Q&A: Stephen Smith of Market Urbanism

Photo by Anthony Rhoades

Q&A: Stephen Smith of Market Urbanism

Last week, Mayor Bill de Blasio unveiled what he hopes will be a crowning achievement of his administration: a ten-year, $41 billion housing plan, which he called “literally the largest and most ambitious affordable housing program initiated by any city in this country in the history of the United States of America.” De Blasio’s plan, which would draw upon $8.2 billion in city investments, supplemented by state, federal, and private monies, calls for the creation of 80,000 new units of affordable housing and the preservation of 120,000 affordable units.

To learn more about the details of the plan, what it means for city, and how we should read between the lines, we spoke with Stephen Smith, a freelance writer who covers infrastructure, housing and real estate for Market Urbanism.

What interests you in housing and development?

I’m not sure. It’s interesting to me. My mother was an architect, but that doesn’t really have anything to do with it. Why is anybody interested in anything?

You’re an avid Twitterer, whether it’s on Brooklyn’s bus system, housing—

Many, many things. It’s great for writers. It’s a good exercise in brevity. And it’s nice to see the constant flow of information.

You frequently tweet about Hasidic landlords. Is there something that particularly interests you there?

I love ethnic real estate in New York City. It’s so much more interesting than the expensive stuff. It’s definitely way under-covered. People assume that any new construction in New York City is going to be ultra luxury, which is definitely not true. There is some in Manhattan and in Brownstone Brooklyn, but once you leave there, there’s a lot of relatively affordable places. In northern Bed Stuy, you see $300 a square foot. It’s half to a third of what you pay in Crown Heights. In Sunset Park, it’s a little higher. The Bloomberg administration definitely did a lot of down-zoning in those areas.

What do you mean by down-zoning?

There’s two ways you can rezone. You can up-zone or down-zone. The up-zoned areas are places that are zoned for more development than there was. It means you can build more densely. Williamsburg, Long Island City, West Chelsea were the big ones under the Bloomberg administration. He also down-zoned a lot of these peripheral neighborhoods, like Sunset Park. The areas that were up-zoned were close in, and there was a lot of demand for high-end luxury housing. There’s some residential neighborhoods that were down-zoned. In the outer reaches of Brooklyn and Queens, where there’s not a lot of pressure for development, when they do build it, it’s really affordable. The number-one rule of New York City development is you never up-zone residential neighborhoods. Politicians really do hold preservation of the neighborhood over everything else. They don’t want the construction noise, they don’t want the shadows, they don’t want their parking to be taken away. I don’t see de Blasio up-zoning any of that.

The term “housing crisis” is ubiquitous in New York. How would you describe the situation?

In some ways, it’s a tale of three or four cities. You have the really rich Manhattan, the gentrifying areas, then you have the immigrant areas, then you have the white ethnic areas — the old school Italian and Irish. New York City is still experiencing white flight. It’s a different kind — it’s not a “run for your lives,” but the white ethnics are moving out. I really think since the 1961 zoning code, New York City has not built enough housing. The zoning code really put a limit on it. New York City saw its stature declining and the suburbs were getting bigger. It was a trend all over the United States. The idea was we don’t want the city to decline any more, so let’s maintain single family homes. Once the city started coming back, we’re still stuck in this suburban-style zoning code. That’s the root of it. Once people started seeing all this luxury development, it almost became too late because they started associating all development with luxury…

And Bloomberg…

And Bloomberg. It’s really ironic that Bloomberg got tagged as this pro-development mayor, but only for a certain class of developer. Only for the developer who built at the highest luxury end. He really did well for them, but a small infill builder who wants to build a four-story home in north of Jamaica that were genuinely affordable, he was not very good for them. We didn’t build much housing under him. We increased the housing stock by about 5 percent, which is less than any measure of demand.

What rate of growth is appropriate for New York?

That’s a good question. More. Keeping up with national population growth is the minimum we should be doing. New York City is also seeing more demand. Ten percent wouldn’t be enough to moderate prices, but it would be a good start. It should be doubled at the very, very least. To meet demand, you might need to be at 20 percent. That’s Tokyo levels of growth.

De Blasio’s housing plan pointed to gentrification, “unscrupulous” landlords, and the real estate lobby as the reasons for the city’s housing crunch. Do you agree with that characterization?

Not at all, really. To blame the housing crisis on gentrification — they are the same thing. Gentrification is the housing crisis, it’s the result of it. In a proper market, in a place like Japan, or suburban-anywhere America, where you can build whatever you want, you see the opposite of gentrification, which is called filtering, which is as a house ages, it’ll decline in value. It’s what you saw in New York City in the ’70s. You had these beautiful houses and they declined and poorer people could afford them. I think landlords and developers are essentially automatic creatures. Developers want to build what’s profitable anywhere and everywhere. They will always want that and they’re not going to change. To blame it on them — what’s changed is the rules. The real estate lobby. In some ways I could blame the real estate lobby for not caring about the small ethnic neighborhoods. But de Blasio means the complete opposite. That is probably BS.

