De Blasio, deregulator: Why his housing plan deserves support

Based on recent symbolic votes among borough community boards, it seems there is a lot of discontent with New York City Mayor Bill de Blasio’s signature affordable housing plan.

Activists across the city are pushing against the plan’s modest legalization of increased density, while conservatives worry about trading additional density for even more subsidized housing units.

Bluster aside, and as hard as it may be to believe, the mayor’s plan includes key proposals to permit more construction of all kinds through deregulation. No matter where you fall on regarding the mayor’s housing plan, these elements deserve to be implemented.

De Blasio, and especially his top housing experts Carl Weisbrod and Vicki Been, have the potential to be remembered as New York City’s greatest deregulators of density, parking and minimum unit size. For architecture buffs and urbanists, the Zoning for Quality and Affordability plan frees up ground-floor ceiling heights and encourages variety in façade design to avoid the uglier flat, squat condo buildings lacking active ground-floor uses that contemporary rules have forced upon architects, most infamously on Brooklyn’s 4th Avenue.

Restrictions on the number of studio and 1-bedroom apartments for senior housing and for singles in general would also be relaxed in certain zoning categories, and parking will not be required for affordable units. Although experts like UCLA’s Donald Shoup recommend removing parking mandates entirely, the mayor’s plan takes a politically realistic, incremental step toward better housing policy.

Most notably, de Blasio is the first New York City mayor to hold himself accountable to a target for approving market-rate units – indeed, more than Bloomberg himself – and that’s a good thing. Bloomberg approved construction of roughly 17,000 total units annually from 2000 to 2010: As noted by Stephen Smith at Next City, that’s roughly as slow as the frozen luxury museum that is modern Paris. De Blasio aspires to permit an average of 24,000 total units a year, of which some 16,000 would be market-rate units. While still slower than the 1960s-level housing boom necessary to slow the rise of New York-area housing prices, it is progress nonetheless.

The newly legal floor area permitted by the plan would be valuable: The transferable right to build an additional square foot of space sells for $400-plus in pricey parts of Manhattan. Consider this: The median city housing unit, across all five boroughs, is worth roughly $600,000 according to Zillow – in Manhattan it’s $1.38 million per unit. If de Blasio’s moderate deregulations permit 7,000 more median-value city units per year than Bloomberg did, that’s roughly $4.2 billion in additional value created every year simply by saying it is no longer unlawful to build some additional useful space near public transit for people to live and work in America’s greatest city.

More people than ever value the high wages and quality of life in New York, but when construction of additional floor area is illegal, those desires simply translate into higher prices for existing space. As the rising tide of housing demand meets a zoning-bound housing supply, price hikes and displacement are the inevitable result. This is not your typical pro-market argument; even Paul Krugman, certainly no lion of deregulation, recently wrote about the dangerous price consequences of tight land-use regulations.

The bottom line is that no matter how we utilize the bounty of value that denser rezoning unlocks, it’s better for our city to, collectively, be billions of dollars richer every year under the mayor’s proposal than for us to, well ... not be billions of dollars richer. This isn’t billions more in jewelry or yachts or some idle treasure; it’s a way of describing the enormous value of thousands of new housing units that the mayor wants to allow people from different walks of life in every borough to live in.

The plan is not without detractors. Some believe trading increased density for more subsidized units is a bad deal, arguing that a sale of development rights to fund, say, the MTA capital plan would make more economic sense. Others will quibble over parking deregulation or one of many other best practice reforms. And others yet will be opposed to any form of added density, no matter how necessary or modest the plan may be.

But the mayor still deserves overall support for his proposals to moderately free up the housing market and improve the visual and streetscape quality of new architecture. They’re not perfect, but they will enable people to stay in their neighborhoods while accommodating necessary growth.

Alex Armlovich is a policy analyst at the Manhattan Institute.