The article is about Manhattan. Do you have any idea if it has similar problems? In my mind, Manhattan is pretty dense.

The high prices in Manhattan are caused by the low supply of other Manhattan-like density and public transit capable cities in the US.

Manhattan is expensive because rich people want to live there. Brooklyn and Queens and Harlem have density and transit but cost less.

Transit in Brooklyn and Queens is much worse than Manhattan.

See my other comment:

https://news.ycombinator.com/item?id=32098815

I am obviously less informed on Manhattan shenanigans, but enough to know that there's plenty of obstacles to new construction in NYC and Manhattan proper.

I recall AOC lobbying for stopping an apartment complex in a formerly industrial area. And a articles on how certain areas of Manhattan don't allow towers. In fact, a quick look at the zoning map [0] has, eg, large areas zoned as "R8B contextual districts are designed to preserve the character and scale of taller rowhouse neighborhoods".

SF is the worst offender, but NYC is still pretty bad.

[0] https://zola.planning.nyc.gov

> In my mind, Manhattan is pretty dense.

It can be doing so much better. I get a tad excited reading about 1,000ft supertall's being built, only to sigh when I see it will have a whopping 80 units. I've seen even more ridiculous stuff like a 10 story building with 4 units. There's been a ton of construction in NYC over the last 5 years alone but it seems to be mostly luxury and medium/low density. There are plenty of older buildings from the 20th century that are much denser but it seems that no one wants to build these anymore. (Or they can't, I'm not sure which).

More than 40% of the building square footage in Manhattan would be literally illegal to build today.[1] Developers would absolutely love to build huge skyscrapers housing thousands. However the city has zoning rules with onerous setbacks, height and density restrictions. The focus on ultra luxury development is a byproduct of heavy handed government regulation.

[1]https://www.nytimes.com/interactive/2016/05/19/upshot/forty-...

Exactly. Libertarians in here love to say it's a lack of supply and it's simple supply and demand and you look at what's being built and it's 1000ft tall buildings with a tiny number of luxury units.

In the 1990s, the US restricted the number of car imports from Japan. As a result, Toyota and Nissan had car quotas. They had luxury cars and mass-market cars. Which do you think they filled their quota with first? Obviously the higher-margin luxury cars. Clearly the problem is not a simple lack of supply, right? Toyota and Nissan just need to make more affordable cars? Or is it obvious that when you restrict supply in a market, only the highest-margin (luxury) goods get produced, until demand for them is met and manufacturers are forced to produce and sell lower-margin mass-market (more affordable) goods?

It's more dense than other cities, but there's still a few problems. There was a huge controversy when the city tried to upzone SoHo/NoHo.

Additionally, the other boroughs aren't super dense. For example, much of the land next to LIRR is pretty low density, and even SFH [0]. Some people in Manhattan would be okay living there, so that does lead to higher rents in Manhattan.

0 - https://www.planetizen.com/news/2021/06/113861-new-york-time...

Looks like lots of space right here tbh:

https://i.imgur.com/tVwMCYG.jpeg

Manhattan is 25% less dense than it was in 1910. The densest census tract in Manhattan is four times denser than borough average. We could easily double the population of the island, even without getting into ultra tall skyscrapers or reclaiming more land.

I live in East Village right on the border with the LES. There's certainly development happening and new buildings coming up but when I walk around EV/LES it sometimes feels like I see more 2-3 story buildings than otherwise. There's literally no reason any of these buildings should be under 6 stories minimum. People think of Manhattan as being dense with a bunch of skyscrapers but I suspect in reality there's still a whole lot of units that could be added by simply building upwards.

I say 6 stories because you can reasonably have a 6-story walkup. Anything higher and you would need to add an elevator which could make things harder.

In my mind it is the same problem everywhere. Supply is too low and is kept low for many reasons. There is insane demand from around the world to live in Manhattan.

The solution of course is to build more, but it just happens that the private initiative always build under demand because it is inelastic and it's in their interest to keep the market as so.

Of course the Vienna success came from public intervention because otherwhise you'd have exactly the same situation of hundreds of other cities where rent is always a hefty amount of modal income and no matter how easy and cheap is to build it just happens those with access to capital never meet demand.

