Suggestion: Offer incentives to motivate New York construction developers
In the heart of the urban jungle, New York City is taking bold steps to address its long-standing affordable housing crisis. The city, often criticized for portraying developers as stock villains, is now partnering with these same builders to create a more affordable and vibrant city.
Governor Kathy Hochul has led the charge, adopting an office-to-residential conversion incentive program and lifting caps on floor-to-area ratios, allowing for denser housing development. This move is part of the new 485x plan, adopted as part of the state budget in 2024, which seeks to encourage the development of affordable and other rental housing across the five boroughs.
The "abundance" agenda, as referred to by Ezra Klein and Derek Thomson in their book "Abundance", emphasizes more housing, growth, clean energy, and job-creating projects. This vision is gaining consensus among mayoral candidates, who largely support this approach.
The state of New York has also been proactive in moving projects forward. The General Project Plan has helped facilitate development, while the BitLicense, implemented for cryptocurrency platforms like Bullish, has opened doors for innovations in digital assets.
However, the road to affordable housing is not without challenges. Developers need a budget that produces a profit, a reliable timeline, and manageable risks to invest in a project. Substantial private investment is needed to see the progress of the "abundance" agenda.
To ensure fair practices, developers must comply with taxes, labor laws, environmental, health, and safety regulations, and pay fair wages. If we want developers to pay higher wages as part of an incentive program and achieve deep affordability, then we have to adjust the incentives accordingly.
Measures to protect affordable units from rising rents may provide short-term relief, but they will not address the long-term affordable housing crisis caused by a lack of housing supply. The city is tackling this issue head-on, upzoning areas like Gowanus to encourage growth.
New York City's commitment to the "abundance" agenda is evident in the City of Yes initiative. This approach incorporates changes to facilitate development and create a more affordable city for all. The ongoing mayoral election in New York City is a testament to the consensus on making the city more affordable, and the future looks promising for New Yorkers.
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