Optimism is Warranted

Many New York City and State officials,^[1] including the mayor and governor, have obviously read The Housing Theory of Everything or something like it. This is evident by their sharp, bold rhetoric that’s backed up with increasingly concrete action. They have an excellent grip on the economic, environmental, procedural, accessibility, social, cultural, historical, and other effects of housing policy, and they’ve laid those out clearly. They know we need to build, and they acknowledge that without hedging. While I believe they need to go even further, I am pleased with their current stances. To go further, they need more support from all of us, which is straightforward.

We have more people than homes. This shortage gives landlords the power to charge any price they want and leaves too many New Yorkers with no place to go. That needs to change. And history is on our side. We used to build things; we can do it again. We built the Empire State Building in just over one year at the lowest point of the Great Depression. 100 years ago, we built 750,000 new homes, more than three times the number of homes built over the past 10 years. Think about that for a minute. —Eric Adams, NYC Mayor, December 8, 2022

While this essay is not comprehensive (follow-on pieces will explore more), it introduces these ideas:

• We’re making good progress. Immense progress has been made toward housing abundance in New York. The freefall has stopped, the climb upward has begun. The housing crisis will end—it’s just a matter of how quickly and to what degree now. The political reality of housing is far sunnier than you know, but more clouds can yet recede.
• The rhetoric favors supply. We have reached a rhetorical turning point—the idea that housing supply is the root cause and solution to our housing crisis has reached the centers of power and taken root.
• Policy changes are underway. Needed policy changes are already being implemented, with political will being thrown behind even larger changes to come.
• You can make a difference. While political leaders are proposing and enacting needed changes, they still do not go as far as they should, and there are plenty of critiques of their changes. But you shouldn’t be discouraged by this—there are many opportunities to move the needle and contribute your political and social capital toward housing abundance.
• The NYC City Council needs attention. Many elected officials still need to be convinced that housing supply is our root problem, and that accelerating all kinds of supply is the best way out of the housing crisis (especially in the NYC City Council). Here again is an opportunity for individuals (and readers!) to throw their weight on the correct side of the scale.

But we know that building faster only works if we can build everywhere, so we need to start saying, "Yes in my backyard, yes on my block, yes in my neighborhood." No more locking communities out of prosperity because neighbors are afraid of change. —Eric Adams, NYC Mayor, December 8, 2022

New York Housing Politics Are Moving in the Right Direction

Before you perform an evaluation of a system, you must understand that system.

When it comes to politics and housing policy specifically, many people jump to a negative evaluation without coming to understand the concrete state of housing policy first. Due to the anti-politics meme, among other things, they assume the worst. This is magnified by the general public’s near-complete separation from its legislative and executive processes.

Some of the things pessimists think about New York City and State housing politics:

• Government officials aren’t that smart, and aren’t aware of the problems. Even if they are, they wouldn’t formulate good policy responses.
• There are not enough smart people in government to implement good policies.
• Government officials misunderstand housing problems so completely that they prescribe policy poison, rather than policy antidote.
• No one will advocate for the big, transformative change that is actually needed. They will only push inevitably inadequate incrementalism, and at stupefying costs.

While these are true to different extents in different parts of our vast political system, they are no longer the controlling case when it comes to housing policy, and we continue to move in a positive direction. Let’s look at some specific examples in the following sections.

Picture those three areas [New York, San Francisco, and San Jose], building the way the rest of the country was during this timeframe. The GDP for the entire nation would've gone up 14 percent. Wow. Just imagine if we did half of that, if we did half of what we were supposed to do during that time frame. —New York Governor Kathy Hochul, December 1, 2022

Political Rhetoric Has Shifted in Favor of Supply

New York State’s governor, Kathy Hochul, and New York City’s mayor, Eric Adams, both gave aggressive speeches on the housing crisis on December 1 and December 8, respectively. They call out the supply problem, note that housing policy is at the root of many other domains, and they propose great (but not perfect) solutions.^[2]

The Governor

Governor Hochul did not roll out any policy proposals in her speech, saying that she would reserve those for her State of the State address in January.^[3]

