow and arduous in the best of times. The technological possibility of skyscrapers themselves may inflate land values, resulting in speculative holding that further deters redevelopment.
- The opportunity cost of densification. Existing buildings, even of very low value, still represent a sunk cost now generating a reliable stream of income for a current or prospective owner. The new building must not only justify itself on its own terms, but justify itself in relation to the profits being earned on the existing building, less the time lost to construction.
- Political opposition. It may be condemned as unfair, inefficient or narrow-minded, but as long as there are people living in neighborhoods, there will be people willing to oppose new and denser development in those same neighborhoods. That doesn't mean strategies to reduce neighborhood opposition to densification or to encourage infill shouldn't be pursued, but it does mean that, all else being equal, greenfield development will almost always present fewer political obstacles.
San Antonio and Charlotte, as sprawling as they are, have distant greenfield margins. New York's dense core, by contrast, is surrounded by geographic boundaries and vast areas of very low-density residential spreading far north into Westchester and Fairfield Counties, and west into New Jersey. Houston proper, even in the absence of zoning, only experienced a 7.5% population increase within its largely built-out limits, even as its MSA grew by over 26%.
Were zoning abolished, rent control repealed, and developers given free rein in New York, could growth rates remotely comparable to sunbelt cities possibly be matched? Not likely. Even equaling Houston's growth rate – a city with abundant vacant land in and around its downtown – would probably be a challenge. Affordability is an even more distant goal using supply-based strategies alone. Relaxing development restrictions that worsen affordability and hinder supply is a crucial goal, but not one which is likely to lead to rapid population increases, or housing cost relief, in built-out and geographically-constrained cities.
Can New York Build Its Way Up to Affordability?