You need to build more, in many cite MUCH more, and you need vacant housing so floating population can come and go easily.

> The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply. Tokyo is another city with famously cheap housing, and the secret is that they make it easy to build.

The other two secrets are tiny apartments (200-400 sqft), and an incredibly reliable public transportation system. Tokyo has a massive sprawl -- people can and do live far from their work. The average one-way commute time in the Tokyo metro area is almost an hour.

400sqft is about 37m2 That’s pretty much the smallest apartment you’ll find in Vienna, and only for individuals living alone. But yes they are smaller than houses but mostly bigger than Manhattan family apartments :) Every family I know lives in about 80m2 to 120m2 and pays around 1000-2000 euros/month rent. Depending heavily on location and quality of course.

I think, fundamentally, the problem is that there is a highly speculative market (real-estate) attached to a basic needs market (housing).

I think of myself as right-of-center, but think George was more or less spot on w.r.t. land.

I wonder if there is a solution in banning rent itself? i.e. force owners to transfer a % of ownership equal to rental fees received from tenants and allow them to discount improvements against that.

Whether housing is rented or owned has no relation to its price. Making it illegal to speculate/profit from housing doesn't solve the underlying issue that is a massive (xx,000,000) unit shortage of housing in the United States.

Absolutely it has a relation to its price. A domicile's value in any setting is determined by it's speculative value + a discounted income model. This model wildly decreases the discounted income value without addressing the speculative value.

As far as I'm aware there are more housing units than people in the US. We do have an incentive structure that puts property owners' needs at odds w/ society's needs on multiple factors, and some of them (i.e. NIMBYism) can be addressed orthogonally to the intractability of housing as investment vs housing as housing.

> The solution is to build more

I wonder, because it is always stated that if only density was increased by building more, housing would become cheap.

But this article is about NYC, the densest city in the US, not being cheap at all.

> The only sustainable way to get affordable housing is when the market price is affordable.

And the only way to reduce the market price to affordable rates is to crack down on the demand - there is no reasonable way to expand the offer side in many cities any more since they don't have the space. And most demand is driven by the fact that rural areas have been left in a decrepit state for decades: highways, bridges and other infrastructure is crumbling, there is no public transport worth the name, forget about fast internet (or fast internet offered by a crap monopolist), employers have closed down or moved to urban areas, schools and medical services are constantly closing or underfunded...

To fix the urban rent explosion problem, we need to fix rural areas and make them livable again.

its actually important for the long trend towards urbanization to continue, for many reasons.

> The solution is to build more, and the success of Vienna does not come from public intervention but from the added supply.

Population densities (per sq k):

Manhattan: 38000

Tokyo: 6158

Vienna: ~5000

I don't see how supply is Manhattan's problem here.

The problem is that Manhattan is the only truly dense area with good transit in a country of 330 million. Tokyo is much larger than Manhattan and is dense throughout. Other Japanese cities are dense too, so people have options when prices out.

I'm no NIMBY but places like NYC will never be able to build enough to outpace demand.

And yet it works in Tokyo, a city of almost double the population?

Greater Tokyo Area? Tokyo Metropolis? Previous Tokyo City limits? New York City metro area? New York City? Manhattan? These can be 2 orders of magnitude apart in scale but they've all been talked about like it was the same location A and location B.

At the small scale Tokyo's densest ward is ~22,700/km^2 and Manhattan is ~28,800/km^2 with Manhattan being ~4x-5x the land area of the former (i.e. the core is a lot more dense). At the large scale the Greater Tokyo Area is ~2,900/km^2 and the New York Metropolitan Area is ~2,053/km^2 (i.e. the urban area around Tokyo is a lot more dense).

"Tokyo" is a good example that you can get affordable housing by focusing on how to spread the population over a large urban area but it's not a good example building more housing downtown is a scalable approach.

I'm not sure why you think Tokyo works, it wasn't long ago that it was multiple times the price of NYC. It might be affordable now but only because of a economic slump and Japan's falling population.

Tokyo's population grew, actually.

