To Build Itself Out Of The Housing Crisis, New York City Will Need To Get Creative

New York City is in the midst of a housing crisis. As the city drives economic growth, population density and a stronger commitment to safety, it has become increasingly difficult for residents to find housing they can afford.

The housing crisis in New York City impacts residents at all income levels, with the greatest hardships hitting low-income individuals and families. The city has added 500,000 people since 2000, and the number of residents is expected to reach 9 million over the next 20 years.

To support this growth, real estate developers are working alongside the city to build and use space that increases affordable housing opportunities.

“It’s no longer just about building up or building out,” Capalino+Co. Executive Vice President for Land Use and Housing Strategies Richard Barth said. “Developers need to be preparing for the future, and this means getting creative about new housing types, financing and location."

Exploring New Territory

When New York City Mayor Bill de Blasio took office in 2014, he pledged to address the city’s affordable housing crisis and income gap by preserving or creating 200,000 units of affordable housing by 2022. The city announced it exceeded this initial goal in 2017, and plans to take the initiative up a notch. De Blasio’s Housing New York 2.0 plan will put the city on a path to reach 300,000 affordable housing units by 2026. This is enough to house the entire city of Boston, according to the plan. 

New York City has encouraged affordable housing by increasing density through zoning and direct new housing placement. But New York City’s neighborhoods are changing, and the city has initiated several rezonings for new housing and mixed-use developments.

While New York is dense, it is also expansive, so there are several opportunities to grow outside traditional residential and commercial areas. In the Bronx, development plans are underway to build several thousand units of mixed-income and affordable housing on Jerome Avenue.

"Areas further out from Manhattan’s core continue to provide housing and development opportunities," Barth said. "Other rezoning areas in the city’s pipeline include Gowanus and Bushwick in Brooklyn, Long Island City in Queens, Bay Street in Staten Island and Inwood in Manhattan. We are working with our clients to identify and pursue new housing and mixed-use opportunities within these and other areas of the city.”

Affordable Senior Housing

While New York City continues to attract young people and recent graduates, the city's existing residents are aging in place. The city's 65-and-over population grew by 19.2% from 2005 to 2015, according to a report from the New York City Comptroller’s office. This is faster than the growth of the total population and the population under 65. The number of seniors living in the city is expected to grow 40% by 2040. 

The city government has taken note of this demand for affordable and accessible senior housing options.

"In 2016, the city adopted more flexible zoning to encourage the development of affordable senior housing," Barth said. "Using this new zoning and expanded financing, we have identified several opportunities for new affordable senior housing by redeveloping underutilized parking lots."

In 2017, de Blasio announced plans to increase affordable senior housing across the city through a Seniors First initiative. As part of this new program, the city will invest $150M toward making homes more accessible to seniors and people with disabilities. It will also create 4,000 new senior apartments and preserve another 6,000 senior apartments in neighborhoods where residents are most at risk of being pushed out by rising rents.

“The federal government has gotten out of the business of building senior housing, so New York City is jumping into it in a big way,” de Blasio said in a statement. “We won’t let seniors be pushed out of the neighborhoods they helped build.” 

Experimental Living Trends

In addition to traditional affordable housing initiatives, New York City developers have flirted with several new living concepts, and now they are turning these ideas into real estate. 

Co-living, a concept that offers single rooms with shared common areas, has entered New York’s residential landscape. This form of residential life was pioneered in Europe, and Denmark alone boasts more than 700 co-living communities. The U.S. has been much slower to catch on, with fewer than 200 communities in 25 states. But the concept is growing popular in major cities like New York, with companies like Ollie, WeWork and Common taking center stage. Co-living can provide a built-in community, and many people living in large cities have found it to be a more cost-effective alternative to traditional apartment setups. 

Micro-housing has also been widely adopted in cities across the U.S., with developers finding that building small has big advantages. These micro-units save space, which gives developers an opportunity to build more units and house the city’s most vulnerable populations, including single-parent households and seniors. The concept has faced regulatory obstacles in New York City, but some believe it could serve to benefit the current housing landscape. 

“As a city, we must aggressively pursue new housing options, eliminate unnecessary regulatory obstacles, expand the use of new building concepts like modular housing, and creatively take advantage of funding sources at the local, state and federal levels with innovative strategies,” Barth said.

Looking To New York City's Future

As the city makes room for affordable housing opportunities, space utilization and land use become major considerations.

Nontraditional land can provide new opportunity, Barth said. Houses of worship, institutions and rail yards, for instance, can offer opportunities for development. The city is also exploring expanded opportunities to transfer unused development rights from landmarks in order to promote new mixed-income housing. 

"New York is a city of neighborhoods, accommodating a diversity of people. Just as we seek to provide more and new housing choices, we also need to provide neighborhood choice," Barth said. "That means working to ensure new housing does not undermine and overwhelm neighborhoods, and being strategic about the impacts of new housing initiatives."

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