Analyzing the NYC Housing Crisis: City of Yes for Housing Opportunity

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The affordable housing crisis is one of the most pervasive and devastating challenges facing the city. Despite several attempts from mayoral administrations to address this issue with inclusionary housing programs, these efforts have fallen short of securing affordable homes for most New Yorkers, especially those of low income. Mayor Eric Adams’ City of Yes for Housing Opportunity (COYHO) amendment aims to stimulate housing production by rezoning underutilized commercial and industrial spaces. However, in its current form, COYHO risks repeating failures of the policies that have preceded it, sacrificing affordable housing goals for development incentives. To achieve equitable housing opportunities for all, Mayor Adams—and subsequently Mayor-elect Zohran Mamdani—must prioritize affordable housing in high-income neighborhoods, modify the affordable unit requirements in inclusionary developments, obtain the ability to grant tax exemptions, and significantly reinvest in the city’s public housing system. 

Over the past decade, rents have increased 11% in New York City while income levels stagnated, leaving nearly 40% of households cost-burdened. Consequently, nearly half a million of the city’s most vulnerable New Yorkers—49.8% of whom live below the federal poverty line—rely on public housing administered by the NYC Housing Authority (NYCHA). In addition to being an issue of supply, the housing crisis is also an issue of allocation; according to the Citizens Budget Commission, more than 2 million NYC households are considered undercrowded, with more space than needed for their household size, yet the rate of severe overcrowding is more than twice the national average. 

The city’s inclusionary housing programs, seeking to remediate these issues, have largely failed to achieve financial feasibility without government subsidies, falling short of their purpose to create privately funded affordable housing. Programs financed from the private sector are imperative because they do not rely on limited public funds and can, in principle, scale more rapidly and sustainably than subsidy-dependent construction. Mayor Bloomberg’s Voluntary Inclusionary Housing (VIH) Program and Mayor de Blasio’s spin-off, Mandatory Inclusionary Housing (MIH), are the two programs through which inclusionary housing has been implemented in NYC. Both programs function by granting developers tax exemptions or floor-area bonuses if they agree to sell or rent a certain number of apartments at a fraction of the area median income (AMI). VIH was first implemented in the 1970s as an optional floor-area bonus; however, this program was unsuccessful until the 1980s, when it was expanded to R10 districts such as Park Avenue, home to the city’s densest and most affluent neighborhoods. In 2003, Mayor Bloomberg formalized the program so that developers choosing to opt in would receive a 33% floor-area bonus in exchange for reserving 20% of floor area for permanent affordable housing. By 2013, toward the end of the Bloomberg administration, 2,888 affordable units had been produced over less than ten years. Criticizing Bloomberg’s VIH output as “unacceptably low,” de Blasio implemented MIH, requiring developers to meet affordable unit requirements in eligible zones through one of three more aggressive options.  

However, MIH ultimately fell short of its goal of increasing the proportion of affordable units above VIH’s 20% requirement and lowering income thresholds beneath 80% AMI. Over five years, MIH produced 2,065 units while the city spent about $1.5 billion in additional subsidies. This effectively negated the program’s contribution to affordable housing—as a mechanism to “capture” the economic benefits gained from rezoning—because the city’s expenditures offset capital costs incurred by developers in constructing affordable units. As Eric Kober, the former director of housing and infrastructure planning at the NYC Department of City Planning, pointed out, MIH has an inherently flawed design since “no development subject to [its] requirements [can] achieve financial feasibility without [additional] tax exemptions.”  

Although COYHO, presented as a solution to MIH, may inadvertently create more affordable housing opportunities by rezoning underutilized spaces, it fails to explicitly prioritize inclusionary housing by addressing the issues crippling VIH and MIH. The Adams administration has claimed that even without mandating the construction of affordable housing, an influx of market-rate units will reduce housing prices through a trickle-down effect called filtering. However, past attempts to increase housing supply have shown that doing so only induces more demand. Mayor Bloomberg’s Planning Commissioner, Amanda Burden, even admitted as much: “I had believed that if we kept building and increasing our housing supply, prices would go down. We had, every year, almost 30,000 permits for housing...and the price of housing didn’t go down at all.” Instead, by incentivizing new developments without affordable housing mandates, COYHO could gentrify neighborhoods and not actually lower housing prices for people who need it the most. 