So then what do you attribute it to?

I attribute it to the low growth in the housing stock. People don’t realize how little New York City builds. A 5 percent increase in stock is the same as Paris. There’s virtually no construction happening.

You say de Blasio’s plan is only slightly to left of Bloomberg’s? It’s not unusual for politicians to promise something on the campaign trail, then have a reality check once in office...

Which is obviously what happened to him. There’s really three major ways to make housing affordable. I don’t personally think they’re effective, but they are big things to make the city affordable. A right-leaning solution is to build a lot more housing. There’s two lefty ways to do it, which is to build a ton of public housing. The third way would be to increase rent control. Rent control will do terrible things for a newcomer.

Is there a way to create rent control for new people?

No. It would stop people from ever leaving the apartments. There wouldn’t be apartments to pick. I don’t think any proponent of rent control will tell you that it will enable a lot of newcomers to come in. De Blasio … didn’t mention it in his speech. It’s totally non-controversial in New York City. Everyone wants it. There’s nothing to be lost to advocating for it. I think he knows that he’s not going to get it. You saw how he did with pre-K, and he wanted something from Albany. He half got it. He was really forceful about it. You don’t see him being forceful about rent control.

Is there a way to for him to be forceful about rent control?

I think if de Blasio really wanted rent control, he might have half gotten it. He could have tried. He’s not trying.

How does de Blasio plan a continuation of Bloomberg’s policies?

Low housing stock, not pushing for more rental controls. It seems like he wants to fund more of the affordable development through market-rate development, which is a Bloomberg innovation, if you will. It’s slightly to the left. He wants to produce the same amount Bloomberg did, he just wants a little more affordable housing. You don’t see him calling for massive rent controls. He’s not doing much about it. The rhetoric is totally different, though.

What did you want to see in the housing plan?

It’s not what I wanted to see. I was just saying what a left-leaning policy would be. It would definitely tend toward build more housing stock. A really leftish policy would be a lot more forceful about bringing rent control back under the city’s control. That would be something a lot of people on the left really want. I don’t think he’s going to deliver that.

Do you think it’s better to build more subsidized or market-rate buildings?

Mostly market-rate. The city is building as much subsidized as they could afford.

That would mean that rents would go up, wouldn’t it?

I think if you built a lot of market-rate housing, you would start seeing filtering happen. You attract rich people to wealthier neighborhoods, so they don’t move and gentrify others. You sort of absorb the richness in Manhattan, then you don’t force people to move further and further. You would produce more housing at the high end, then you wouldn’t have much pressure on the low end.

How will the plan impact Brooklyn?

Atlantic Yards will eventually happen. All the industrial property neighborhoods — that is where the growth will be. Fulton, there’s actually a lot of Williamsburg that was not up-zoned. There’s some waterfront areas that were not up-zoned. There’s some areas around the Hasidic part of northern Bed Stuy. Sunset Park.

What about population growth? New York City is already pretty dense — should the city keep building to meet population demand, or will there come a time when the city needs to actively turn people away?

Well, I think they’ve already been saying that, to be honest. One thing that is really important is the percentage of housing stock growth every decade and how fast the city is growing. NYC is growing 5 percent, lower than the growth rate. But practical limits to growth in New York City — the one practical limit to growth is transportation. NYC is really bad about building subways. Our construction costs are out of this world. There are areas in NYC where the subways can handle a lot more growth. The example I always use is the L train. It’s really unbalanced: you have everyone coming from Brooklyn and working in Manhattan. If you look at the unbalanced train lines, there’s a lot of room for housing on the other end. There are definitely places to build. In Brooklyn, all of southern Brooklyn. Southern Brooklyn is a place where you could get a lot out of up-zoning.

Will Brooklyn become more dense? More expensive?

Not that much more dense, definitely less affordable. I see the trend of the core market expanding: Crown Heights is going to become more like Park Slope. You’re going to see immigrants to continue to push eastward. The white ethnic neighborhoods turn West Indian. You’ll see Chinese, Russian, and Mexican immigrants in the southern part of the borough.

I guess I would emphasize that there is still affordable, market-rate construction in New York City happening. I think that Bloomberg totally ignored it. De Blasio will continue to ignore it. And it will probably die soon. It just won’t be viable anymore. I hope you enjoy your hour-long commute in ten years.

This interview has been condensed and edited.

Amanda Waldroupe is an award-winning journalist and writer. A recent transplant from Portland, Oregon, she has written for the Brooklyn Rail, the Oregonian, and Oregon Business Magazine.

Anthony Rhoades is a freelance photographer and the photo editor of /ONE/. He lives in Greenpoint.

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