If your rent is too damn high, blame city government for trying to be Matthew McConaughey.
Accepting his Oscar for Best Actor this month, McConaughey said one of the things he needs daily is “someone to chase” — so he chases himself, 10 years down the road. He knows he’ll never “catch” himself, of course. But at least he has someone to chase.
When it comes to housing, the city is also chasing something it will never catch — indeed, something that will never exist: the fantasy of affordable apartments for all who need them. And this chase only deepens Gotham’s never-ending apartment squeeze.
Mayor de Blasio is now out to repeat the mistake, only with more zest: He’s vowing to build or preserve some 200,000 “affordable” apartments. A new project at the site of the Domino Sugar factory on the Brooklyn waterfront illustrates the folly.
Under a pre-de Blasio plan, the Domino developer was to build 660 units of affordably priced apartments on the site in exchange for being allowed to put up offices and luxury residential towers taller than what zoning laws allow. De Blasio came in and demanded more (which nearly killed the deal, leaving even less new housing, if any). The mayor “won”: Under a compromise, there’ll now be 700 “affordable” units, some larger than previously planned.
Now, subsidized housing always creates fairness issues. Time and again, some of the folks who land the “affordable” units aren’t truly poor, just people who gamed the system. And even the poor ones will suddenly be getting a much better deal than countless other poor people in town.
But in this case, the mayor could’ve gotten a lot more than 700 below-market units if the developer could’ve built them on some other site, where costs are lower than on waterfront property (often the most expensive land in the city). Why should the lucky few “affordable” tenants get to live in some of New York’s choicest real estate — the Brooklyn waterfront, with its spectacular views of Manhattan — especially when that means there will be fewer affordable units?
Our leaders seem to think everyone is entitled to everything, regardless of what they pay. Public Advocate Letitia James, for example, has asked the city’s Human Rights Commission to investigate on behalf of some Upper West Side rent-stabilized tenants who aren’t getting access to amenities (a pool, a kids’ playroom, a gym) their landlords spent millions on for their full-fare, market-rate tenants in the same building. But the stabilized tenants say they feel like “second-class citizens” — and never mind that they don’t pay for the amenities.
In 2001, then-FCC Chairman Michael Powell had the right answer for this kind of thinking. Asked about America’s “Digital Divide” (between those who could afford Internet access and those who couldn’t), he cited the “Great Mercedes Divide”: “I would like to have one — but I can’t afford one.”
But it’s yet another set of problems that best explains why New York hasn’t made much of a dent in eliminating the century-old “housing emergency.”
There’ll always be more demand for “affordable” housing, because people will always want a deal better than market rate. After all, “market rate” is the rate at which there are just enough paying tenants to match the number of units available: Raise rents above that rate and apartments go vacant; lower rents and you’ll almost surely produce a glut of would-be tenants who can’t find a place.
That is, by definition, there will always be a shortage of below-market-rate housing.
If you want to drive down the market rate of housing — so everyone benefits — you need to increase supply by making it cheaper to build, or reduce demand. (Rents are cheap in Detroit because so few people want to be there these days.)
Instead, New York’s affordable-housing programs hurt everyone who isn’t lucky enough to get a subsidized apartment, because they take those units off the market. Subsidized tenants have powerful incentives not to relocate — even when, say, they become empty-nesters with rooms to spare.
All that hoarded housing limits the supply available to anyone who’s looking, whether kids who just moved to town or growing families. That drives up rents and purchase prices — and makes it nearly impossible to find an affordable place to live.
New York now regulates the rents, directly or indirectly, of some 1.3 million units, more than 60 percent of all rentals and 40 percent of homes. We’ve built or converted hundreds of thousands of apartments priced at below-market rates. It’s wreaked havoc with housing — and yet, we’re no closer to satisfying demand.
McConaughey might never catch his later self, but at least he’s not making his situation worse. That’s more than New York can say when it comes to chasing affordable housing.