Problem Memorandum

To:	Nicholas Otte
From:	Sefat Monzor, Nasif Abrar, Saifeldin Fathelbab
Subject:	Housing in New York City
Date:	October 20, 2020

The purpose of this memo is to highlight on the on growing housing problem in New York City. This is a matter that is affecting the life of all in one way or the other. The root causes of this problem are mentioned in the discussion part of the memo and to make a change in the system and to solve this problem, in the recommendation part some effective measurements have been shared.  

Summary:

     Population in New York City has been steadily increasing for the past ten years and the growth in population is making it difficult for the residents to afford housing in a decent price. This has become a serious matter of concern for the citizens, residents, and the immigrants of New York City. Report says, although the housing stock grew by about 8% between 2000 and the end of 2016, the adult population grew by almost 11%, as a result the demand is higher than supply, which is another cause of this problem. A decent living place can give people the security of their life which fulfills one of the basic human rights. To ensure a decent but affordable housing to the residents of New York City, the system needs to be changed. Later in the memo, some innovation ideas will be shared to put this problem to an end. 

Discussion:

     There are two issues with housing in New York City. The first is how the supply of housing is less than the demand for housing that people need. The second issue of housing is how the cost of housing may be more than what people are able to afford. From the 1970’s to now the housing prices and rents has outgrown the housing supply. The housing supply has grown by 20% while the pricing of housing has grown more than 20%. Additionally, “much of post-2000 housing stock is more expensive than older housing stock, pricing many New Yorkers out.” This shows that there is more demand than the supply of housing. Also, since the demand is more than the supply this means there will be an increase of the price of the housing. Leading to our second issue with NYC housing. The price of housing in NYC has grown a substantial amount over the years. “According to the report, between 2005 and 2017 in New York City, basic costs like housing, transportation, childcare and food had risen at nearly twice the rate of incomes.” This is a problem as all people living in NYC may not be able to afford this increase in pricing. Another example of how high the price of living in NYC is expensive is “The average house price in Brooklyn is listed at $977,259. But it would take a salary of $255,000 to afford it – far out of reach for average earners in the Borough.” Also, another example of how the price of housing is a problem to people living in NYC is “Over the past five years, rents for the most affordable apartments in the city have grown at a faster rate than more expensive ones, with low-income earners bearing the brunt of the increases.” This is clearly a problem as you can see. This high pricing of housing causing many low-income workers to worry about paying the rent next month causing financial doubt which can disturb a person’s life. These are the two problems with housing in NYC. I am hopeful that we can make housing in NYC affordable for everyone and not just the wealthy. I am also optimistic that we can provide additional housing units for all the people who wish to live in NYC in the near future.

Recommendation:
      A possible solution is building affordable homes. “It’s a game-changing program that empowers families with the tools for finding stability, safety and greater independence.” (How to ease NYC’S housing crisis By Christine Quinn) Low-income families and homeless families are given housing in a large supportive housing development. They also have learning and preparation programs so that they can have a job and career they are trained for.  There should be plans for building more affordable houses instead of focusing on building more expensive houses. Building affordable houses for New Yorkers will help to solve the housing crisis. Another possible solution would be price controls. “get your elected officials to mandate that owners of existing buildings charge lower rents and that developers of new ones sell their units at lower prices.” (Does America’s housing need supply-side or demand-side solutions). Most of the housing in New York City is sold to investors. Selling the houses and buildings to investors makes the investors control the prices. So, there should be houses and apartments that can be rented or sold directly by the government to residents. Furthermore, more affordable housing will help people to have better living conditions and a more stable life so that they can be more productive in society.

Sources:

1. Bradley-Smith, A. (2020, January 28). Unaffordable NYC: The Rising Cost of Calling New York City Home. Retrieved October 13, 2020, from https://www.bkreader.com/2020/01/19/unaffordable-nyc-the-rising-cost-of-calling-new-york-city-home/
2. Clark, R. (2018, May 25). Is New York City’s housing supply keeping up with demand? Retrieved October 13, 2020, from https://www.livabl.com/2018/05/new-york-citys-housing-supply-keeping-demand.html
3. Quinn, C. (2018, August 06). How to ease NYC’s housing crisis. Retrieved October 13, 2020, from https://www.amny.com/opinion/how-to-ease-nyc-s-housing-crisis-1-20321499/
4. Beyer, S. (2018, October). Does America’s Housing Crisis Need Supply-Side Or Demand-Side Solutions? Retrieved October 13, 2020, from https://marketurbanismreport.com/blog/does-americas-housing-crisis-need-supply-side-or-demand-side-solutions
5. “REPORT: Growth in NYC’s Housing Stock Is Outpaced by Growth in Adult Population and Job Growth.” NYU Furman Center, furmancenter.org/thestoop/entry/report-growth-in-nycs-housing-stock-is-outpaced-by-growth-in-adult-populati.

Roles:

Sefat: Topic Supervisor, contributed to the memo by doing the purpose and summary portion of this memo.

Nasif: Research Director, contributed to the memo by doing the discussion portion of the memo.

Saif: Submission manager, contributed to the memo by doing the recommendation portion of this memo.