There are excellent reasons to believe she’ll back up her big talk—which acknowledged the full nature of, cause of, and solution to, our housing crisis—with action. She already attempted to introduce many housing-abundance policies at the beginning of this year (lifting the 12 FAR cap on residential buildings in NYC, legalizing ADUs, zoning for transit oriented development, and more),^[4] but eventually withdrew them during state budget negotiations, and in the face of political headwinds from anti-growth constituencies in places like Long Island.^[5]

You might wonder—why won’t the same thing happen this coming year? First: she has stood for election and won; she’s had time to build her staff and consolidate political capital. Her governorship is no longer the product of lieutenant ascension.^[6] Second: the general political and advocacy climate (driven by overwhelming economic evidence) around housing continues to move in a “pro-supply” direction. It’s harder to be in the anti-growth/anti-supply camp with each passing day.^[7] Third: she has the backing of NYC’s mayor, a marked departure from the contentious relationship between Mayor de Blasio and Governor Cuomo.^[8] Fourth: she has explicitly made housing policy addressing our supply shortage a top priority of her next term. The dedicated focus of a competent governor can bring policy back from the dead and push it lightyears forward.^[9]

The Mayor

In contrast to Governor Hochul, who is making us wait until January to get her full housing policy agenda, NYC’s Mayor Eric Adams has let fly with his own speech that also unveiled his administration’s Get Stuff Built report. He announced a goal of 500,000 housing units in the next decade, and identified 111 discrete administrative and other policy changes to increase housing production in NYC, many of which are already underway.^[10] I’m most excited about his plan to exempt residential developments of 200 units or less from Environmental Assessment Statements, which needlessly add cost and time to housing development.^[11]

These numbers would have been shocking even a year ago,^[12] and represent a huge step forward, especially because they are backed with action.

Update on 12/15: on December 14, the mayor and the governor co-released the “Making New York Work for Everyone” Action Plan, which focuses on rejuvinating NYC's business districts. In keeping with other remarks they've made (especially those I note in my summary reviews of their 12/1 and 12/8 speeches), this means advocating for increased housing production for workers and making business districts more mixed-use. This takes the specific form of abolishing the state FAR cap of 12 on residential buildings in NYC, among other things, and the report specifically calls out the severe limits and damage that the 1961 downzoning has done.^[13] At the moment this is just a plan, but the indicator lights seem green going into 2023.

The City Council

The New York City Council, led by Speaker Adrienne Adams, is nominally committed to fighting the city’s housing crisis. Although the body’s stance on tackling the problem isn’t as sharp as Mayor Adams’ or Governor Hochul’s (and since it is a composite body of 51 members, this is almost inevitable), its rhetoric has also shifted in favor of providing more housing supply. Speaker Adams praised several recent, large upzonings, saying, “These projects affirm the Council’s deep commitment to confronting the city’s housing shortage…”.^[14]

Further, more and more individual members of the city council are changing their views on housing supply, pushing the council’s rhetorical direction along with them; where many of them before (and many still) view housing supply as a problem,^[15] the totality of economic evidence now produces delightful tweets like this from District 3’s freshman council member, Erik Bottcher.

Another first-term city council member, Rita Joseph, has introduced two bills that would amend the NYC building code to make buildings faster and more economical to construct. While the bills aren’t perfect (but so what), they are exactly the kinds of things that city council members should be legislating on during a housing crisis.^[16]

Update on 12/15: On December 15, Speaker Adams released her Planning & Land Use Guidelines and Toolkit. The report lacks any specific numerical housing targets, but it highlights the need to plan for housing and land use at a city-wide level, and (correctly) calls the city's contemporary approach "ad-hoc." The report is meant to be a set of guiding principals more than detailed policy implementation, but represents a great move forward, especially in combination with everything else that I've mentioned in this post. It also (somewhat reluctantly) admits that market rate housing is needed as well.

