HomeGovernmentHousing Affordability Is Complicated, But Upzoning May Be a Start

Housing Affordability Is Complicated, But Upzoning May Be a Start

The Problem

In 2018, 44 percent of renting NYC households were rent burdened (meaning they spent 30% or more of their income on housing) and 23% of households were severely rent burdened (meaning they spent half of their income or more on housing); this was with Section 8 vouchers and SNAP counting as income. High housing prices are a limiting factor on social welfare as well as economic growth, meaning that the political left and right should both see reason to confront the issue. Like all markets, the housing market is defined by supply and demand: all other factors being equal, having less of something scarce generally makes it more valuable, and vice versa. If there is more demand than available supply, prices will naturally rise to counteract the excess; if there is more supply than demand, prices will fall.

The defining characteristic of this unaffordability is a literal shortage of houses. The National Association of Realtors cited the gap in May at 5.5 million homes nationwide, and growing. This is principally caused by a lack of construction, particularly in the last decade, as  the U.S. built less homes in the 2010s than any decade since the 1960s—despite significant population growth. It’s worth pointing out that this problem is not limited to the United States, to high income countries, or even to countries with a highly urbanized population. Most major cities around the world are dealing with housing crises to various degrees, and many have been doing so for decades. This separates it from other affordability issues such as healthcare or college, which are more U.S.-based. However, there are exceptions suggesting this is not inevitable: for instance, Tokyo has kept up with demand (and maintained a relatively affordable market) despite being the most populous urban area in the world. The same cannot be said of NYC. It added only 0.19 houses for every net new job created between 2010 and 2018—a wider disparity than any U.S. city other than San Francisco. The ratio of the median home price to median income measures how many years a typical person might have to work to buy a typical home. In 2021, NYC had a ratio of 10.5—the sixth highest in the U.S. among large cities, and the highest among large cities outside of California (large meaning 350,000 people or more).

What Should We Focus On?

New York clearly has to do something, as the shortage will continue to grow if no action is taken (note that I differentiate between “New York,” for the broader metro area, and “NYC” for the city itself). Rent/mortgage relief and rent control fail to address the core issue of supply shortage. Relief programs can be of great benefit to those in need, and can increase the circulation of money in the local economy. However, it must be kept in mind that relief programs cannot solve the housing crisis by themselves (while rent control has mixed effects). With demand unlikely to subside, we must remember the following in the search for long term policy solutions: any policy that does not increase the supply of homes in line with market demand will not sustainably reduce prices. Public housing is also a popular suggestion for this, but it faces an uphill battle. NYC’s public housing currently has an estimated $80 billion maintenance backlog, fostering a stigma of its undesirability. Significant expenditures on new construction are thus a hard sell with voters, especially with the city’s noted spending inefficiencies. This leaves solutions that focus on aligning with the incentives of the housing construction sector, a framework that falls under the category of “supply-side progressivism.” Instead of fighting corporate interests, this is one area where they may actually be of use to us.

A Potential Solution

Like most urban areas, New York has zoning ordinances that determine what can be built on any given plot of land. Zoning is commonly noted for determining use (residential, commercial, industrial) and density (such as height restrictions) of buildings constructed. The term “upzoning” refers to when a particular zone is changed to allow more density or higher economic productivity on the same plot of land. While New York’s housing crisis has received national attention, much less attention has been given to the success of various upzoned districts in creating new housing. Per the Citizens Budget Commision: “Since 2010 10 of the city’s 59 community districts accounted for nearly half of the new residential permits, and one-third took place in five neighborhoods… that were rezoned for growth in the mid-2000s.” When changes are not made to increase supply, it can actually decrease over time: “in many other neighborhoods… the number of housing units has declined in recent years, as the combining of multiple units into single units outpaced the addition of newly built units.” New York is awash with zoning codes that could allow for greater supply. Within the city itself, 60% of residential lots fall into the “lowest density zoning categories,” and 12% only allow single family homes. The surrounding areas have similar potential: “regional counties like Westchester, Rockland, Nassau, and Suffolk have some of the lowest housing production rates in the country.” Unsurprisingly, residents of Long Island and Westchester are also the likeliest of anyone in the New York region to be rent-burdened. It’s important to note that upzoning can have a different effect when it takes place in one neighborhood than when it is spread out across the city. Concentrated upzonings are more likely to create a speculative bubble, as pent-up demand means people will be bidding over one another for development rights and land. Existing homeowners are likely to keep their homes off the market hoping to get the highest sales price possible, perpetuating the cycle. However, if we coordinated rezoning around New York specifically to create non-luxury housing, imagine what could result. One study in New York City found that “for every 10% increase in the housing stock, rents decrease 1% and sales prices also decrease within 500 feet.” This is all to say nothing of the increased tax revenue that arises from having more tenants occupy the same plot of land, which can provide additional services within the community and for the region. Reforming New York’s zoning codes to allow for growth and the expansion of housing supply by market construction is a tangible action with clear results as well as future possibilities.

