Residential buildings in New York City | M_Makarov / Shutterstock
In January 2025, Urban Matters, Center of New York City Affair’s weekly journal of ideas and opinion, wrapped up a wide-ranging two-part interview with noted urban policy expert Richard McGahey on the likely impact of New York City’s newly adopted “City of Yes”’” zoning package intended to jumpstart housing production. McGahey, a senior fellow with The New School’s Institute on Race, Power, and Political Economy, called the City of Yes “simultaneously a big deal and also inadequate for addressing the city’s housing supply and affordability gaps.” He also chided progressives for relying on policy “myths” that impede housing development and waste “time and energy [and] divert us from real solutions to the housing shortage.”
Urban Matters: “The greatest city in the world has just passed the greatest housing legislation in our history.” That’s how Mayor Eric Adams—rarely given to false modesty—characterized the New York City Council’s December 4th approval of his administration’s “City of Yes” zoning overhaul, intended to spur new housing development in all five boroughs.
In your opinion, just how big a deal is this? Adams also called this “the start of a new era of affordability?” Is it likely to achieve that?
Richard McGahey: With its sights set on developing 80,000 new housing units over the next 15 years, “City of Yes” is simultaneously a big deal and also inadequate for addressing the city’s housing supply and affordability gaps.
On the plus side, the City Council supported significant zoning changes that should lead to more housing construction, which in turn will help affordability through increasing supply. On the minus side, the plan was scaled back to accommodate single-family housing, cuts development options near transit sites, keeps too much parking, reduces combined commercial-residential projects, and over-regulates so-called “accessory dwelling units” (ADUs), like stand-alone backyard living quarters [sometimes called “mother-in-law” apartments].
Urban Matters: The City of Yes rezoning took some fairly small ideas—legalizing basement apartments, residential conversions of some office space, building housing above commercial storefronts, others—and bundled them into one package intended to create “a little more housing in every neighborhood.” Have we now run through these kinds of options, or are more similarly bite-sized reforms available?
McGahey: Hopefully, we will go back to the original City of Yes proposals and restore some of the anti-housing steps negotiated with the Council. Estimates are those policy changes will cut the housing units from the City of Yes by 26,000 units, almost 25 percent of the original projections. And there are other things we need that would help housing supply, focused more on speeding up project approvals while reducing delays caused by excessive procedures and reviews—steps currently built into law and practice. Adams has now also called for a “Manhattan Plan” to add another 100,000 units on the island over the next decade through rezoning.
Urban Matters: And he just gave a newly appointed City Charter Revision Commission the task of seeing how the city’s basic governing document might be tweaked to encourage or speed up housing creation.
But let’s step back for a minute: With people giving up on New York because of housing costs, is what we have here still just a matter of thinking too small?
Take the City of Yes goal of 80,000 new housing units in the next 15 years—and then top that up with, as you just said, as much as another 100,000 Manhattan units. The Department of City Planning has a bar chart showing New York City created nearly four times that much in the 1950s and 60s—the era that saw massive public housing investments, along with Rochdale Village in Queens, Co-op City in the Bronx, and other sizeable middle-income developments that were subsidized by government big-time. Now we use zoning incentives to coax more housing from private developers. Is that good enough to get us what we need?
McGahey: The positive steps in City of Yes, welcome as they are, are not sufficient to address our long-term housing shortage. Because we failed to build enough housing for many years, we are hundreds of thousands of units below where we should be. The most recent apartment vacancy rate was 1.4 percent, not even enough to account for frictional movement [the natural, expected turnover rate in a healthy housing market] by existing renters.
We should be open to all ways of increasing housing supply, but private markets are essential for addressing the problem. City and State government are not fiscally able to make massive public housing investments. NYCHA’s [the New York City Housing Authority’s] budget and management track record does not inspire confidence in long-term operation of public housing. And the Trump administration is likely to reduce the nation’s already inadequate aid to cities. So, allowing some carefully designed and monitored incentives to private developers for creating new units, both market-rate and affordable, must be a significant part of the supply equation.
Urban Matters: Writing in Forbes magazine last month, you said that while passing Mayor Eric Adams’s “City of Yes” housing program is “a promising sign that many progressive politicians now recognize the need to increase housing supply,” pro-development momentum needs to be kept up. What might be the next steps in making that happen?
