Thursday, March 27, 2008

Affordabillty Crisis

In this morning's NY Daily News, Errol Louis focuses on the crisis of affordable housing in New York City: "Our city's housing crisis - the shortage of homes and apartments that average New Yorkers can afford to buy or rent without shelling out 40% or 50% of their income - is going to get a lot worse before it gets better."

The crisis devolves from the city's decontrol rules. As Louis points out: "Generally speaking, two rules, vacancy decontrol and luxury decontrol, allow landlords to boost rents when an apartment is vacated or when rents rise to $2,000 a month - a system that has caused more than 200,000 apartments to drop out of the stabilization system over the past decade." Which means that as real estate values rise average folks are priced out of certain neighborhoods.

Which is precisely what we've been talking about in regards to the city's disappearing supermarkets-neighborhood stores priced out, just like residents, as rising rents make space unaffordable. Which means that the city's supermarket task force can't be operating in a policy vacuum: affordability of housing and vital retail services must be tackled in tandem.

The crisis here also means that the labor push for what's known as prevailing wages must be tempered by the understanding that the goal of affordability takes precedent over hard and fast wage scales that just might put the affordability of housing and moderately priced retail services at risk. Balance and common sense are going to be needed to devise good public policy in this area.