Will Luxury Condos Solve the Region’s Housing Affordability crisis?
The short answer is no.
Luxury homebuilding has been at an all time high in hot-market cities like New York City and San Francisco. And it’s left people behind in extreme ways.
The New York Times reports the 2010s was “a decade of tremendous change and gentrification for the boroughs beyond Manhattan, where rezoning and the pursuit of cheaper land near public transit spurred new building, much of it too expensive for local residents. At the same time, a dire need for affordable housing continues in the city, where about 79,000 people live in shelters or on the streets.”
Another New York Times report says: “…momentum is building for neighborhood groups that are pushing back against new building projects because they believe such plans offer little community benefit. And they’re winning.”
Another big question when thinking about how to build to scale in neighborhoods: Who is going to actually build the housing people need that is not high end? “There simply aren’t enough workers to build all the developments that people want to build and housing projects compete for resources with commercial and office developments,” said Sarah Karlinsky, a senior policy adviser at SPUR. “There’s just an enormous demand for scaled construction work and not enough bodies to do the job,” she said.
Another factor: “Investors, many of them from overseas, in search of higher returns after the 2008 recession looked to hard assets like real estate, and bet big on residential projects. Because credit remained tight for most New Yorkers, the most lucrative demographic was the affluent all-cash buyer, and thousands of new units — larger apartments, with better finishes and more amenities — were built to suit the demand.”
CCHO will be releasing the final part of our essay series on “Rethinking The Suburbs” next week, shedding light on the issue of a shrinking construction industry in the last decade, and exploring housing production constraints and potential strategies in the context of the post-Great Recession, post-Pandemic period.