New York City already has a significantly higher population density than Tokyo (~11,300/km2 vs ~6,300/km). It's easier to develop more housing when you have more land.

You need to include Newark, Yonkers, Long Island, etc if you want to compare those figures.

Tokyo is 13400 sq km, NYC is 780 sq km. If I rounded Tokyo's land area to the same sig figs as I did for NYC, it would be lowered by half the total area that NYC takes up!

> You need to include Newark, Yonkers, Long Island, etc if you want to compare those figures.

That's just not an accurate comparison.

Live in NYC. Lived in Japan. The difference is transit. It is far easier to get to Saitama or Kawasaki or Yokohama or Chiba than it is to get to Long Island from NYC. You can do the former in an hour at rush hour. Try getting to downtown Manhattan from Bay Shore as a daily commute. You'll go mad.

Here's Tokyo and New York at the same zoom level:

Tokyo: https://www.google.com/maps/@35.736739,139.6246444,10z

NYC: https://www.google.com/maps/@40.7983574,-73.948053,10z

The gray area of Tokyo on that map is pretty much all considered an exurb of Tokyo, more-or-less feasible for daily commute by rail. Most of the NYC region is inaccessible from Manhattan, except by car. Look at the Seibu Shinjuku line, or the Chuo line on the Tokyo map -- both offer express trains that will take you from the distant western exurbs, right into the middle of downtown Tokyo:

https://en.wikipedia.org/wiki/Seibu_Shinjuku_Line

https://en.wikipedia.org/wiki/Ch%C5%AB%C5%8D_Line_(Rapid)

I understand, but that doesn't change my assertion that comparing Tokyo density to only-NYC density makes no sense, especially as an argument that there is no room for to build more. Hogwash! Half your NYC map is pure green, but even leaving that, most of the land area on that map that is housing is SFH.

The density of the NYC MSA is 1/3 that of Tokyo: https://en.m.wikipedia.org/wiki/New_York_metropolitan_area

There's plenty of room to grow up. Just because the reason we don't is shitty government organization and FPTP voting doesn't mean we can just ignore the vast swaths of low-density just outside Manhattan 's borders.

Incrementally, building improves living conditions. It's not all-or-nothing.

I thought there was a ton of empty housing in NYC, it's just insanely expensive.

This isn't true - vacancy rates are below the healthy threshold https://citylimits.org/2022/05/17/nycs-latest-vacancy-survey...

I think they can. The thing is the corporate landlords would rather have their high rises sit empty than rent the units at reasonable rates.

NYC rental vacancy is only a bit over 4% city wide. The national average is closer to 6%. It is very expensive to build in New York, and projects can be scuttled at any time due to angry neighbors or intervention by city council. The EIS process adds a ton of cost to new construction. As a result of this risk banks require high returns in NYC than in most places in order to secure loans. If you take a development loan the rental price for the units is written into the loan.

do you have evidence for this?

Vacancy rates are well low at the moment.

I think this a feature of accounting practices. Mark down rent means you mark down the asset value of the building on your balance sheet. This reduces the value of your business which means loans secured against the business are in jeopardy and it limits the potential to borrow more money. This is why commercial rents going down is a rare event. Fwiw i am not an accountant and could well be wrong.

Do you know what would motivate this behavior? Naively, any rent is more than zero rent, so why let a unit sit empty?

IIRC Sometimes some of these units are tied to a mortgage. Renting it at a reasonable price could make the price of the unit to drop making the money lender wanting to renegotiate the mortgage contract.

There's a large (20,000+) volume of empty rent-stabilized units - in those cases, landlords say that a recent tenant protection law (HSTPA, 2019) makes it uneconomic for them to rent due to the expected difficulty of evicting non-paying tenants and the strict limitations on how much repair and investment work can be recouped from increasing rent.

My gut feeling is this doesn't entirely explain it, but any tenant is also more work than no tenant, so they may not want to do the work of signing a new lease and dealing with the work it will trigger for less than you're making per-head on your current tenants.

There's probably also a fear that if you let a new tenant in for lower rent, this might lower the rent other people expect and the problem starts snowballing.

