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Manhattan Institute

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More Housing For Better Public Transit

issue brief

More Housing For Better Public TransitA Grand Bargain For New York City

March 27, 2018
Urban PolicyHousingInfrastructure & TransportationNYC


New York City needs lots of additional private housing, but restrictive regulations make building it difficult. The city also requires better subways and buses, but the Metropolitan Transportation Authority (MTA), America’s largest public transit agency, is hampered by funding shortages as well as by poor management.

This paper suggests a housing–public transit “grand bargain”—used successfully, on a smaller scale, for Manhattan’s Hudson Yards development and elsewhere—that would help tackle both problems: it would allow larger residential buildings near public transit hubs across New York City in exchange for more money for the MTA. Specifically, it would relax zoning rules in return for one-time fees (“incentive zoning”) and the continuous higher property-tax revenue generated by larger buildings (“tax-increment financing”).

I estimate that a grand bargain would allow the building of roughly 411,000 new private housing units over 10 years, as well as generate some $54 billion in extra revenue for the MTA during the same period. About three-quarters of the city would retain current restrictive regulations on new developments, while New Yorkers of modest means—those who are increasingly pinched by high rents and low vacancy rates, and who depend on subways and buses to get to work—would especially benefit from the deal.



Alex Armlovich is an adjunct fellow at the Manhattan Institute. Follow him on Twitter here.