Priced Out
A multi-part series on the housing crisis in the region in The Highlands Current
My second Wide Angle column has been published in the Highlands Current: Priced Out.
Here’s the core issue:
There is a housing crisis in the U.S., a tangled tale of many parts. At the highest level, we are short as many as 5 million “units” (i.e., homes, apartments, condos, etc.). This is especially acute at the lower end of the market. It has been caused, principally, by developers following the money — they build newer, larger homes to sell to wealthier and older people. The National Association of Realtors says first-time buyers account for the smallest share of the market in the past 40 years.
As a result, no state, including New York, has enough “affordable” housing, which is defined roughly as costing no more than about a third of a person’s income for rent or a mortgage payment. At the same time, restrictive zoning in the most populous and popular regions, such as the New York City metro area, has blocked or slowed the development of lower-priced rentals.
By one estimate, New York state will need 500,000 to 1.2 million housing units over the next 10 years to meet demand. Gov. Kathy Hochul has proposed preserving or building 100,000 units over the next five years at a cost of $25 billion, which is inadequate by a factor of 10.
Gov. Hochul is open with the degree of the shortfall, but that is a small consolation.
The three factors:
Not enough housing units are being built, especially affordable, smaller units and starter homes.
We are in the periphery of New York City, a ‘superstar’ city, where the rise of remote work has led thousands of highly-paid professionals to migrate to the edge of ‘the Donut’ as economists call it. This new demand has pushed prices to historical highs and is pushing out those who can’t afford prices.
More older residents live in larger homes than they want, and more are living alone. If they sell, they find they can’t buy back in because of 1 and 2.
In the next few columns, I detail some ways out of this trap.