Eight years ago, the city of Albany required that 5 percent of units in projects with 50 or more units be affordable to the working class. The measure was modest enough that it did not appear to slow housing production.
But then Albany’s progressive Common Council got greedy. Overriding vetoes by the mayor, in 2023, it upped the requirement to 7 percent to 13 percent, with larger projects requiring a higher share of affordable units, as well as the maximum rents lowered for those units.
This made multifamily development in Albany infeasible.
“Since the Common Council overrode my two vetoes in early 2023, new proposals for market-rate housing have decreased by 71 percent,” Mayor Kathy Sheehan said last year in her State of the City address.
It’s only gotten worse since. “Before the change, the city had thousands of market-rate apartments in the pipeline; after, they have almost entirely disappeared,” Times Union columnist Chris Churchill wrote this month.
Without new homes absorbing demand and competing for tenants, Albany landlords will be able to demand higher rents than they otherwise could. Churchill noted that the “disastrous law” was “designed to make Albany more affordable but threatens the opposite.”
Sheehan has continued to urge the council to undo the policy, but her mayoralty will end this year without that happening.
Albany Council members have obviously not read the bestseller “Abundance,” which journalists Ezra Klein and Derek Thompson wrote to persuade fellow liberals to let America build the way it once did — and the way other nations now do.
Klein and Thompson opined that Donald Trump’s election was aided by progressives’ not providing enough of what Americans need. One key failure was not building enough housing.
Liberals have famously choked production in high-demand cities such as New York, Los Angeles and San Francisco with restrictive zoning, thick bureaucracy and a mind-boggling array of regulations and mandates. (Conservatives have done the same in blue states’ NIMBY suburbs.)
New York got 322,000 new homes in the 1950s and 369,000 in the ’60s before a citywide downzoning kicked in. In the next five decades, the average production was 144,000. Meager production was understandable when demand to live in the city was weak, but it was incredibly strong in the 2010s and yet only 169,000 units were built.
Progressive politicians have belatedly begun to realize that more supply is essential to solving the housing crisis. But they still reduce the effectiveness of their own efforts to boost housing production, and sometimes wipe it out completely, as Albany did.
In New York City from 2014 to 2021, the de Blasio administration upzoned eight neighborhoods, but capped rents in at least 25 percent of apartments built on any upzoned parcel citywide.
This policy, Mandatory Inclusionary Housing, proved feasible in strong markets but not in weak ones. It also forced developers to seek higher rents in MIH projects’ market-rate units to subsidize the affordable ones.
It takes votes to pass pro-housing measures, and many laws would not have been approved by left-leaning legislatures without the political cover of affordability requirements and other feel-good provisions. But as Klein and Thompson explain in their book, these add-ons went too far.
“In California broadly, and San Francisco specifically,” they wrote, “dozens of pro-housing bills have not led to the construction of more homes in part because those bills are layered with additional requirements and standards that builders must meet in order to take advantage of the newly streamlined processes.”
The authors concluded, “For developers we spoke with, the added costs of compliance weren’t worth it.”
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