NYC Housing Crisis 2023: Construction Lags Behind Employment & Population Growth - June Update
Explore the latest insights on New York City's housing market challenges in 2023. Discover how housing construction is falling behind population and job growth, compare NYC’s permit issuance with peer cities, and learn about the uneven distribution of affordable housing across neighborhoods.
The New York City Economic Tracker, a collaboration between Investopedia and NY1, leverages publicly accessible data to assess the city's economic vitality across critical sectors. This June 2023 update focuses on the persistent housing shortage amid rising employment and population figures.
Housing Construction in NYC Trails Behind Employment and Population Expansion
New York City faces a mounting housing affordability crisis. Despite a post-pandemic recovery, rents have soared to unprecedented levels, and home prices remain stubbornly high even as the Federal Reserve has increased interest rates for over a year.
Data from the NYC Department of Planning and the NYU Furman Center reveal that from 1980 to 2021, housing unit growth consistently lagged behind increases in employment and population. Although the COVID-19 pandemic temporarily aligned housing increases with population changes by 2022, the ongoing recovery is expected to expose decades of insufficient housing development dating back to the early 1990s.
To address this imbalance and meet the demands of post-pandemic economic recovery, New York City must accelerate its housing production rates significantly.
NYC’s Housing Permit Issuance Falls Behind Peer Cities Over the Past Decade
Comparative data from the U.S. Department of Housing & Urban Development highlights that between 2010 and 2022, New York City issued far fewer housing permits per capita than other major cities. Specifically, NYC issued 83% fewer permits than Austin and 81% fewer than Seattle. Even compared to Los Angeles, known for its challenging homebuilding environment, New York issued 20% fewer permits during this period.
This shortfall in construction, especially during times of economic growth, exacerbates affordability issues and forces many workers and their associated economic contributions to relocate outside city limits.
Uneven Progress in Affordable Housing Across NYC Neighborhoods
Since 2014, city administrations under Mayors De Blasio and Adams have prioritized expanding affordable housing stock. However, data from the NYC Department of Housing Preservation and Development shows that only select neighborhoods have experienced meaningful completion of affordable units for households earning up to 120% of the area median income.
Notably, affordable housing developments are concentrated in southwest Bronx areas such as Crotona Park East, Morrisania, and Hunts Point, as well as Spring Creek-Starrett City in Brooklyn and East Harlem in Manhattan. Conversely, many neighborhoods—including large parts of Queens, South Brooklyn, the Upper East Side, West Village, and downtown Manhattan—have seen minimal or no affordable housing additions since 2014.
Expanding affordable and mixed-income housing in these higher-cost neighborhoods is critical to easing the city’s housing affordability crisis and fostering sustainable economic growth for all residents.
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