And so it is imperative with our call of a full government approach to have this moonshot moment of 500,000 homes. It is low, middle and market rate. And the goal is not to displace, and I think reports are starting to show that development does not have to be displacement. It's not about removing long term residents from their communities, but allowing them to be part of the development of their communities. —Eric Adams, NYC Mayor, December 8, 2022

If we want to remain that city, the economic engine of America and the most diverse community on the globe, we must get stuff built, not for the few, but for the many. Brick by brick, block by block, this new city will rise again together. —Eric Adams, NYC Mayor, December 8, 2022

Political Opposition and Policy Critiques

Municipal Employee Shortages

Mayor Adams’ moonshot announcement of 500,000 new homes in the next decade was met with some critique from Speaker Adams, who said, “A set of ideas focused on increasing the pace of development to confront the affordable housing shortage while simultaneously understaffing and eliminating positions at DOB, HPD, and the agencies required to do the work will not move us forward.”^[17] Building that much would require good staffing in many city administrative agencies (think of the permitting, etc), and the city is currently experiencing a large outflow of municipal employee talent.^[18]

When taking questions after his December 8 address, Mayor Adams addressed a similar concern from a reporter, saying, “... it's up to us to adapt to this norm and come up with innovative ways of getting these projects through. And I've been meeting with companies, corporations, and other individuals who are saying we are using antiquated methods on producing a better product.” Although the Speaker raises a good point—you do need enough talent in the right places in government—I think the mayor also points to something important: process improvement. We’ll see if the city can hire talent and put it in the right spot. As the Twitter layoffs have shown, talent allocation is vital, and sheer numbers of employees don’t indicate better performance.^[19]

The City Council

Many city council members benefit from retaining their norm-but-not-law right to block housing development in their district. Although I don’t think they’d ever come out and say it that way, the council norm of member deference^[20] gives each council member the opportunity to look like the good guy by fighting every large rezoning/development and trying to extract huge concessions from them (this often results in delays, increased costs, and less housing units). Even when upzonings prevail over individual council member opposition, and even when they come with things like more community space, the projects themselves are often smaller and more expensive. The city council will need to continue changing the norm of member deference to increase the rate of housing development in the city.

Critique and Obstacle Bricolage

• The transit-oriented-development in the mayor’s plan is not sensibly scoped, and needs to go further.
• Many of the zoning and process changes are happening quickly, but others aren’t happening as fast as they might.
• We still have a lot of work to do to import enough skill into the government so that it can function as an effective public developer.
• The mayor has not yet come out in favor of eliminating parking minimums citywide.^[21]
• New York City’s community boards often function as blockers to development, and more needs to be done to change that. This is currently in the hands of the borough presidents (and the city council members they consult)—they need to appoint more pro-housing-supply individuals to community boards everywhere. Update on 12/15: in a possibly-first, Manhattan Community Board 4 accounced a housing plan that could add 23,000 new homes, and this was quickly backed by multiple city and state legislators and the Manhattan Borough President. The ball is rolling here now.^[22]
• The idea that we used to build (but can't anymore) is true in many ways, but not in others. The mayor's invocation of the Empire State Building as an example of good/fast building is appropriate, but there's a lot to it.
• New York City Comptroller Brad Lander recently appeared before the City Council to advocate for long overdue property tax reform that would further incentivize rental property development. We'll see if the city council and the mayor move forward with these needed changes.^[23]
• More to be expanded upon in follow-on essays. But for now, recognize that we have taken enormous strides forward, and are aimed in the right direction.

I can be a dreamer too, but I'm a doer. We have a chance to do something extraordinary here. I will meet this with the fortitude and the zeal that's going to be required because we've never had a statewide strategy on housing before. But under my administration, that will change in January. We will act boldly. Not next year, not the next day. There's no kicking this can down the road. I'm picking that can up right now. I'm saying, "We're going to fix this." —New York Governor Kathy Hochul, December 1, 2022

As the governor said last week, there's no kicking this can down the road. We've tinkered around the edges enough. We have failed too many people for too long. It's time to build the next generation of affordable housing in New York City. Experts have proposed different numbers, but everyone agrees, to address the affordability crisis, we must double the rate at which housing is built in the city. It's a major task, a major ask. But I did not become mayor to climb a hill, I became mayor to climb a mountain, and I want every one of you to climb it with me. —Eric Adams, NYC Mayor, December 8, 2022

The Enemy’s Gate is Down

New York has arrived at the pivotal moment where it will begin to resolve its housing crises. There is no better time to jump into politics. And if you’ve gotten this far, you should have a more optimistic view of New York housing politics than you did before. Things are moving in the right direction, although much remains to be done.

