Anchor Higher: 15 Million New Yorkers

If there were a Martin Luther of housing, and he were nailing some theses to every door in New York City (and Albany), I would recommend four:

• ~8.8 million people live in New York City, but it should be more like 15 million, at least. Sometime in the 2030s.

• The city should be building hundreds of thousands of housing units a year.

• We need new homes built with modern knowledge, modern efficiency, and well-considered beauty, and we shouldn’t idolize old buildings.

• NYC residents should anchor on higher numbers, and know that current population and housing numbers are poor anchor points.

Here’s some more detail on each of the four theses:

15 million people

A larger NYC would reap even more benefits from urban agglomeration, become much wealthier (radically wealthier),¹ enable millions of people to move here to live their preferred lives,² and generally propagate massive positive externalities across most major policy areas, including climate, health, labor, productivity, and more—all at the city, state, and national level.³

There are relevant questions about natural carrying capacity for 15 million. Could the city do it? Yes. One primary example I give is water supply, and how both absolute and per capita water usage for NYC has fallen as its population has risen.⁴ The city’s use of natural resources and energy can accommodate many more people, just as they have accommodated the continued population influx in the past decade.

The city has the theoretical capacity to grow much larger in a healthy way, but current New York State and City legal restrictions on housing construction only permit irregular, massively suboptimal growth; it’s like a small animal kept in a tight cage. It will grow, but it will not be nice. Let it out!

Hundreds of Thousands of Housing Units Per Year

NYC is already in a massive housing deficit, needing hundreds of thousands of units just to stabilize the current housing market. But both the number of issued building permits and certificates of occupancy have hovered around an average of 25k units per year for the past decade⁵—not nearly enough to compensate for the population growth of 629,000 that’s happened during the same time.

The answer to the question “How many housing units should NYC build exactly?” isn’t obvious, but I do think an honest contemplation of readily available facts would lead most people to ballpark at least 100k a year. The Real Estate Board of New York reckons we need 560,000 units by 2030, but even this number is likely far too low.⁶

Housing supply is the only way forward, both to solve many of our housing problems and enable many more good things to come into being. But a few thousand units a year, even a few ten thousand, will not do it, for the same reason that an ounce of cheese would not save a starving man.⁷

Build Modern, Build Beautiful

I think many people would agree that NYC builds a lot of ugly buildings in modern times, and that the average building used to be more beautiful.⁸ This makes them reticent about advocating for a bunch of new buildings, because they might (1) replace older, more beautiful buildings, and (2) ugly up the city even further even when they don’t do the latter.

This is a valid concern, because the beauty of our built environment is vitally important for human well-being. But I don’t think that concern’s logical endpoint is “don’t advocate for scads of new housing,” because—even if every new apartment building was modern-ugly—our housing shortage produces massive ugliness in other areas of life that far outweigh potential building ugliness.

Further: new buildings are just nicer.⁹ They’re more efficient, they’re more accessible, they have better amenities, and the list goes on. And I don’t think they look as reliably bad as people think, although I do agree they need to look better on average.

Even further: too much reverence for older buildings (among other things) is encasing NYC in amber. Ever increasing amounts of the city are being placed in historic districts, which are much harder to build in. NYC is being forcibly held in the past at the unlimited expense of the future. Almost half of my neighborhood, the Upper West Side, is covered in historic districts.¹⁰

Finally: the source of modern-ugly buildings is rooted, at least partially, in the same legal, bureaucratic sclerosis as housing production itself. Advocating for massive amounts of new housing means advocating for freedom from red tape, the same red tape that induces ugliness by artificially increasing the cost of projects and putting downward pressure on beautification budgets. And: it’s not like old buildings are safe from becoming ugly either.¹¹

We’re currently stuck trying to maintain an increasingly decrepit housing stock at higher and higher opportunity cost. 71% of NYC’s residential buildings were built before 1951 (!!), and 39% of them could not legally be rebuilt to even their current size, let alone larger, if they were knocked down, incentivizing owners to keep old buildings when they otherwise wouldn’t.¹² These numbers are shocking, or at least they should be.