Richard McGahey: I worry that many progressives still cling to myths about housing (I wrote about this recently in Forbes), and focusing on those myths will slow or block positive momentum for new construction. For example, I was sorry to see Governor Kathy Hochul come out against private equity investments and use of rental algorithms in housing. While I’m no fan of either trend, they simply aren’t significant reasons for our housing problem, and wasting time and energy on such issues can divert us from real solutions to the housing shortage.
We need progressive politicians who can thread a very difficult needle: recognizing the need for private housing investment and avoiding excessive regulation while concentrating on affordability, in the face of some misguided left arguments that regulating housing is the central solution for the affordability crisis.
Brad Lander [now the New York City comptroller and then a member of the City Council] and others’ work on Brooklyn’s [2021] Gowanus rezoning and neighborhood plan, which had extensive community involvement resulting in significant pro-housing policy that also should increase affordability, is a good example of what we need.
Urban Matters: Back in 2023, talking about your newly published book Unequal Cities, you said that, “New York’s progressives need to look to Los Angeles, where a ‘triangle’ of unions and developers, communities of color, and environmentalists worked together for progressive goals.” Is that what happened to get City of Yes passed? Do you see such a coalition influencing this year’s New York City election outcomes?
McGahey: I don’t think the Los Angeles dynamic was reproduced here, although the Gowanus rezoning process has some parallels, with its continuous negotiations and communication and meaningful community benefit agreements. Rather, New York’s housing crisis just can’t be denied, and the Mayor and the Council engaged in some tough negotiations to achieve the wins in “City of Yes.”
The Los Angeles coalitions in fact are being shaken by their housing crisis (which preceded the recent horrific fires that will just increase the housing problem there). Mayor Karen Bass and many LA politicians are taking, at best, baby steps on addressing their housing crisis, locking in too much single-family zoning and doing very little to aggressively increase supply. A major danger in LA—and New York—is some progressives’ desire to address housing primarily through regulation and tenant rights, while downplaying or rejecting increased supply. That could be an Achilles heel for housing, and for progressive coalitions.
Urban Matters: Also on the subject of political will: A few weeks ago, a column by New York Times editorial writer Binyamin Applebaum argued that Donald Trump won last November, in part, because voters saw homelessness and the housing affordability crisis in cities like New York as proof that Democrats just aren’t up to the job of governing. Do Democrats have to own that judgment?
McGahey: In my view, Democrats have gone too far in creating excessive, uncoordinated layers of regulation, project review, and “community” input which often is dominated by wealthier single-family homeowners. In contrast, organizations like Open New York combine support for tenants with aggressive steps to increase housing supply, and that’s the kind of work Democrats (and all of us) need going forward. The solution isn’t unrestrained housing development. Without reforming single-family zoning and overcoming suburban economic and racial resistance to denser affordable housing, low-density suburban sprawl just contributes to our climate problem and unfairly burdens cities alone to solve regional housing problems.
Urban Matters: Final question. Just last January, Alex Schwartz, who chairs the graduate program in public and urban policy at The New School’s Milano School, told Urban Matters: “People in poverty simply cannot afford the basic cost of operating a housing unit. If rents only covered insurance, taxes, utilities, management, repairs, and other essential costs, and generated zero profit for the owner, they would still be unaffordable.” What does City of Yes, and increasing housing supply, do to reduce that problem?
McGahey: Alex, one of our best housing scholars and policy experts, is right. City of Yes does not primarily address the massive problem of economic inequality—in New York and America—which also has deep racial and ethnic bias built into it. Even with increased housing supply, which I believe (and research shows) will help slow and even reduce housing costs, too many people don’t have enough income for a decent standard of living.
The National True Cost of Living Coalition’s recent report documents the scale of the problem, and New York’s 2022 approval of City Charter amendments to document our true cost of living will give us a sobering picture of the city’s gap. But addressing income inequality requires a multifaceted strategy and will ultimately require a national movement. Progressives shouldn’t block good housing policy—like City of Yes, with all its shortcomings, or other efforts to increase housing supply—because it doesn’t solve the larger problem of America’s deeply rooted, multidimensional, racially biased economic inequality. More housing supply, including market-rate, is good for housing affordability. Progressives should support City of Yes and other efforts to increase New York’s housing supply across the board.
This conversation was originally published in two parts, on January 22 and January 29, 2025, in Urban Matters.