The Challenge With Upzoning

Any question of upzoning inevitably raises the question of gentrification. Continual debate centers around the downsides of certain development that can displace existing residents and lessen racial diversity, as well as demolish buildings of local importance.  Upzoning has serious potential to exacerbate this widespread issue, and popular support for zoning reform will never form if people think it’ll destroy their neighborhoods. One place to start would be with areas currently zoned for single-family housing, especially detached homes. Single family homes (namely R1, R2 and R3 in the zoning code) can be replaced with slightly higher density townhouses (as seen in R4 and R5). These allow for a relatively quiet feel that blends in while having triple the housing capacity, or more. Neighborhoods stand to benefit from this density, allowing for more tax revenue and unplanned interactions for community building. Single family housing does not have to be banned in entirety (though that does have precedent in the United States)—but if people desire a secluded lifestyle, they should not expect government zoning for it near the densest major city in the country. This is not to say that we should be rezoning entire neighborhoods in the hopes to increase density. Instead, it is preferable to be precise in upzoning, but to do it across the metro area. In Minneapolis it has been found that when a few parcels of land are rezoned at a time, it can result in a higher than average rate of affordable housing to market rate housing in the area. However, when it is done in a blanket sense of entire neighborhoods, it results in a lower than average proportion. How successful the upzoning is, and whether it forces people to move out, can also depend on the income and racial composition of citizens already living in an area. This is why I say upzoning must be “coordinated.” This dialogue is not only necessary between New York City and its surrounding governments for logistical reasons, but also between neighborhoods and their government in terms of where to upzone and what the citizens think is best. Expanding some areas to be mid-rise or high-rise is also a natural part of city growth. It’s simply unrealistic to expect a city like New York to have neighborhoods that always remain the same. Low-rises and mid-rises especially can still allow for architectural expression, and there are many buildings that can be demolished without a loss of neighborhood character. What’s more, if nothing is done to address the housing crisis, displacement of individuals along class and racial lines will proceed regardless. Increases in density are far preferable to urban sprawl, forcing people into expensive car ownership and creating long commutes that are bad for health. It’s important to emphasize that zoning is not done in just one shape or fashion. For instance, it can determine the number of below-market rate units required in new developments, which can be adjusted to combat gentrification (as it recently was in a series of Seattle upzonings). Upzoning can likely either accelerate or slow housing price growth depending on how it’s done, but the possibility it can slow growth must not be ignored. For this reason continual measurement and adjustment is necessary. We must strive to balance between city growth and preserving historical character, based on good faith dialogue between vested parties. This means both accepting change of the city makeup and striving not to alienate existing residents—while accepting that compromises will have to be made. Any individual as well as the city can propose a zoning amendment in NYC. If we can find middle ground that people are satisfied with, we can increase supply and combat unaffordability.


There are no easy answers to this problem, and zoning is not a silver bullet. Factors such as public housing, regulations on housing construction, city decentralization, and shortages in materialsas well as workers must be considered parallel to zoning reform, rather than as separate issues. The types of houses being built are also important, as they should cater across axes of career progression and family size. If zoning reform is implemented it must be monitored and adjusted as needed to check if the program is working as intended, with transparent metrics of success or failure. It seems to me that low-income affordability and affordability for the middle class are not necessarily the same issue, and we might do well to find distinct approaches to these problems that still work in conjunction with each other. More research should be done on the topic, keeping in mind that it is an economic issue just as much as a political one. Consensus findings should additionally be broadcast to the public more. Factors such as the literal shortage of homes, the dangers of urban sprawl, and the success of upzoned regions in attracting new housing are not widespread knowledge. Housing one of the most dynamic workforces in the world is a formidable challenge, but solutions exist that have potential. We just need dialogue.

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