Incentivising the market to build affordable housing: The New York City toolkit

Abstract

Affordable housing is among the biggest policy challenges facing cities worldwide. Treating New York City as a case study, this paper reviews a multifaceted toolkit to combat the housing crisis. Specifically, the analysis focuses on how the government incentivises real estate developers to build affordable housing, with both financial incentives such as tax abatements, tax credits and loans funded by tax-exempt bonds and non-financial means such as zoning regulations. The study demonstrates both the successes achieved by New York City and the unintended consequences that emerged from these interventions, and the research argues that beyond financial and economic considerations, long-range spatial planning factors play a pivotal role in the formulation of effective affordable housing policies. The research underscores the need for policy makers globally to take a holistic approach and integrate various elements of city growth to address the intricate challenges posed by housing crises in urban environments.