As a planning student in the 1960s The Death and Life of Great American Cities was one of my favourite books. Despite Jane Jacobs’ dislike of town planners, it was difficult to disagree with her prescriptions for what a vibrant city should be, even if her rather libertarian views meant that when she called for mixed communities she didn’t want these to be provided through social housing. It’s probably fortunate for her native New York that not all of her views took hold. In a country that’s famously wary of social provision, the New York City Housing Authority still has 178,000 apartments for New Yorkers on low incomes, including over 50,000 in Manhattan. It also has over 90,000 leased units in the private sector.
New York University’s Furman Centre, which specialises in urban policy, has just published its regular report on The State of New York City’s Housing and Neighbourhoods. Perhaps surprisingly, this shows that most of the city’s population lives in apartments that are protected from market rent levels. Two-thirds of New Yorkers are tenants, and the chart shows that while 16% live in public sector units, a further 45% have rents that are controlled in some way. This leaves only 38% paying full market rents. The size of the sub-market sector even seems to restrain rents overall: in the period 2007-11 (admittedly a time when US house prices fell by 20%), average rents in the city rose by only 8.5%.
This is not to say that rents in general are easily affordable – median rents have now edged up to 32.5% of incomes, with half of tenants having to pay more than 50% of their incomes in rent. The implications have been considered by the New York Times Magazine, which begins its story by speaking to the proprietor of a downtown grocery store. He explains how his customers used to come equally from rich and poor neighbourhoods, but that many poorer residents have now moved further out of town to find cheaper housing. While the area is still mixed, the mix is under further threat: if New York City is forced by the federal government to deregulate rents, as many in Congress would like, the result could be that Manhattan ‘would quickly become an island occupied solely by middle class and rich people’.
The magazine makes the point that effectively there are two markets in Manhattan, one that is subsidised or regulated and one where rents can hit the stratosphere. And some tenants in the former can, by accident, have healthy enough incomes to be able to afford full market rents yet they still enjoy regulated ones. But, however imperfect, the rent regulations first introduced in the 1940s have a key role in maintaining the social mix. The article concludes with a question and an answer. ‘What happens if all the rich people are on one island and the poor but creative are somewhere else? It might just destroy the strange admixture that makes Manhattan so appealing in the first place.’
The read-across from New York to London may not hold up in detail, but perhaps there are some common warning signs. London’s tenure pattern is different: it is almost equally split between homeowners and tenants. Of the latter, just under half are social tenants. And of the private tenants, about one-third receive housing benefit. In other words, in round terms about 30% of Londoners have rent-controlled or subsidised housing, whereas for New Yorkers the proportion is about 40%.
Of course, there are all sorts of problems in comparing two cities with different histories and economic contexts, but New York and London undoubtedly have issues in common: pressures from population growth and migration, ethnically diverse populations, and large rented sectors (compared with the rest of either the US or the UK) catering for more mobile populations and widely ranging income levels.
So far, both cities have retained their mix of incomes and (as the New York Times points out) this is crucially dependent on the housing mix: if more of the stock is sold or rented at full market rates, poorer people will move out and community diversity will be lost. New York has the advantage that a higher proportion of residents still enjoy sub-market housing costs. In London’s case, not only is the proportion already lower but a range of policies are making it worse: selling social stock or converting it to market or near-market rents, restrictions on local housing allowances and other features of welfare reform, and the failure to build enough new social housing. Given the evidence that lower-income households are already being forced to leave inner London, the case for looking at ways to restrain private sector rents – as well to maintain the supply of social housing – has never been stronger. The fact that coalition politicians are either indifferent to the implications of their policies for the capital city, or even actively welcome them, is deeply depressing. Perhaps selected chapters of Jane Jacobs’ great book should have been on their holiday reading lists.