Surely this works in a short timeframe where a landlord can make a tactical decision to let the property sit empty rather than rent it out for less than a threshold. Landlords can even collude on a minimal rent below which they will not rent. (Basically "hold the line"). But how is this sustainable in the long run? The money for the original mortgage has to come from some place. Not all landlords have an infinite supply of money to keep this practice going on for a few years. (There is no VC funding available for them).

With commercial units (eg - downtown San Francisco) it is even harder because with remote work, the jobs are never coming back to the city.

On mobile so don't have a ready link. Iirc a lot of commercial real estate can get into a death spiral if the loan they have which is based on a certain amount of income starts having less income. If I can find the explanation I will add it later.

> Naively, any rent is more than zero rent, so why let a unit sit empty?

There's a substantial cost in having a renter living there, both in dollars and risk. So if the rent isn't enough to cover those, it's cheaper to let it sit unused.

Lots of empty property → less housing supply → higher rents → higher property prices

If property appreciation outpaces the gains one could make from renting it out, then it’s better to leave it empty.

Likely true, but tenant occupied properties do have additional maintenance costs.

It keeps the market rate high for other units/properties.

That does not make sense from a game-theoretic standpoint. You would be helping other landlords at your own expense. It would be better to let other landlords make that sacrifice and rent our your own properties for as much as you can get.

that's the thing. They are okay with helping other landlords because they themselves hold other multiple properties. There is more benefits by having the rates high than losing money on a few units.

It totally makes sense for the rental property owners.

Why do you believe that?

Cannot speak for the poster, but the big current issue is that the value of residential units has gone from being strongly linked to wages to residences being an extremely valuable chip for playing financial games. Residences, especially inherently valuable ones like NYC apartments, have sufficient demand from financial game players that wage earners are barely able to keep up. Exactly how things break down is not clear, but there is this idea that demand for residences for financial purposes is competing aggressively with people who want homes.

This is a well studied idea, the percentage of units sitting empty is a round error in the total supply of housing. At the start of the pandemic there were a paltry 4000 vacant condos. For reference there are 2.3 million apartments in the city.

That is not directly related. People and institutions holding residential units for investment purposes usually rent them out.

Then they're on the rental market and don't contribute to a shortage in supply.

But how many vacant apartments were there (or how many total condos)?

The vacancy rate of apartments is just at or under 4.5% which is considered a very tight rental market. I don't have the total condo numbers readily at hand.

Because I grew up in Brooklyn and Queens and saw what all of the new development did to the demand. The street that my grandmother used to rent an apartment for in the early 2000s for under $1k/month now only has units that go for $5K/month.

Here's greenpoint as an example: https://www.zumper.com/rent-research/new-york-ny/greenpoint. Same goes for LIC.

As a Californian, if the demand is there, it will eventually bid up trash fire apartments to 2k a month, even if they're still colocated with violence and bad schools, you don't need to induce any demand with development.

Maybe because Greenpoint and LIC became a lot more in-demand in those 20 years and development followed the demand?

You have that backwards. Bloomberg rezoned the queens and brooklyn waterfront for his real estate investor buddies, which gentrified the shit out of these neighborhoods and brought in a ton of people that would have never dared to cross the east river.

So they allowed housing to be built to meet the demand of living on the waterfront.

All over NYC, there are empty buildings and apartments. There's space, but landlords are artificially reducing supply.

Read up on rent control in the 70’s and landlord’s burning down their own buildings to collect insurance.

Artificially forcing prices low just reduces supply.

But no doubt NYC will head down that path.

Seems like all major cities are repeating the policies of the 60’s-80’s that causes populations to drop.

Flashback to late 1970s driving through the Bronx with my family - an annual ritual as most of the extended family was still in the NYC area while we had moved to Rochester. We would pass blocks of empty high-rise apartments in the South Bronx.

As a middle-middle-class suburban kid, I just couldn't conceive of how the wealthiest city on earth could have sections that looked like a bombed-out and evacuated European city following World War II.

I asked my father what had happened here. He answer was "rent control".

Nyc apartments are at 4% vacancy, a decent bit below the national average. This meme is just straight up false.

