NYC Housing Fundamentals: Why Did We Need City of Yes?

A look into the key trendlines in the market that led us to City of Yes

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Editor’s Note:

I am happy to announce that I left my post at Greysteel and I have recently joined NYC-focused CRE brokerage firm Terra CRG.

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New York City Council members voted in favor of "City of Yes" For Housing Opportunity on Thursday, the biggest, or "most ambitious," zoning text amendment since 1961, according to NYC's Dept of Planning. The zoning reform aims to grease the wheels of innovation and spur new housing development. Getting buy-in for such a sweeping change was difficult, and many wondered whether Adams and his City Planning appointees would succeed. One of the most effective things that Director of City Planning Dan Garodnick did was contextualize the NYC housing landscape, highlighting how troubled the status quo was and how desperately New Yorkers needed a solution.

The Pitch

Director Dan Garodnick's Call to Action to pass City of Yes For Housing Opportunity. Source: City of Yes For Housing - Illustrated Guide

Garodnick's elevator pitch for COY is compelling for a few reasons.

1. He highlights how unique the circumstances are today in NYC. He makes the case that the current housing woes have not always been this way and that there is an urgent need to divert from the currently scheduled trajectory.

2. He tailors the pitch to be about solving society's issues. Without new housing, rents will rise significantly, displacement can happen, and housing insecurity will grow. Without change, things could grow worse and lead to segregation, homelessness, and who knows what else. Garodnick even couches his proposal as an initiative to take leverage back from landlords, demonstrating that he knows his audience.

3. He stands on the shoulders of research studies. Garodnick clarifies that the COYFO strategy comprises tactics proven to lower housing costs and help "neighborhoods thrive."

In his preamble, Garodnick offers background on the current housing crisis, and he does so in a way that makes it easier to accept that there is a problem that needs a solution. But he needs to go further in painting the picture. Those investing in, lending on, or even servicing the NYC apartment housing industry in some capacity need more background to understand what's happening and how NYC got here. In the following paragraphs, I'll use data from NYC's Housing and Vacancy Survey (NYCHVS) 2023 to tell today's story. I hope this will offer more support for why City of Yes was so desperately needed.

Static Supply

New York’s near flat rental housing supply since 1965. Source: NYCHVS 2023