In politics, optimism is usually reserved for the agentic, knowledgeable, and determined. It is hard won. Pessimism, while sometimes warranted, is most often a result of ignorance, rather than actual knowledge of reality. It is free to anyone.^[24] But optimism is warranted here, and the more of us who act on that recognition, the more it becomes the case.

New York City and State seem to have turned the corner. Over the past year we have witnessed a massive rhetorical and policy shift on the housing crisis from government officials, and I suspect it will only get better from here. The housing crisis will end; it is just a matter of speed and degree now, which will be influenced by who enters the political arena. You might now ask yourself: “Will I do anything about it? Will I get involved?”

This is a daunting task for most people, because they don’t know how to interface and successfully interact with our political system. The very act of asking them to “get involved” provokes several psychological defense mechanisms: (1) they push it off, because they don’t know how to do it, (2) they play the value of political action down, often in the form of an opportunity-cost analysis, because they don’t understand how and why it can work, and (3) they dismiss it, because it seems like a lot of work, and they don’t have time to figure it out.^[25]

If any of your responses match the three items above, but you want to feel differently, please email or DM me on Twitter. I’ll discuss how you can get started, what you can expect, how to join those already in the arena, and more. If you really want to get acquainted with NYC’s government, you can also sign up for my class. There are so many good changes happening in favor of housing abundance—it’s just a matter of being aware of them.^[26]

If you have a busy life anchored by non-governmental endeavors, and you’ve ever thought “I will support the politicians that come along and declare the bold housing policy change we need, if they come along,” your time has come. Those politicians are here. The republic calls.

Excelsior!

The enemy’s gate is down.

Today, I am issuing a call to our partners in the City Council, and our colleagues in Albany and in D.C., to the development community, nonprofits, faith leaders, and neighborhood advocates. Let us work together to meet the need for 500,000 new homes over the next decade. This is our mission, our moonshot, a bold effort that must fire ambition and inspire teamwork, because teamwork is the only way we get this done. We need everyone doing their part to reform outdated laws, expand incentives, increase coordinations, and build, build, build. And we must start now. —Eric Adams, NYC Mayor, December 8, 2022

See this follow-on post for a summary of good quotes from both Governor Hochul and Mayor Adams’ speeches earlier this month.

Notes

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1. And their staff, obviously. Probably mostly their staff. But one never knows. Picking good staff is part of being a good elected official, so credit all around. ↩︎

2. But who wants perfect? In politics, the search for perfection often leaves you with nothing at all. B-minus politics are the way! Per my essay B-minus Politics: “Government isn’t about finding solutions, it’s about replacing worse and less interesting problems with easier and more tractable ones.” ↩︎

3. From the rush transcript of her December 1 remarks: “So, I will say this: More will be revealed in my State of the State address. I know you're a lot of policy wonks and you're dying, "What is the answer? Tell us, tell us, tell us, oh, Governor, what is the answer?" And let's talk about today as maybe being more of a trailer for the movie than the premiere in January. Okay. So, I just want to get you interested in seeing the characters and the players and the actors and something that has to unfold. And it has to be an Oscar winner. We have no choice.”

   You can also get a good overview of her likely policies in this piece from the Gotham Gazette that followed her December 1 speech. ↩︎

4. See her office’s press release following her 2022 State of the State address. ↩︎

5. Before you jump to any conclusions, no political party has a monopoly on being anti-growth. Long Island’s Democratic state senators unanimously opposed NYS legalizing ADUs throughout the state. ↩︎

6. She became NYS’s governor in August 2021 following the resignation of Andrew Cuomo. ↩︎

7. Ezra Klein called this “supply-side progressivism” in The New York Times. ↩︎

8. It cannot be stressed enough how their feud prevented collaborative, good governance. ↩︎

9. We’ve already seen this happen in Governor Hochul’s short time in office with the Interborough Express. The project is quite susceptible to critique, but my point here is that Hochul can absolutely move the political needle when she wants to. ↩︎

10. See page 13 of the Get Stuff Built report: “In the months since the launch of BLAST, city agencies have already completed implementation of several improvements, with approximately half of the identified improvements to be implemented in the short term, over the next 12 months. Then most of the second half will be implemented in the longer term, generally over the next 12-24 months. And several major improvements—including those requiring ULURP review or major technology upgrades—may take up to 36 months to implement. In some cases, a quick and easy change may be implemented first, followed by a more significant and substantial change to the same process.”

