Manhattan offers a prime example. In the decade of recovery since the financial crisis, the area around Central Park South has become a veritable forest of super-tall residential towers, each well above 1,000 feet. The benefit of all that housing production ought to be lower prices for New York residents, right? Well, no: As of late February, the median home price in the city was $681,000, up more than 50 percent from 2012. And New York’s new luxury towers are notorious for being empty, owned by absentee millionaires and billionaires looking for an investment rather than a home. Midtown Manhattan’s housing-vacancy rate is now 20 percent, up from 16 percent for the period between 2006 and 2010.
Just as building a new highway encourages people to drive more, new condo towers induce demand from overseas buyers that otherwise wouldn’t have existed. Few international buyers looking to invest in a rarely occupied multimillion-dollar pied-à-terre would go through the arduous process of being approved by the board of an old-fashioned New York cooperative.
While the condo-building boom in San Francisco is less frantic, longtime residents aren’t crazy for being skeptical of the idea that more homes means lower home prices. New construction can bring amenities that make a neighborhood more attractive to a different type of buyer; a new Whole Foods makes the rental apartment next door more desirable and therefore more expensive.
Cities should build, but building does require planning.
First, planners need to recognize the value of low-scale density as well as high-scale. After all, low-scale density is still density. A seven-story apartment building on an urban corner is denser than a single-family home. Neighborhoods whose residents prefer to live mid-rise, not in the shadows of super-talls, are not the problem when it comes to density; sprawling car-based suburbs far from good-paying jobs are.
Second, taxation should be structured to favor occupied housing, rather than investment housing, and to encourage housing turnover. Tax reform should include higher rates on second homes and investment homes than on occupied residences, with the new revenue used to lower sales, business and other local taxes. An empty apartment is not a productive investment; a small business is.
Third, zoning laws should be enforced against turning apartments and houses into short-term hotels. The conversion of thousands of apartments into Airbnb rentals in popular cities such as San Francisco and Seattle effectively puts them out of reach of long-term homeowners and renters. The YIMBYs’ rejoinder is that cities should build more housing. But who is going to support more housing if it is built only for tourists who can pay $200 to $300 a night?
And finally, transit investments must be made in a way that can help suburbs become denser and more appealing. Without a convenient network of rail and buses, denser housing only creates traffic jams and less-livable cities. Commuter rail to suburbs can support walkable, mid-scale dense living miles away from a city core, taking pressure off the central city -- and creating interesting neighborhoods.
“Yes” to healthy growth is fair. But “yes” to everything anywhere just creates a harsher and unproductive backlash against all new development. Nobody wins.
