The New York City Economy Tracker is a joint project between Investopedia and , using publicly available data to evaluate the economic health of the city across a variety of metri🃏cs.

For the week of June 19, 2023, we’re looking into how housing construction in New York City lags behind employment and popula🐭tion growth, and beh𝐆ind other peer cities.

NYC Housing Construction Continues to Lag Behind 🍎Employment and Populationꦰ Growth

New York City is in the middle of a housing affordability crisis, as rents have reached record highs in the recovery from the pandemic, and home prices have remained stubbornly elevated despite the Federal Reserve raising interest rates for over a y🉐ear. 

The city’s housing crunch has been a trend years in the making. According to data from the NYC Department of Planning and the NYU Furman Center, increases in housing units have lagged behind growth in employment and population from 1980 through 2021.

Employment and population shocks from the COVID-19 pandemic put the city’s population growth roughly level with the increase in housing units as of 2022. However, the recovery of the ciꦬty’s employment from the pandemic and expected populati𒆙on growth will likely highlight the three decades of underbuilding NYC has had since the early 1990s.

In order to both reverse decades of underbuilding and keep pace with employment and population gains from the COVID-19 recovery, the city will have to increase the rate of its current housing production.

NYC Housing Construction♊ Has Lagged Behind Most Peer Citie🍎s In Last Decade

Recent construction in New York City🍌 has trailed behind both faster-growing cities and other large peer cities. According to data from the U.S. Department of Housing & Urban Development, from 2010 to 2022 NYC has issued 83% fewer housing permits per capita than Austin and 81% less than Seattle. The city even trails behind Los Angeles—a place with a notoriously difficult homebu💖ilding environment—issuing 20% fewer permits in the past twelve years. 

The lack of housing construction, especially in periods of economic growth, increases pressures on housing affordability in the city and pushes residents who work in the city—and the potential tax revenue and spending on g𒉰oods and services associated with them—into municipalities outside of it. 

Affordable Housing Construction Uneven Across NYC

Since 2014, both Mayor De Blasio and now Mayor Adams have had plans to increase not only the amount of housing for New Yorkers, but also the quantity of affordable housing across the city.

However, according to data from the NYC Department of Housing Preservation and Development, only a꧂ handful of neighborhoods in t🃏he city have seen significant completion of units that are affordable to households making 120% of the  or less. 

These neighborhoods are mainly clustered in the southwest Bronx and include Croto🅺na Park East, Morrisania, and Hunts Point as well as Spring Creek-Starrett City in Brooklyn and East Harlem in Manhattan.

Many neighborhoods throughout the city have had little or no affordable housing construction since 2014, including much of outer-borough Queens, South Brooklyn, the Upper East Side, West Village, and downtown Manhattan. The completion of more affordable and mixed-income housing, especially in the more expensive areas of NYC, will alleviate pressure on the city’s housing affordability crisis and provide a broader basis for continued future economic growth for the city’s residents.