ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
search
Close Nav

New York’s Housing Refugees

back to top
eye on the news

New York’s Housing Refugees

The affordability crisis is a burden for residents and a drag on growth. February 2, 2021
Economy, finance, and budgets
New York

It’s common in Manhattan these days to hear people swear that they will be heading for Florida soon. If the data are any indication, it’s not all New York bluster: according to the Census Bureau, the Empire State lost 126,000 residents between July 2019 and July 2020, and the Sunshine State picked up 241,000. Out West, it’s a similar story, with California shrinking by 70,000 residents and Texas growing by 374,000. The pandemic has kicked America’s Great Reshuffle into overdrive.

Excessive taxation and overregulation are certainly part of what’s driving these trends, but there’s more to it. Plenty of people still want to live in cities like New York City and Los Angeles, for all their problems. The trouble is that New York and California’s cities have refused to build enough housing to accommodate all this demand over the past few decades, forcing millions to move elsewhere for reasonably priced accommodations.

When migrants to states like Texas and Florida are asked why they made the move, they consistently cite two factors: jobs and housing affordability. Consider the rent on a median two-bedroom apartment in New York City and Miami: according to data from Renthop, simply moving down I-95 can save you 40 percent on rent alone. The gap is even wider for a move to less-glamorous Charlotte, North Carolina, where an émigré would save over 60 percent on rent. Wages vary across the three metropolitan areas, but not by that much.

Jobs and housing affordability might seem like separate issues, but mounting evidence suggests that they are closely connected. Consider Toyota: in 2015, the auto manufacturer moved its North American headquarters from Los Angeles to Dallas, taking more than 3,000 jobs with it. The reason? At the time, housing in Dallas was three times cheaper than in Los Angeles, making employee recruitment in the City of Angels increasingly difficult. Financial firms making the jump from Wall Street to Miami this year offered a similar argument: Florida’s lower taxes certainly don’t hurt, but the real selling point is Florida’s low cost of living. Setting up shop in a place where employees can afford a place to live is good for business.

Why are housing costs so high in America’s struggling superstar cities? Normally, high housing costs would spark a local building boom, but in cities like Los Angeles and New York the opposite is happening. Since 2010, Orlando, Florida, has built over three times as much new housing on a per-capita basis as New York. States like Florida are affordable because of an abundant supply of new housing, and thanks to development-friendly regulatory environments, they’re likely to stay that way.

For New York State, the problem is the state’s antagonistic approach to new housing construction—particularly in New York City and its infamously construction-resistant suburbs. A regulatory witch’s brew of exclusionary zoning, endless public process, and excessive preservation have made it next to impossible to build new housing at scale. New York developers built less in the recovery boom of the 2010s than in the depressed 1930s. You don’t need to reread Adam Smith to know what happens when demand booms and supply is stagnates: prices go up.

Will pandemic-weary New Yorkers continue to flee in droves? The anti-growth forces increasingly calling the shots in local politics certainly hope so. But we shouldn’t count on it—or hope for it. Ambitious Americans will always be drawn to big cities. But if city leaders don’t build enough new housing to accommodate growth, the people who keep the city running will bear the burden of rising prices.

Photo by Michael M. Santiago/Getty Images

Up Next
eye on the news

The Growth Machine West of the Hudson

While New York City struggles to produce limited new housing, Jersey City is booming. Nolan Gray December 15, 2020 New York, Economy, finance, and budgets

Contact

Send a question or comment using the form below. This message may be routed through support staff.

Saved!
Close