    You can also see this article from City and State for a good overview of the mayor’s speech. ↩︎

11. See page 18 (page 20 of the PDF) of the Get Stuff Built report. This is very similar to a needed policy that former Deputy Mayor for Housing Vicki Been proposed in September 2022 at the 1:13:06 mark in my transcript (just control+f for “200”). ↩︎

12. Plenty of people who do excellent work in economics and housing policy called for ambitious housing targets for NYC in the past few years, although no prominent elected official took up that standard. That has now completely changed. ↩︎

13. You can find a summary overview of the report on the NYC Empire Development Corporation's website here. From pages 57-58 of the report: "When it comes to commercial buildings, and nearly all other types of buildings, New York City has the authority to regulate how tall and dense they should be, considering neighborhood context, sunlight and air, and other quality-of-life issues.

    But when it comes to housing, New York City is arbitrarily and harmfully limited as to how much housing it can build. We can build dense offices but cannot freely build all of the homes our people need. This is because the State’s Multiple Dwelling Law bars any residential development from exceeding 12 in its Floor Area Ratio (FAR), the ratio of total building area to area of the lot that it is on. As a result, fewer homes are built than are needed, rent is high, and an affordability crisis festers and threatens growth.

    Why was residential development limited in dense business districts in the first place? When the Zoning Resolution was adopted in 1961, standard business districts topped out at 15 FAR, with housing allowed at up to 12 FAR, reflecting the idea that these districts should be primarily commercial in nature even though residential uses would be allowed. In the more than half-century since, commercial FARs well into the 20s have become common in Midtown, but State-level regulations have left residential FARs stuck at 12. While these business districts should remain primarily commercial in nature, there is ample room to allow higher FARs for residential buildings to help catalyze business districts that are more mixed use.

    Large office floor plates with vast amounts of interior space are not always well suited to residential conversions. Sometimes, a better option would be tearing a vacant and outdated building down and replacing it with modern construction better suited to residential housing. But these State law-imposed limitations on density may make the financial considerations of new buildings untenable and artificially constrain the city’s housing supply.

    We will work in 2023 to restore New York City’s ability to control its own housing supply by amending the State-level Multiple Dwelling Unit Law to remove the 12 FAR cap on residential buildings." ↩︎

14. You can read the full November 22, 2022 press release here. From The Gotham Gazette: “In total, the City Council approved 42 rezonings between January and November, allowing for the creation of 12,245 housing units, of which 7,811 units, or almost 64%, are below market rate, according to a list provided by the speaker's office. (That total only includes housing where Council approval is needed for changes to zoning rules, and does not account for as-of-right private development.)” ↩︎

15. This doesn’t mean that those members don’t have valid concerns (displacement of existing residents, rising rents, etc); but usually those concerns are the terrible effects of our inelastic housing market, and council members can’t see that due to all kinds of motivated reasoning, on top of status quo bias. Every policy comes with trade-offs, including abundant housing. But for housing, those trade-offs are unequivocally worth it. ↩︎

16. You can find the building code here. It is part of NYC’s administrative code.

    Council Member Joseph’s two bills can be found here and here.

    The City Council, in its immediately prior session, also approved cross-laminated timber buildings as part of a much-needed, but still inadequate, update of NYC’s construction codes. ↩︎

17. This comes from a city council press release from December 8, the same day that Mayor Adams gave his housing speech and released his Get Stuff Built report.

    This all comes on the heels of the city council passing a civil service ambassador program backed by Speaker Adams to increase awareness and access to municipal jobs. ↩︎

18. The Gothamist covered the phenomenon well in September 2022, and Streetsblog has covered the particularly acute staffing shortages in the city’s Department of Transportation.

