Despite growth in new sectors like technology, where jobs grew 60 percent from 2003 to 2012[i], the poverty rate in New York City is 22 percent higher than twelve years ago. And in the years following the collapse of the financial bubble (2008 to 2011), the median income declined 6%.[ii] Unemployment remains stubbornly high – 8.6% in September 2013 – and those unemployment numbers reach half of the working-age black and latino population in the City.[iii]
The mass construction associated with building the amount of market-rate and affordable housing envisioned by this program would directly and indirectly create a job bonanza to expand employment opportunities for all New Yorkers. Construction of all these units would drive a large range of employment in the City —short-term construction jobs, design, support services and the jobs induced by the spending of all those involved in its construction and permanent jobs created to service the new buildings and inducted by new resident spending. Based on job creation estimates from studies of New York’s affordable housing construction in the last decade,[iv] combined with the additional jobs for building units in lower Manhattan, a reasonable estimate is that this program would create 988,000 short-term job-years of employment, (With a higher federal dollar match multiplier, there would be a total of 2.2 million short-term job-years.) Maintenance and related services for the new buildings and local jobs induced by spending by those new residents would lead to an estimated 177,000 permanent jobs in the city (396,000 permanent jobs with the less conservative assumptions).
The goal will be to ensure that these are good union jobs and expand the declining number of decent-paying jobs for middle-skill workers in the New York economy. De facto, the program will use the luxury housing spending demand of rich New Yorkers to fund middle class employment that in turn will help house lower income families. Adding in strong construction apprenticeship programs to train and employ low-income residents in that construction process will create a pathway for many low-income youth into the middle class themselves.
More broadly, expanding affordable housing -- and instituting other reforms to make market-rate housing more affordable as well – will help attract new companies and industries, who are currently scared off by high housing costs for their employees, to locate in New York City. 64% of companies in one survey of New York employers said housing costs undermined efforts to recruit employees and 79% believed those costs inhibited the formation of new firms.[v] In a study of the emerging technology sector, a report by the Center for an Urban Future found that many firms saw significant limits to expanding operations in New York due to housing costs. As the report argues, “New York City’s exorbitant housing costs aren’t typically thought of as a tech issue, but it will likely provide a key obstacle to the city’s goal of increasing the pool of top-tier engineers.”[vi] What’s true for the tech sector is true for a range of other emerging sectors, from small batch manufacturing to export firms to the health care sector. Lowering housing costs, combined with New York City’s acknowledged advantages, would significantly increase its attractiveness for a range of industries looking to startup new companies or establish new branches.
[i] Center for an Urban Future, 2012.
[ii] Fiscal Policy Institute, 2012.