Anchor Higher

NYC housing policy is a deeply complicated subject, but I do think the three ideas above are sensible once you’ve taken a survey of the facts.

The city’s status quo population and population growth rate are not natural or healthy, and people should not anchor on them as a proper baseline. They are the anemic byproduct of a worse timeline where both the government and voters do not appreciate the full value of NYC, and where they massively constrain it in an endless amount of invisible ways. Truly, it is death by a thousand cuts.

The result: we must anchor higher. The strategy about how to do this in specific contexts is for a separate essay, but the city needs its citizens to do so. Just like any social movement, changing individual hearts and minds is the first important step; in an era of politicians that lead from behind (at least on housing, when they’re not actively hauling it backwards), the populace must go first.¹³

It’s quite sensible to advocate for an NYC of 15 million, that builds in the manner appropriate to a place claiming the title of “capital of the world,” and that increases well-being and wealth for all on a radical scale. The world wants more NYC! Despite the city and state’s aggressively hostile housing policies, the city keeps growing! In a world where more governments are dealing with population loss, NYC could have abundance if it would permit it.

As far as housing goes, we do not have to come up with a solution to the housing crisis, merely permit it. The old housing order (literally and figuratively) can only be upheld by forcibly preventing its alternative: housing abundance.

1. I wrote about the general returns to scale that urban environments in America receive. A city that increases its size by 100% generally reaps rewards in wages (and tax base) of 112%, and the cost of infrastructure gets a 15% discount.

2. It seems that rates of depression, like infrastructure costs mentioned above, scale sublinearly to the size of a city. As a city doubles, depression rates fall by 12%. There’s more research to be done in this area, but the results seem to hold up to me so far. The Twitter thread I linked contains critiques of the paper suggesting the 12% decrease, and responses to those critiques from the paper’s author.

3. Works in Progress’s “The Housing Theory of Everything” will likely go down as one of the most consequential pieces about housing written in the early-twentieth century.

4. See my Twitter thread on the topic. During the same time that water usage dropped, water prices went up, but not in a problematic way. While some portion of this is due to bureaucratic nonsense, infrastructure upgrades and changing the water system’s finance methods carry most of the blame. But as the Citizens Budget Commission put it in their excellent report on NYC’s water and sewer system: “…the rent is not too damn high – but ain’t quite right.”

5. NYU’s Furman Center puts out excellent annual reports about the state of NYC’s housing; those numbers are from the 2020 report, which is the most recent available.

6. Their report is based on a population of 9 million by 2030, but honestly that seems like a low projection. The city’s population is already at 8.8 million and still growing, according to the 2020 census.

7. Housing supply is currently in a massive deficit, and would require many units to exit that deficit and achieve something like a healthy market equilibrium. One might wonder whether housing units added after that point would simply be filled as soon as they’re added, and ever allow prices to fall. Matt Yglesias covered this “induced demand” issue in good detail in his newsletter.

8. Works in Progress describes this phenomenon in “Against the Survival of the Prettiest”

9. The Atlantic’s “Stop Fetishizing Old Homes” hits this nail right on the head. You can follow the piece’s author on Twitter. He’s got a book coming out later this year that I’m very excited about.

10. Take a look for yourself. This map shows the increasing reach of historic districts in NYC. I think advocates for these areas argue in bad faith a lot of the time (to keep their property values high, and they don’t analyze the opportunity costs of their actions), and a good way to tell when this is happening is if they refuse to give a reasonable cap on how much of the city should be covered by historic districts.

11. Slapping vinyl over masonry can be cheaper than fixing the masonry, especially with onerous regulations.

12. See the section “Overbuilt Gotham” in “Welcome to the FAR Dome: By How Much is Gotham Allowed to Grow?”

13. But the politicians do come around if the populace gets vocal! We’re already beginning to see it in more places across America, although not yet from NYS and NYC politicians.