The Macro Forces Impacting Housing Affordability In the Hudson Valley
Here Is My Thesis: If we don’t take immediate and scaled steps to stabilize, protect, and actively supply side manage housing affordability in Kingston, we will see the cost of housing soar in the coming years. As housing prices rise, it will limit who can afford to live here, pushing many current residents out, and resulting in Kingston losing our cultural, racial, and economic diversity.
I believe there is an oportunity to take a deep and wide, ambitious approach to actively managing the affordability of housing in Kingston. I think if we do it right, it will make Kingston one of the most desirable places to live in the region.
Background: The macro social-migration, housing development, and economic trends that have lead to a shortage of housing in cities nationwide
First, let’s talk about what got us into this situation — where affordable housing is a defining issue of our time.
The fundamentals of what is leading to a lack of quality affordable housing in Kingston, and cities around North America is a complex combination of factors. At the heart of the issue, we find a classic supply and demand imbalance, which has been decades in the making
For approximately 30 years, between 1950 and 1980, there was a government sponsored exodus of [white] people from cities all over the country. This lead to there being an excess of housing stock in American cities. These out-migration trends reversed around 1980, and cities’ populations have been steadily rising for the last 40 years.
Urbanist Alan Ehrenhalt calls this change “The Great Inversion,” a shift where cities and suburbs have traded places over the last four decades. Generation x and y’ers have been moving to the large cities in droves, but especially the urban centers on the three coasts — San Fransisco, Seattle, New Orleans, New York City, Boston, Los Angelas, Washington D.C., etc.
The job market has changed as well. In 1978, the U.S.’s manufacturing employment peaked, and in the decades since factories have left US cities, seeking cheaper labor (mostly abroad).
The expectation of lifetime employment with one company has long since faded. Today, many generation X and Y workers derive their long-term “job security” from a large network of social and professional ties that lasts from one company to the next. The density of cities favors this regular employment movement.
The barrier to entry for entrepreneurship has also plummeted. The capital costs needed to found a company and launch a minimum viable product are much lower than just a decade ago, let alone a generation ago.
The reason this all has lead to an affordable housing crises in nearly every large city in North America, is that while people have been moving back to the cities, we have not been building anywhere near enough new housing.
As one example, From 2010 to 2015, Los Angela, CA added 157,900 new jobs and 236,318 residents. The number of new units of housing added during the same time period didn’t even come close to keeping up — 40,014 units — or one new home for about every 5.9 new residents
Similar stories can be found in the numbers about every other major city on the coasts.
This has created supply side pressure, which has driven up housing prices. This market context has in turn raised the stakes for landlords and developers to flip rent controlled units to market rate, either by eviction or lease buyout, among other predatory practices of getting people out of their homes.
While most large coastal cities in the US have realized they have a housing supply crisis, and are trying to build their way out of it, in most cases they are just too late. They are short too many units of housing. Even the aggressive development targets set by mayors (like in NYC and LA) are not adequate to stabilize rental pricing, let alone lower prices.
As the cost of housing has crossed over thresholds of un-affordability in large cities, a new exodus has been triggered. Class privileged college educated knowledge workers employed in high paying industries (tech, design, finance, etc) are still flocking to these cities, but tens of thousands of people are also being priced out, and push out. Many of these cities (San Fransisco, LA, Seattle) are transitioning from being socioeconomically diverse spaces, to having two classes of citizens: upper-class knowledge workers living in market rate housing, and a service class, living in rent controlled or subsidized affordable housing. Cultural diversity is what helped make these cities great, and their lack of affordability is gutting out their social souls and culture.
From One City Another
As people are being priced out of the tier one cities, or choosing to leave them because they don’t like how their cultural landscapes is changing, most are moving to one of three places:
- The suburbs outside of the city they are being priced out of, then commuting back into the urban core for work
- Another large metropolitan area, elsewhere in in country, usually in the south or mid-west (e.g. Houston, or Minneapolis) where the cost of living is still affordable
- A smaller city, in the region of the large city they have been priced out of
This last one is what is one of the reasons why we are seeing so many people move from NYC to the Hudson Valley in the last few years.
State of Housing in Kingston — The Early Stages of an Affordability Crises
Kingston already has the early stages of an affordable housing crisis in motion. In 2009, Ulster County adopted the Three County Housing Assessment Needs Study, which stipulated that to meet the affordable housing gap, the City of Kingston would need to build 1,005 units of affordable housing by 2020. Since that report was published, the city has only added 55 units of affordable housing.
That study is almost a decade old, and was executed before the rate of Brooklyn-to-Kingston migration really hit its stride. Chances are that given the accelerated rates at which people have been relocating to Kingston in the last few years, the number of additional affordable units needed is even larger than projected in the report.
In 2017, 35% of households in the Kingston metro area could not afford the median price of housing. The subset of the population that is feeling this presure the most, is the 38% of Kingstonians who rent, who as a group, have half the median income of home owners in the area.
Cost of Living Makes or Breaks a City’s Culture, because it changes who can live there.
A city’s residences access to affordable housing is the cornerstone to the urban space being diverse, and socially and economically vibrant.
The widely held definition of housing affordability, is for any given resident/household, if they are spending more than 30% of their take home income on housing, they are housing insecure.
Anyone paying more than 30% will likely face challenges providing their family with the rest of basic necessities at a good standard of living — quality food, transportation, access to healthcare, education, etc. Households that are paying more than 30% also have little or no disposable income, so they are not able to participate fully in the local economy.
People who don’t have access to quality affordable housing lead lives that are measurably harder than if they had access to housing that cost less than 30% of their income.
One of the core challenges is that many of the forces causing the lack of affordable housing in Kingston are macro (regional and national trends), but the solutions have to be developed at the municipal scale (with the support of county and state governments).
As a city, and a community, if we take some ambitious and immediate steps to actively managing the affordability of housing in Kingston, I think we can increase the standard of living here, while maintaining affordability. This would in turn fuel economic development as a diverse group people, entrepreneurs, and buinesses base themselves in Kingston because of the city’s high quality of life.
Kingston is going to change in the coming years, the question is whether we are going to take an active role in managing that change, so that Kingston can be an inclusive, charming, and truly modern small city.
Sean Ritchey 