By Nick Trokel
New York’s housing shortage is well-documented. It’s estimated that the city will need to create 560,000 new units by 2030 just to make up for the lack of new construction since 2012. The unit shortage means that rents for the median available apartments in NYC have gone up by more than 300% since 1990. Everyone feels the effects of this phenomenon, but people at the lower end of the income spectrum feel it most acutely: more than half of individuals making less than $60,000 per year are spending 60% or more of their income on rent. New York City must liberalize the housing code to increase housing supply and meet the massive demand for homes.
To move forward on this issue, the city should legalize singe-room occupancy (SRO) housing. SROs can range from a series of bedrooms around a communal kitchen to a “micro-unit” with a kitchen and bathroom inside. SROs have major benefits: They are cheap for renters and developers and use the city’s limited space efficiently. Additionally, in a political environment where new housing policies can be difficult to pass, legalizing SROs would be relatively easy.
SROs were common in New York City until the 1950s. In 1955, the City Council banned the construction of new SRO units, trying to discourage excessive density and encourage the construction of single-family housing in the outer boroughs. Some SRO units still exist in New York City, either through illegal subdivision of existing housing or from legacy units built prior to the ban. Currently, around 30,000 people are living in legal SRO units, a tiny fraction of the 1.2 million renters living alone in New York.
The key benefit of SROs is their low cost, both to developers and to potential renters. Developers will see more bang for their buck, as each SRO unit costs 20% less to develop than an equivalent studio or one bedroom. The median rent for an SRO is more than $1,000 lower per month than the current prices for studios, easing the burden of rent on their budgets, according to estimates from NYU’s Furman Center.
Because SROs have low square footage, the buildings containing these units will be dense, making the best use of expensive land in NYC. The Furman Center analysis suggests that an SRO-focused building could have 251 units, while a comparable building full of studios would only have 126. More units in individual buildings would move the city towards meeting that 560,000-unit goal by 2030, and the larger amount of supply provided would lower costs more quickly than less dense buildings.
Despite the urgency of the shortage, passing housing reform has proven difficult for New York’s state government. Governor Kathy Hochul’s Housing Compact, a package of bills aimed at facilitating new development, failed in Albany this year. Legalizing SROs, by contrast, is a straightforward legislative project. Most solutions to housing costs require spending large amounts of public money, or can be slowed by input from the ever-present “Not In My Backyard” movement freezing reform. Legalizing SROs would only require the City Council to make one amendment to the city’s code. No planning boards, no community meetings, no tax burden.
In the past, New Yorkers have voiced concerns that SROs are not high quality housing, and could offer substandard living conditions. The units had a bad reputation in the 70s and 80s, and became a symbol of the city’s struggles with poverty and crime. The city should take this history into account, rigorously applying housing regulations on required services, amenities, and occupancy rules to protect tenants.
Bringing back SROs is just one small part in a large set of policy interventions required to improve housing conditions in New York. Other zoning reforms, as well as increased investment in public housing, are also necessary. But given the scale of the crisis, the city should take a “yes, and” approach to policies that lower costs. Today, New York is failing its residents with an illogical, outdated zoning code that constrains the supply of housing. The city should do everything in its power to put roofs over people’s heads, and legalizing SROs would be a meaningful first step.
Nick Trokel is a master’s degree candidate at Wagner, concentrating on Policy Analysis. He grew up in New York City, and has worked in Washington D.C. non-profits advocating for tax reform and sustainability.
