New York’s Self-Inflicted Housing Crunch
People who live in New York City know that its frenetic pace can induce anxiety. In part, that angst stems from living in a highly congested city brimming with energy. But there’s also the anxiety from New York’s crazy-quilt pattern of land use regulation, which a New York Times editorial recently labeled “High-Rise Anxiety.” The unease stems from the many overlapping restrictions both on new construction and the utilization of existing facilities. These regulations have created a two-tier system in which some prosper handsomely while others scramble to make ends meet.
The current housing crunch in New York, and in other cities like San Francisco, is attributable to the complex set of prohibitions and subsidies that shape these markets. Under the modern administrative law system, private property rights are of little consequence when a developer is trying to build. What matters ultimately is that all of the relevant “stakeholders” have a right to participate in an endless negotiation process before anything gets done. The de facto presumption is against changes in both new and existing housing markets. The building permit is the unit of political currency, and each requires enormous inside connections, patience, and luck to obtain. It can take developers many years to obtain their precious permits, if they get them at all.