Too bad there are "investment luxury hi-rises" popping up all over the skyline that are largely unpopulated. If that's what people want to build to park their billions, we have other problems to tend to first.

This is a conspiracy-theory-level analysis that isn't supported by any available evidence.

Seven buildings. That's not representative of...anything. It's not even worth talking about. And the effects are largely positive for the city, anyway. You've got a few big, empty buildings concentrated on one street where billionaires park their money, pay a bunch of property taxes, and use zero city services. That's an unqualified win.

It represents several billions of dollars worth of luxury real estate left vacant, and obscuring central park.

If you want to call that "nothing" then there is no reaching you.

No idea why you're being downvoted. This meme (rich people buying luxury condos, letting them sit vacant, and then profiting somehow) doesn't make any sense, and that article posted as evidence for it undermines it by depicting those units as being un-rentable due to oversupply in the market.

it makes total sense you park your money in an asset that will increase in value over time. you don't need to actively use it.

And in the meantime, they choose not to rent it why? The intuitive answer is: they're hard to rent, because there's way more luxury condos available to be rented than people who want to rent them, and it was a bad investment that the rich person will probably lose money on (if not in absolute dollars, then in comparison to some other property that is desirable to rent). But a lot of people in this thread seem to think it's intentional and rich people have some devious way of making more from a vacant condo than a rented one.

NYC has super low property tax. It's a win for no one

If I were faced with a situation where the taxes were sub-optimally low, then I would simply raise the taxes, instead of trying to remake the entire concept of private property.

Attracting billionaires is a win. Even if they’re just there for a couple weeks a year they’re providing a lot of prestige.

Prestige sounds like "paying in exposure" that artists keep hearing about.

I mean brands do that. Look at Redbull having a F-1 team (and other sports team).

There are insane tax breaks these luxury apartments get, too, on the order of a 90% discount. It's not like these properties are generating huge windfalls for city or state government.

https://www.nbcnews.com/business/markets/billionaires-get-lo...

Sure, but they don't cost the city anything, either. They sit empty and the city collects money. Meanwhile, the owners aren't even there and use zero city services. Should those taxes be higher? Fine with me! But these apartments are a low-salience/high-visibility distraction. They have hardly anything to do with the issues in the broader housing market.

Actually they do. They influence the mindset and strategy of developers.

Can you supply some evidence that it is a conspiracy theory? Because I read this article in The Atlantic:

https://www.theatlantic.com/ideas/archive/2020/01/american-h...

"But the bust is upon us. Today, nearly half of the Manhattan luxury-condo units that have come onto the market in the past five years are still unsold, according to The New York Times."

Sorry, but I trust the Atlantic over you unless you got some facts.

Here's the quote from the NY Times article [0] your Atlantic article references:

> Nearly half of new condo units in Manhattan that came to market after 2015, or 3,695 of 7,727 apartments, remain unsold, according to a December analysis of both closed sales and contracts by Nancy Packes Data Services, a real estate consultancy and database provider.

So we're talking about 3,695 unsold apartments. There are 3.5 million housing units in New York City. So that's about a tenth of one percent .

The problem here isn't that the statistic is wrong; it's that anybody thinks 7k new units over a 5 year period in a metro area of 20 million people is anything more than a curiosity.

The hallmark of a conspiracy theory is that it offers a sensational explanation -- usually some foreign, outside force -- for a complex problem, absolves the believer of any culpability, and provides an easy, unsympathetic target on which to dump all their rage. "Foreign oligarchs are buying up all the real estate and locking the rest of us out and that's what's wrong with the housing market" is exactly that kind of theory. And 3500 unsold units over 5 years is emphatically not evidence of its veracity.

[0] https://www.nytimes.com/2020/01/10/realestate/new-york-decad...

Ah. I see. I'll stop parroting that line now that I understand the impact better. I still think it is shitty of rich people to do that, however.

4% of apartments in nyc are vacant. You can claim that luxury units are more expensive because a block on the southern border is made up of half empty units owned by billionaires, but the rest of the city does not experience that phenomenon at all.

that's what you get when there's rent control; luxury housing doesn't count so there's more of an incentive to build that instead