Housing Crunch Hurts NYC Biz, Says Comptroller
By Alyssa Katz

For the one out of four New Yorkers who spend more than half their income on rent or mortgage bills, the city’s skyrocketing housing prices are no surprise. But a new report from state Comptroller H. Carl McCall finds that the real-estate industry’s recent windfall doesn’t just hurt renters—it is also toxic to employers, businesses, and the entire city’s economic prospects.

In “No Room for Growth: Affordable Housing and Economic Development in New York City,” the comptroller’s researchers list enough obnoxious consequences of high-priced housing to fill a $1,400 alcove studio. By doing almost nothing to make housing more affordable for middle-income tenants, they say, New York City is undermining its diverse professional labor force, while driving away companies interested in doing business here.

Although New York has priceless access to global markets and substantial local business opportunities, more than one-third of the employers surveyed reported that hopped-up housing prices made it difficult to attract and retain employees. Almost 80% agreed that these costs made it harder for new businesses to start up, and more than 86% believed it hurt New York’s ability to attract firms from outside the city.

Meanwhile, the report finds, would-be workers are driven out of town by the affordable-housing drought. Subsidy programs like “80-20,” in which developers of luxury buildings set aside 20% of their apartments for low-income tenants, provide housing for the high and low ends of the market but don’t help the middle. At the same time, most of the 125,000 low-cost apartments built decades ago under the state Mitchell-Lama program are now poised to go market-rate.

The report suggests expanding the city’s New Housing Opportunity Program, which provides a small mortgage subsidy to developers as an incentive to build apartments for moderate-income residents, and using contributions from luxury-housing developers to create an affordable-housing trust fund.

Reprinted with permission from City Limits Weekly.