In order to guarantee more affordable housing, COYHO must be amended so that future inclusive rezoning occurs primarily in wealthy areas with greater affordability requirements. In a report analyzing MIH, Kober concluded that new developments should be prioritized in strong housing-market neighborhoods for the program to achieve financial feasibility and effectively increase the stock of affordable housing. Such neighborhoods include Manhattan Community Districts 1–8; Brooklyn 1, 2, and 6; and Queens 1 and 2—districts where MIH has proven to be economically feasible. In tandem, low-land-value areas like central Queens and south Brooklyn should be zoned more conservatively to limit the unsustainable subsidization supporting developments in such areas. By focusing MIH in strong market areas, the minimum AMI requirements for affordable units can be decreased or the required percentage of affordable units can be increased so that existing residents aren’t priced out. 

While revamping the inclusionary housing programs, the Mayor must also seek the authority to grant tax exemptions to developers directly and set strict guidelines so that necessary tax revenue is not threatened. From 1971 to when it expired in June of 2022, the Section 421-a bill made the city rely on the state legislature’s willingness to create tax exemptions for developments. According to Kober, “state control of 421a had led repeatedly to costly and ineffective program designs.” Currently, New York State Governor Kathy Hochul is drafting a replacement proposal, Section 485-x. The mayor must work with Governor Hochul and gain the authority to grant tax exemptions in the new bill, streamlining the bureaucratic processes the city currently faces. That way, as Kober states, “the mayor and the City Council [will be] better positioned to determine how much city tax revenue should be given away, to whom, and under what conditions.”  

The city must also establish specific investment goals for NYCHA. Under federal law, all public housing authorities are required to employ residents on construction and maintenance projects. Moreover, NYCHA specifies that 30 percent of new hires should be residents “to the greatest extent feasible.” Despite this, just 43 percent of working-age NYCHA residents participate in the labor force compared to 66 percent of all New Yorkers. Successful programs linking public housing residents to jobs created by economic development projects pose a potential solution. For example, upon the opening of a Fairway Market in Red Hook, Brooklyn, the city-sponsored Targeted Hiring and Workforce Development Program promoted Fairway job opportunities to nearby NYCHA residents and ended up employing 1,200 locals. The Pratt Center for Community Development suggests that the city should extend this program, connecting public housing residents to city-sponsored economic development initiatives across the city, which would significantly alleviate some of the largest barriers public housing residents face when attempting to participate in the labor force. 

Finally, the city should work with New York State to petition the federal government for additional Low-Income Housing Tax Credits (LIHTC). LIHTCs are the largest producers of affordable housing in the U.S., with over 3 million units created since their inception, including nearly 160,000 units in New York City between 2010 and 2020. LIHTCs work by granting investors in affordable housing developments tax breaks for 10 years. This program is administered by the Internal Revenue Service, which disburses credits to states on a per-capita basis. According to the NY State Comptroller Thomas DiNapoli, additional funding for these incentives is central to the State’s ability to continue to produce affordable rental units in NYC.

In his 2021 campaign, Mayor Adams painted an inspiring vision for the future of affordable housing. Over the past few months, Mayor-elect Mamdani has reverberated this promise. To fulfill this vision, COYHO must be more than a zoning reform; it must be a moral commitment to equity, prioritizing the needs of low-income New Yorkers. By restructuring MIH policy, empowering public housing residents, and gaining the autonomy to grant tax exemptions, the city can create a more equitable housing landscape. This will require proposing an amendment to COYHO through the Uniform Land Use Review Procedure, rallying support from local community boards, borough presidents, the City Planning Commission, and eventually the City Council to get approval. With necessary revision, COYHO has the potential to enact substantive change to affordable housing citywide.

Ethan Seiz is a sophomore concentrating in Computer Science. He is a staff writer for the Brown Undergraduate Law Review and can be contacted at ethan_seiz@brown.edu. 

Navyaa Jain is a junior concentrating in Computer Science - Economics. She is a staff editor for the Brown Undergraduate Law Review and can be contacted at navyaa_jain@brown.edu 

Aidan Fogarty is a sophomore concentrating in International and Public Affairs. He is a staff editor for the Brown Undergraduate Law Review and can be contacted at aidan_fogarty@brown.edu.