By Dipro Bhowmik — Jul 26, 2024

The purpose of a system is what it does

Summer in New York is moving season, when residents learn how much their rent is going to increase this year!!!

Summer in New York is when everyone’s out all the time and I’m reminded that fruits are seasonal.

The afternoon air is thick and sweet with the smell of hot pavements and garbage.

Summer in New York is also moving season, when residents learn how much their rent is going to increase this year!!!

My brother-in-law says there’s a housing shortage in New York City. His luxury rental in downtown Brooklyn is asking for more money next year – over $4000 per month.

He dreams of less rent for more space. He says there are new buildings in Mott Haven, in the South Bronx, where he could save a thousand dollars a month and get more space. He hears Mott Haven is an up and coming neighborhood. Still, he doesn’t want to move there – he’d prefer to live in this neighborhood, even if he’s paying an arm and a leg for it.

My brother-in-law knows he’s going to be priced out of his neighborhood soon. I know I am too.

I can’t judge him for his rent; I pay about the same. I’ve tried to get by living in older apartments, but even those are super expensive these days.

When the rent does increase, I’m going to move out. Someone will take my place almost instantly.

That’s the familiar pattern in New York – as rents go up, they become affordable for different people. Working class neighborhoods become middle class neighborhoods. Now lower-middle class neighborhoods are becoming upper-middle class neighborhoods. Low-ranking tech workers & bankers are being replaced by their bosses & more ambitious colleagues.

I can’t help but notice there’s been criticism about gentrification for decades, but it became a housing crisis when the tech workers like us started getting priced out.

The median household income in New York is 75 thousand dollars. $74,694 to be exact.

Don‘t let the $4000 rentals and finance bros fool you. Half the city lives on half the income of a fresh college grad at JP Morgan Chase.

For much of New York, $4000 a month is not rent, it’s your income.

When I moved to New York I stayed in a swank 3 bedroom, newly-renovated apartment in Bushwick – with 10 housemates.

I slept on one of 2 bunk beds in my room, and paid $600 in rent. We were all international, new residents or in the city for a summer. Every month half my housemates would move out and be replaced.

I had the means to move out. At the end of the summer, my parents helped me cover the security deposit and upfront rent for another apartment.

About 8% of the city lives in crowded conditions like these. 23% of households with children are crowded.

The crowding numbers tell us that, despite the towers and the heliports, working people still live in New York. Whether it’s the community you have or proximity to a job, you make it work.

Housing shortages happen when there’s more demand for housing than supply.

But everyone wants to live in New York, so how could there ever NOT be a shortage?

Eric Adams has lots of plans to fill the shortage.

He’ll build accessory dwelling units – tinyhomes in Staten Island backyards – to fill the shortage. He’ll rezone commercial districts so skyscrapers can be built – we’ll have so much housing, it will fill the skies.

He says this will help working people afford to live in New York, but it won’t be enough.

Developers consistently use rezoned land to develop luxury towers, the most profitable rental building. Even if these towers are in Long Island, they’ll be priced for those same middle-class renters who got priced out of downtown Brooklyn. The folks living 3 people to 1 bedroom will continue to do so.

The developers of these luxury towers tell us they are a solution to the housing crisis, a public-private partnership, a marvel of government ingenuity.

You see, each of these towers have a portion dedicated to the housing lottery for low-income renters. The housing lottery will save the day.

So I looked up the housing lottery, which published a summary report recently. In 2021, the housing lottery only secured 1184 new leases for the people of New York, from over 1 million applications.

One in eight New Yorkers applied for the housing lottery, but the winners would fit in a single subway train.

The government of New York is relying on private developers to build enough units to house the whole of New York.

Unfortunately, developers are not in the business of making housing. They’re in the business of making money.

The typical development company moves large amounts of money to make buildings. These buildings are then sold or rented out to get that large amount of money back – plus a large chunk of profit.

The real goal is the profit, and creating housing is just a side-effect. If a building is made but it’s not profitable, that’s a failure.

And they’ll do anything to keep things profitable – such as building luxury apartments no one really needs, working together to set prices artificially high, even straight up fraud.

New buildings will come up, new people will move in, and the crisis will continue.