Fifty-one percent of New Yorkers say that the cost of living is our state’s top problem.
The affordability crisis and middle-class squeeze are driving populist anger as well as population outflows to lower-cost and lower-taxed states. Centrist Democrats need to develop signature solutions to the affordability crisis that disrupt the status quo and advance policies that work with – and not against – market forces. Here are three ways to address affordability:
Increase Housing Supply in New York City
New York is wrestling with a problem of its own making when it comes to housing costs. With a vacancy rate of around 1%, New York City has 25,000 rent-stabilized apartments that are currently being withheld from the market due to a 2019 law that had the unintended consequence of requiring landlords to make necessary upgrades without allowing them to recoup their investments through sufficient state grants or modest rent increases to cover the costs. This is counter-productive to the overall goal of increasing housing supply to meet demand.
In addition, a majority of NYC’s residential land is zoned for detached single- and two-family homes, making the mid-rise walkups that once defined Brooklyn and Queens effectively illegal to construct today. This is the “missing middle” – the human-scale housing that housed generations of teachers, nurses and tradespeople. Rezoning transit corridors in eastern Queens, Staten Island and the outer Bronx for mid-rise construction, slashing parking minimums, and empowering small developers would bring more housing online.
For all the debate and moving targets for the pied-a-terre tax, New York City should focus its efforts on vacant foreign-owned apartments, which function more as global investment vaults than housing. The number of foreign-owned, non-occupied apartments amount to as much as 15 thousand units citywide. Raising the property tax on these units from 1% to 5% – a level comparable to vacant non-resident levies in Vancouver, Singapore and Paris – would yield an increase of nearly a billion in new revenue. This shift in policy would encourage these dormant units to return to the residential market.
On Long Island and upstate, aging strip malls can be revitalized by amending existing housing tax credits to incentivize developers to turn malls into mixed-use commercial and residential. These malls have all the makings for a “popup community” that would allow people to live closer to where they work. They come with existing sewer and transportation access creating an adjunct to traditional downtown areas while preserving open spaces. A significant portion of this new housing should be set aside for police, fire, EMS, nurses and veterans as an expansion of the HELPERS bill, which would reduce opposition to affordable housing in these suburban and exurban communities.
Lower Insurance Costs for State Residents
New Yorkers face insurance premiums that average 15% higher than the rest of the country, with health insurance running 12% higher and auto coverage costs 52% above national rates. These elevated costs stem from outdated laws and litigation practices that expose businesses and institutions to excessive legal liability. For example, medical malpractice payouts significantly exceed other states, driving up healthcare premiums, while auto insurance fraud affects 60-70% of claims processed by major insurers. Small businesses also face waves of serial lawsuits, including accessibility claims where single plaintiffs have filed over 100 lawsuits.
The Partnership for New York has proposed reforms which would align New York’s legal standards with national norms while preserving worker protections and safety. Key recommendations include replacing absolute liability with negligence standards used nationwide, capping non-economic damages in medical malpractice cases, and enacting legislation to combat staged accidents and insurance fraud. Gov. Kathy Hochul has started to take action in this direction, showing real leadership. These reforms would lower insurance costs for residents, businesses and local governments while maintaining appropriate protections and compliance with basic safety and accessibility standards.
Become a Net Energy Exporter by 2040
Energy costs are skyrocketing in New York and across the nation. The Republican Congress gutted federal support for clean energy investments – particularly wind and solar – leaving nuclear power as the only clean power source with bipartisan consensus. While location matters – and NYC and Long Island don’t make sense because of their density and relative lack of egress – upstate New York is well situated for new nuclear power construction, including small modular reactors to offset data centers’ energy consumption.
Hochul has been a leader in her commitment to build a new 1-gigawatt nuclear power plant – but the real impact is in the market message it sends that the state will not obstruct new nuclear energy power. We can use decommissioned coal plants upstate to ease siting but there needs to be construction of a smart-grid to transfer energy downstate, where consumption is highest, fueling the artificial-intelligence revolution while cutting skyrocketing monthly energy bills. New York State should aim to be a net energy exporter by 2040.
These are concrete plans to address the affordability crisis in New York, part of a broader agenda to renew New York that I have written about in the NY Post, including High Speed Rail to connect our state and political reforms including open primaries. We need to get New York back in the business of building again, growing our way out of deficits rather than continually trying to raise taxes and fees that add to the affordability pressures that drive working families to other states with lower taxes and higher quality of life. The status quo is unsustainable but the Empire State can rise again if we approach our problems with ambition and discipline, ushering in a new era of growth and reform in New York.