Checkpoint: Social Housing Could Revive New York

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In February, a bill that would create the Social Housing Development Authority, an agency that would act as a sort of public developer that builds, acquires, and maintains housing was proposed in both the state Senate and Assembly and the program could be a solution to one of New York’s biggest challenges.

The proposal stands in stark contrast to the current model that New York, and New York City in particular, has deployed in an attempt to spur the building of affordable housing and, tax incentives. Unlike with tax incentives, the new agency would not rely on the benevolence of profit-seeking developers to create affordable housing.

It would also serve to subsidize housing across a broad swath of the income spectrum with the current proposal requiring at least a quarter of homes held in trust by the authority to be accessible to poor and no-income households.

According to proponents of the measure at Housing Justice For All, a $5 billion investment could empower the nascent authority to build or acquire some 26,000 new homes. The benefits of such a program should be obvious.

Firstly, housing in New York State is by far the biggest challenge facing the state and it’s not just limited to New York City. The cost of housing in the five boroughs rightly shock renters and buyers alike, housing unaffordability is a blight that afflicts the entire state.

In the state’s second-largest city, Buffalo, the average rent is $1,285, a sum the site says will buy about 789 square feet every month. While this might sound like a bargain to those used to New York City rents, the average income in Buffalo is under $25,000 per adult per year according to the Census Bureau and the average household income is below $40,000 a year.

The situation is similar in the state’s third-largest city, Rochester, where the average rent is just under $1,400 a month for about 900 square feet and the average income per household is just over $37,000. In the state’s capital, Albany, the average rent is $1,615 and the average income per household and the average income is just $27,000 per adult.

What this means across New York is not only that workers are spending more of their paycheck on housing than their parents or grandparents did, but that people are limited in their life choices. Take the statistically average family in Buffalo as an example. To live in a nearly 800-square-foot apartment, the average household is spending $15,420 of their roughly $40,000 a year in income on rent alone.

In other words, that family is spending nearly 50 percent of their pre-tax housing for the privilege of living in a 789-square-foot apartment year-round and paying off their landlord’s mortgage. Other necessities of life are not so expensive. Very few people are spending over $1,000 on electricity, heat or water or even all three of those combined. Even with price gouging at the grocery store a family of four is probably still spending more on rent than it spends on food.

Often in the context of housing, we use the term affordability to mean that a household is spending less than 33 percent of its pretax income on housing. Even this is too much. While many people can stomach the cost, that doesn’t make it right to strive to have every household in the state spend a third of their income on housing, especially for those who don’t own their homes. This burden on New York has downstream effects from taking money out of circulation in the local economies to making the everyday existence of people in this state worse and more burdened by financial insecurity.

The sponsor of the state Assembly version of the bill, Emily Gallagher, who represents a portion of North Brooklyn, explained the situation in her district.

“What we’ve condemned people to here in New York is if you aren’t a top earner, you don’t get to have very much dignity or pleasure, because you are giving 60 percent of your income to your housing costs,” Gallagher said. “That means you can barely make a nice meal for yourself, you can barely keep the lights on. That’s not acceptable.”

The bill is also a winner. New Yorkers are crying out for their state to do something about the cost of housing and there is perhaps no more direct action available than social housing.

 A Marist survey from earlier this year found that 73 percent of adults in New York State say that housing affordability is a major issue, and this statistic is even higher among renters, 83 percent. While the survey did not ask whether respondents would support a social housing program, 72 percent of Democrats, 69 percent of non-enrolled voters, and 63 percent of Republicans said that the state needed to do more to make housing more affordable in the state.

Beyond the potential popularity of direct government action to lower the cost of housing, doing so could help solve two of New York State’s bigger long-term problems, homelessness and outmigration.

Homelessness is by far the more important of these two issues. While conservatives like to blame homelessness on drug addiction or mental illness --- two topics which they are happy to also leave unaddressed --- the core of the issue is the cost of housing.

According to the Coalition for the Homeless, the number of people sleeping in shelters each night in New York City reached a record 92,879 in December of 2023, 33,000 of whom were children. In just the last decade that number has nearly doubled, rising from about 50,000 people sleeping in shelters in 2014. The fact that this grim new record corresponds with a year where the average rent for a studio apartment in New York broke $3,000 a month is no coincidence.

The cost of housing is also incentivizing people to leave the state. Despite being the beating heart of the American economy, New York State is shrinking faster than any other state in the union. In the 2020 census, New York posted a net loss of 884,000 residents. Granted some of the outmigration was the result of the Covid pandemic, which saw many New Yorkers leave the city and state. However, the pandemic was not responsible for all or even most of the outmigration over the past decade.

Put yourself in the shoes of someone looking to make things affordable for themselves in the long term, especially someone in the era of remote work. Why stay in a state where the cost of housing will forever keep housing and financial security out of reach when you could move to a region with lower housing costs allowing you to invest more of your income in yourself and your family.

Perhaps the best part about the plan before the state legislature is that we already know that it works. Similar models have been deployed in other cities, most notably in Vienna. In the Austrian capital, the social housing developer is the landlord for about 220,000 units, which house about a quarter of the city’s population.

Ultimately, it’s long past time for the state to take action to try something new and direct to solve the affordability crisis crescendoing across New York State. If New York State can successfully put a dent in the housing crisis here it can be a model for the rest of America.