What is the best way to build more housing in New York? Some groups on the left side of the YIMBY coalition, like More NYC and Victoria Fierce of East Bay Forward, call for a program of massive public affordable housing construction. Social housing is appealing, since it’s possible to directly link new units to people who are at risk of being displaced. But today, it can only be a secondary component in a program of building more housing. The ambitious scale proposed by social housing’s YIMBY supporters are hard to achieve because those who are most politically empowered don’t need new housing — and aren’t interested in paying taxes to support social housing for newcomers.
The housing situation in New York today is dire. The city builds very little housing, with a housing starts rate of 2.5 units per 1,000 residents, a fraction of the 10.7-unit rate in Tokyo, the most YIMBY of the big global cities. New York’s rental vacancy rate is about three percent, and a third of renters pay more than half their income in rent. Middle-class singles routinely live with housemates well into their thirties. Working-class residents of gentrifying neighborhoods are at risk of eviction.
This is not the first time New York has faced a housing crisis. At the turn of the century, the Lower East Side, crammed with entirely mid-rise construction, was the densest neighborhood in the world, approaching 400,000 people per square mile in 1910. One five-story building had 66 residents, crowding eight to a three-bedroom apartment. The building has just 15 residents today. The city solved its housing problem by building the subway, which let families move to farther-out neighborhoods and commute from Upper Manhattan, central Brooklyn, Queens, and the Bronx. The city financed subway infrastructure, and private developers built New Law tenements.
Other cities also faced similar crises during their period of greatest industrial growth, and some responded by building public housing. Vienna’s public housing construction has drawn accolades from Governing, a moderate good-government magazine, as well as from far-left Jacobin. Sweden’s social housing is popular, too, with a positive article in the Guardian.
In Vienna, the situation a hundred years ago was an emergency affecting virtually everyone. To curb inflation at the end of World War I, the government froze rents, killing private homebuilding. Homelessness was rampant, hundreds of thousands of apartments had no running water, and entire families lived in one room. After the war, the city elected a social democratic government, dubbed Red Vienna, which passed programs aimed at improving the conditions of long-time working-class residents, including building tens of thousands of units of public housing in a city with just two million people. Since the restoration of democracy at the end of World War II, the city has been under social democratic control, yet has not engaged in a similarly grand housing construction program since postwar reconstruction because there was never a domestic need for it.
In Sweden, the Million Program happened in a similar context to that of Red Vienna, but a generation later. Sweden industrialized and urbanized in the 1950s, later than most other Western nations. In 1960, 34 percent of households lived in overcrowded conditions, and 45 percent lacked bathrooms. The Million Program built a million affordable housing units within a decade, from 1965 to 1974, in a country that at the time had 8 million people. By the 1970s, both overcrowding and the share of households without bathrooms had fallen to five percent. At that point, the Swedish working class had adequate housing, and apartment construction plummeted. There was some American-style suburbanization, with single-family houses for wealthier people, but in the 1980s and 1990s their rate of construction crashed, too.
In the past decade, Stockholm has entered a new crisis, like New York. Its housing prices have exploded, because of a strong economy that’s attracting immigrants as well as migrants from elsewhere in Sweden. The Social Democrat-Green coalition aims to build 700,000 housing units nationwide in a decade, but it’s unlikely it will build more than 300,000 because the plan requires unpopular choices, such replacing turn-of-the-century mid-rise apartment blocks with taller buildings, or sprawling past a greenbelt of parkland, far from existing public transit infrastructure.
Leftist critics, who say that the housing crisis can be solved with rent control and public housing, attack social democratic parties for moderating and accepting market reforms. But housing growth came to a standstill in both Vienna and Sweden well before this moderation. Sweden only began to enact market-oriented reforms after the financial crisis of the early 1990s; until then, the Social Democrats were a party of the left, without any moderate or neoliberal influence. In Austria, the postwar economic regime nationalized industries; privatization and market reforms began in the 1980s, long after rapid construction of public housing in Vienna ended.
New York has a history of building public housing, too. In the postwar era, it built large housing projects; the best-known use of the phrase the projects refers to low-income towers, but some, such as Stuyvesant Town-Peter Cooper Village, were built for the middle class. By then, the overcrowding crisis of the early 20th century had subsided. By the 1960s, new public housing would mainly serve African Americans and Puerto Rican migrants, who the white establishment had little inclination to spend money on; the one big middle-class project from that era, Coop City, was built specifically to help the Bronx middle class escape the declining South Bronx. The association between public housing and hated minority groups persists, leading to continued budget cuts, including in the Trump era.
Today, demand for new housing in New York is so high in large part due to interregional inequality: the New York region is about 30 percent richer than the American average, while Vienna and its surroundings are only about as rich as the rest of Austria. As a result, there is less pressure within the rest of Austria to move to Vienna than there is in the rest of the U.S. to move to New York. Most other developed countries have the interregional inequality of the United States. Tokyo’s housing production level is closer to the target New York needs to meet.
What would it take to hit this target by constructing public housing?
Average hard costs for new housing in New York are about $300 per square foot, or about $250,000 per unit. If the city tried to build public housing on its own, at Tokyo’s rate of overall housing growth, it would need to spend about $20 billion annually, or a quarter of its budget. It probably doesn’t have the tax capacity for such spending; it is unlikely to spend such a large proportion of its budget on a program that benefits newcomers more than long-time New Yorkers, who usually own or benefit from rent stabilization.
Another question is where the new housing would be located. Turn-of-the-century New York had all of Uptown Manhattan, the Bronx, and Queens, and most of Brooklyn for expansion. Red Vienna and postwar Stockholm were likewise surrounded by undeveloped areas. Today, New York is built out, as are most of its suburbs, where zoning is even stricter than in the city. New housing has to be in already-developed neighborhoods, where it will face NIMBY sentiments from community boards, which are disproportionately drawn from the more comfortable and connected groups of each area.
However, social housing exists even in the most YIMBY regions. Tokyo has subsidized public housing with lotteries for low-income people. But the scale is not large: Japan has 120 million people, and two million public housing units. This is nothing like Sweden, where about half of all rental housing is public. A small program of social housing appears to be a necessary ingredient of housing affordability, even when zoning is lax. However, large programs are usually as unnecessary as they are unrealistic.
The route forward for housing affordability in New York needs to be predominantly private. The city should liberalize private construction as much as possible and let the market provide more housing. It should make an effort to change the rules to reduce the power of local NIMBYs to veto new development. The city should keep a comparatively small program of subsidized housing for the poorest New Yorkers, but it cannot and does not need to engage in a massive public construction program to solve its affordability crisis.