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City Housing is Becoming More Affordable
March 21, 2018
Everyone who’s recently searched for a home in New York City understands the effects of a tight housing market: high demand and limited supply drives up prices. That has been a significant factor in the housing shortage afflicting the city, and it is why the Real Estate Board of New York has pushed aggressively for the city to build more housing for all income groups. And now, according to the latest data from the U.S. Census Bureau, there are encouraging signs that things are moving in the right direction.
Conducted every three years, the survey provides key data that provides an up-to-date report on the status of housing and construction in New York. Just a few weeks ago, we argued that a census is crucial to properly crafting public policy in New York – and now we have a concrete example of how census data helps New York build smarter.
Here in New York, survey data revealed a record amount of new housing – there are almost 3.5 million units in the city – and the third-highest vacancy rate since recording began in 1965. This combination has led to a smaller burden on New York’s renters, who now spend less per month on housing on average than the same survey three years ago. Moreover, this is coupled with a robust economy – across New York, incomes rose 11 percent while rents rose 8.2 percent.
As James Parrott, an economist at the New School, told the Wall Street Journal, “the trends are all positive and encouraging and bode well for improved rental housing affordability.”
While these benefits have been broadly felt across income levels and across the city, there are still areas of the city with lower vacancy rates than average and areas where rents have outpaced income growth – but that is a sign to do more to spread the benefits more evenly. Moreover, just a few weeks ago, we reported on the positive economic benefits brought to the Bronx as a result of increased development.
The new data emphatically demonstrates that the way out of the housing crisis is to build more affordable and market rate rental housing. Increased development means increased supply, which will ease extreme tension on the market for renters of all income levels. REBNY has long argued that this would be the case, and the census has shown that the initial returns are positive.
City and state officials deserve credit for staying focused on solutions to address the housing shortage, but more work is left to be done.
More and more people are increasingly drawn to New York City. The recent survey has shown that this does not need to cause economic tension in the housing market and exacerbate the housing crisis. Even though our population and employment has risen, so has our vacancy rate. The current levels of production that we have seen are enabling the city to absorb this population growth without driving up rents. New York’s leaders and community representatives must come together and to continue develop smart, sensible, and more robust plans to build more housing for all New Yorkers.