Thursday, July 19, 2012

On Bloomberg's Micro-Units and the Vacancy Tax

On Monday, July 9th, Mayor Michael Bloomberg (whose personal fortune has ballooned over the years of his mayoralty from 5 to 22 billion dollars) announced a new architectural design contest. Contestants are encouraged to submit plans for new, tiny residential apartments. These 'efficiencies', it is remarked, are being designed for single people who live alone. This demographic, Bloomberg explained, is making up an increasingly large percentage of the city's tenants; most apartments, meanwhile, are built for multiple tenants. Ostensibly designed to meet this growing need, these 'micro-units' will be between 275 and 300 square feet. That this size violates the housing law stipulating that residential units shall not fall below 400 square feet is not important to Bloomberg. Implemented in the reform era following the publication of Jacob Riis' epochal How the Other Half Lives, which exposed the overcrowded and unsanitary conditions of the millions living in the city's tenements, these housing laws were tailored to eliminate some of the most serious harms, and diseases, endemic to life in densely populated urban areas. That they are very often unenforced even today ought to be addressed. Instead, like other regulations protecting public health, they are being rolled back.

Bloomberg's statement that the housing laws requiring minimum sizes were implemented in a different era - one which saw more people living together as families, compared to today's world of atomized, single people - and are therefore anachronistic overlooks a nexus of important historical, economic and demographic facts. Rather than moving out of the city to fulfill some sort of middle-class dream of suburban lawns and large automobiles, families have largely been forced out of New York City over the past few decades by economic policies such as these - policies that favor real estate developers, and the rich, over everyone else.

More than a policy designed to create new housing, this is foremost a redistribution of resources that will allow for far more rent to be collected by the landlords of this city. in other words, it is primarily a profit-making enterprise. That it meets housing needs at all is in many respects incidental. That the result will be to further decrease living standards, and the general health, is overlooked as well.

Among the many issues raised by this contest, there are far simpler ways to create housing for people than building these micro-units. It is well documented by the New York City Department of Housing Preservation and Development that, beyond apartments that are undergoing repairs or are otherwise uninhabitable, there are tens of thousands of vacant apartment units throughout the city that are available to meet the housing demand. These apartments, however, just sit vacantly, largely because their owners do not want to see the price of rent decline.

Instituting a vacancy tax of 100% of the going market rate on these vacant units would not only immediately open up housing, the increase in supply would lower the overall rent of apartments as well - contributing further to the creation of affordable housing. While such a policy would be very good for tenants, it would eat into the wealth of the owners. As such, this reasonable and easily implemented policy is being ignored in favor of this micro-unit plan which benefits the welfare of the rich, to the detriment of the 'general welfare.'

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