Unoccupy Occupancy Laws

 The future returns (pinterest)

The future returns (pinterest)

NYC Housing Policy Tools Series

Over the next few weeks, as we prepare for the Trump Era, I will spend time on various housing policies in NYC in order to help frame the the affordable housing crisis.  I have picked four topics related to NYC housing laws: rent regulation, zoning, occupancy, and property taxes.  I concede that there are other policy tools that could be included (particularly around financing) but these four tend to have an immediate impact on the most people.  The hope for this blog series is to explain the current policy tool kit in New York, but also to show why questioning the underlying assumptions about housing policy might be able to expand it. 

Part 3 of 4: Unoccupy Occupancy Laws

No good deed goes unpunished and I submit NYC’s occupancy laws as a good example.  Before we get to that, it’s important to know how miserable live in New York actually was less than 100 years ago – loud, dirty elevated trains; waste-ravaged streets; overcrowded, dank tenements.  Urban life for most people would look positively barbaric to New Yorkers today.  Improved technology, greater public health awareness, and socio-economic shifts radically changed the built environment of NYC, but that all happened because of active governance.

Occupancy laws - a blanket statement for multiple-dwelling law and housing maintenance law - from the first several decades of the 20th century reshaped how New Yorkers lived for the better.  The famous tenements of the Lower East Side made it one of the densest habitats on the earth, ripe with disease, malnutrition, and other physical dangers.  The city simply couldn’t sustain such a careless and inhumane growth trajectory.  

Progressives of the time created our modern occupancy laws to protect individuals and families from economic and environmental exploitation while protecting the broader public body from gross health and safety risks.  They did this by passing laws requiring basic amenities like natural light and windows, guaranteed heat and water, sanitary bathrooms, fire escapes, and other things we take for granted today.

Modern urban life would be intolerable, even impossible, without these types of far-reaching policies.  We are so accustomed to certain benefits of government intervention like this that we forget how necessary it was – and is.  Our private lives are vastly improved by sound public policy.

However, a byproduct of that amnesia is the slow, deliberate shift in our public policy from inclusive public good to exclusive private gain.  Here’s where the good deed of occupancy laws gets punished.  

NYC used to have a staggering variety of housing options.  Single residency occupants (SROs), boarding houses, and long-term hotels, private room rentals – all allowed residents across any income spectrum options to live affordably, if not luxuriously. These types of housing also fostered a deep, shared connection and sense of community, particularly among immigrant populations and transient workers.  This type of social capital was the bedrock of American society and kindled its economic progress.

Starting in the late 1950s, and especially in the 1960s and 1970s - when the city faced the crippling social and economic effects of deindustrialization – incumbent residents organized against these types of housing.  Some of this trend is an understandable, if ultimately uncompassionate, response to increased drug and criminal activity.  Neighborhoods didn’t like having SROs and boarding houses around because they were housing-as-last-resort for many disabled or addicted New Yorkers.  The corresponding social problems could have an economic cost to property values (though there isn’t much evidence of this.)

These residents responded by advocating for and succeeding in changing occupancy laws.  Most SROs and boarding houses were officially outlawed and have utterly disappeared over the following decades.  Renting out private dwellings – like basements and attics - was radically cracked down on.  Minimum room sizes and unit sizes were enacted. And finally, in 1987, apartments were no longer allowed to be constructed without full kitchens, bathrooms, and at least 400 sq. feet of space.

I’ve already discussed how rent laws and zoning laws have empowered the housing crisis, but occupancy laws are just as important.  When the city began its steady rebound by the 1990s, it didn’t have the housing flexibility it used to have during previous boom periods and we have all suffered as a result.  I believe the current and future demographics of NYC strongly indicate that an economic incentive does exist for amending our occupancy laws.  There are two broad trends that support this. 

First, a lot of New Yorkers live alone.  In 1960, 185,000 New Yorkers lived alone - today it is 1.8 million.  The housing stock is simply not designed for that type of isolated living.  We often lament the fact that too many commuters drive alone to and from work, clogging the roads and polluting our environment. I would argue that one person taking up so much space and resources is a similar economic and environmental ill (not to mention the impact of social isolation and loss of social capital).

Second, New Yorkers (like the rest of America) are aging.  1 in 5 Americans will be 65+ in twenty years and already 20% of New Yorkers are - up from 12% in 2000.  The cost of supporting an older population in isolated, dispensed homes is already causing panic in many health policy circles.  NYC is not prepared for this at all.

I should speak for a second on two related trends – Airbnb and shared housing.  Airbnb has gotten into trouble for violating many occupancy laws, but the primary one is having a non-resident live for less than 30 days in an apartment. They grossly overplayed their hand and have eaten crow in NYC (and other cities) but the basic problem for them is that their model turns a residency into a hotel. I don’t think amending occupancy laws should support this model at all.

Shared housing is sort of a niche millennial market at the moment with some notable big players toying with it.  It’s a sound concept and one in sync with many of the principles we share at homeBody.  The problem with shared housing in its current iteration is its limited reach and appeal.  It is prohibitively expensive to join one of these living arrangements.  Part of that is simple economics - marketing to a well-identified audience - younger, wealthier tech savvy workers who are more open to shared living experiences. But part of it is also practical reality – they have to work within a narrow lane of occupancy laws. 

This is also true of micro-apartments, an en vogue idea that has some sound concepts but relies, fatally in my opinion, on the status quo of occupancy laws.  To date, I don’t know of any efforts of these organizations to lobby for changing occupancy laws, but they would be strong partners to help.

I believe we should amend occupancy laws to encourage a return to more flexibility in the housing market.  Shared housing, micro-apartments, SROs, senior housing, combined-housing (different non-related demographics sharing) are all ideas that have succeeded in the past and are currently succeeding in small amounts in NYC and elsewhere. 

If someone new to the city/country wants to live closer to a job downtown cheaply and doesn’t mind sharing a bathroom and kitchen, why not? If a student wants a cheap (or even free) place near school that includes living with senior citizens, why not? If several families want to pool resources and share space, why not?

Experimenting with occupancy seems to me like a cheaper public policy tool than tax incentives (which we’ll cover next week) and a more equitable policy tool than current rent laws. This is not to say the basic public good initially ensured through occupancy laws should be relaxed – healthy and safety standards can be protected while still introducing more innovation.  This is a vastly under-explored topic that should get a fair shake in public policy discussions. Remembering why these types of laws were passed originally is a good start.