LEGISLATIVE AFFAIRS: Tokyo Holds the Key to Affordable Housing
Philip Weiden | October 2016
As we all know, land use regulations in New York State make it one of the most expensive states to build and do business in. We rank high in property taxes, high in utility costs, and in several other areas, as well. Rental costs have been increasing, in part, due to Millennials choosing to rent instead of buying, unlike previous generations.
Tokyo may be where the solution lies. Yes, you heard that right. Housing and rental prices in Tokyo have remained stable throughout the years. Yes, you read that right, Tokyo. Here in the U.S. we have so many local government regulations that limit the supply of housing, subsequently forcing upward pressure on prices due to limits to building new housing.
The reason, argues Financial Times writer Robin Harding, “is that Tokyo does a better job of allowing housing supply to keep up with housing demand.” In 2014, Tokyo issued permits for 142,417 new housing units. In contrast, the entire state of California—which has three times the population of Tokyo—issued permits for only 83,657 new housing units. Little wonder that demand for housing has outstripped supply in the Bay Area where housing costs are through the roof.
The reason for Japan’s success is that policy for housing is set at the national level. People say they want affordable housing in the abstract, but then object to the project when it is proposed in “their” neighborhood. It is honestly time to start thinking about having New York State counties and possibly even the state take over local zoning laws because clearly, something is not working here.
In New York we recently had the New York City Council kill two apartment projects that contained a high number of affordable units because they felt it would “change” the character of the neighborhood. The character of neighborhoods has been changing for thousands of years and that is a good thing. Change is good. If we “preserved” everything there would be no New York City and no surrounding suburbs to speak of. The further North you go in the Hudson Valley and the further East you go on Long Island the more land you have. We need both higher density and lower density housing because there are markets for both groups of buyers. I know this is controversial in the state of New York, but this is why our economy remains stagnant over all. Not because of national policy, but because of stringent state and local land use regulations.
Another argument is that we have run out of land, which is simply not true. We have plenty of land the further north you go. We have more than 10,000 governments in the State of New York that stymie economic growth and housing affordability and this must end otherwise New York will always remain at the bottom. We should not fear change. Change is good and only change will bring growth and prosperity to the state of New York.
Editor’s Note: The opinions expressed in this column do not necessarily reflect the views of the publisher—the Hudson Gateway Association of Realtors.