    Per The New York Times: "...the mayor in September [2022] demanded that his agencies cut city-funded expenses by 3 percent this year, and 4.75 percent the next. The effort reduced the current fiscal year’s budget gap by nearly $1 billion and will cut future deficits even further." ↩︎

19. From the December 8 post-speech Q&A. First, a question from a reporter, followed by the mayor’s response:

    “Question: Real quick. I see a few of the objectives essentially fill vacancies that already exist. And a lot of these agencies, we've talked about the financial issues the city's facing, we've talked about the staffing issues. How do you reconcile those with this very personnel heavy approach here?

    Mayor Adams: And that is something that has been consuming a lot of my time for the last two months. One, I believe that we have to have outside eyes look at how we function as a city. And all of these processes, you can't have money, ideas, but the ideas are getting caught in the bottleneck of the system. And it's no excuse to me that we don't have enough manpower. That is not an excuse. The new norm is that they're going to be challenges on staffing up. Even Brad did his report that we have an 8 percent vacancy rate in the city. He missed that he has a 14 percent vacancy rate in the comptroller's office. That was not included in his analysis. But that was with all of his work for homes, all of his remote work, all of his modifications, he still has a 14 percent vacancy rate. There's a challenge. And so what I'm saying to my leaders that are behind me, we cannot have a reason for not reaching these goals because of the existing circumstances that not only post-Covid created, but just a new norm. We have a national workers shortage problem. Every company I speak with, no matter where I go across the country that's saying the same thing. So now it's up to us to adapt to this norm and come up with innovative ways of getting these projects through. And I've been meeting with companies, corporations, and other individuals who are saying we are using antiquated methods on producing a better product. And I truly believe that the mere fact that we don't have competition as a corporation has, that there's no real incentive to modify government to produce a better product and to create a better government customer experience, and we are focusing on doing that." ↩︎

20. See this post from the Furman Center for a review of member deference. ↩︎

21. At the 1:18:46 mark of a public information session given on October 17, 2022, by the Department of City Planning, the political director of Open New York asked whether the mayor and the DCP would eliminate parking minimums as part of the mayor’s City of Yes zoning updates. The DCP said they were exploring the right balance, and did not confirm that they are going to do that. So we’ll see. ↩︎

22. You can read a write-up of the plan here, and you can read the plan itself here. It's a great step forward and a big net-positive development. However, I'll quote the last portion of the NYT article that points out some qualifications to that:

    The plan, which incorporates earlier efforts to develop in the district, calls for more than 37,000 homes to be added to the community district overall. That includes the addition of 23,000 new homes, the preservation of more than 3,700 homes and thousands of homes under development and already completed between 2015 and 2019.

    Of the 37,000 total, more than 14,000 units would be considered affordable for middle-class and working-class New Yorkers, the board estimates.

    Vicki L. Been, faculty director of New York University’s Furman Center, said she could not think of another example in recent memory of a community board creating such a detailed and ambitious plan.

    “They are being constructive,” said Ms. Been, a former deputy mayor for housing and economic development under former Mayor Bill de Blasio, who worked with community boards on housing projects. “They are stepping up to the plate.”

    But she said allowing community boards to set their own priorities could clash with citywide needs.

    The plan, for example, calls for many of the new homes considered “affordable” to target middle-income people, such as families of four earning more than $133,400 a year. But the city may want and need to prioritize and invest in homes affordable for lower earners in relatively wealthier parts of Manhattan.

    “The positive is, they’re taking the initiative,” she said. “But the downside is, you can’t have 59 different housing policies.” ↩︎

23. You can see the comptroller's press release here. He delivered these remarks via testimony to the City Council Finance Committee. In the same hearing, the Citizens Budget Commission also delivered remarks on the need to reform NYC's property tax system, in large agreement with Comptroller Lander. You can find out about the committee hearing, which occured on November 15, 2022, here. You can access the hearing transcript, a report on property tax reform prepared at the end of the de Blasio administration (THE ROAD TO REFORM: A Blueprint for Modernizing and Simplifying New York City’s Property Tax System), and more. ↩︎

24. I will continue to quote myself until morale improves. ↩︎

25. I discuss the deeper origins of this phenomenon in Atlantis on the Hudson. ↩︎

26. Market-shaping mechanisms, and markets themselves, are shifting to incentivize ADUs, for example. That’s not an NYC or NYS thing, just an example of a rule change that incentivizes the development of more housing. ↩︎