The difficulty of developing housing in New York City is as legendary as its cost. The city has had a vacancy rate under 5% — the legislative threshold defining a housing “emergency”—for more than 55 years. More than one commission or blue ribbon panel has identified government regulation as one of the primary causes of the housing problem. Since 2000, however, an opportunity presented itself to finally make some progress in reducing the cost of housing construction. Removing regulatory barriers to housing development caught the interest of two mayors—Rudolph Giuliani and Michael Bloomberg—and their respective housing commissioners.
In recent years, the federal government has increasingly relied upon states and cities to create and administer social policy. This paper examines available theory and evidence regarding the appropriate role of different levels of government, focusing in particular on the role of cities. Exploring the case of New York City, the paper also offers new empirical evidence on the extent to which investments in affordable housing can help to eliminate externalities and rebuild inner city communities. The authors conclude that although cities should play a major role in administering housing programs, they should only fund them under a limited set of circumstances. Redistribution of income, a major objective of most housing subsidy programs, should generally be paid for by the federal government, not cities. In contrast, cities should consider funding housing production programs when they are part of a comprehensive strategy either to remove negative externalities or to generate positive spillovers. The authors' empirical analysis of New York City's investment in new housing suggests that housing programs can generate significant external benefits to their neighborhoods. Thus, the results point to a potentially important role for cities, based upon the spillover effects of housing construction and rehabilitation in distressed neighborhoods.
In this paper we use a specially created data set for New York City to evaluate whether the context of children’s neighborhoods varies by their immigrant status, and, if so, whether the relationship between neighborhood context and immigrant status varies by children’s race and ethnicity. Overall, when compared to native-born children, immigrant children live in neighborhoods with higher rates of teenage fertility, and higher percentages of students in local schools scoring below grade level in math and of persons receiving AFDC, but lower rates of juvenile detention. However, further comparisons revealed that race/ethnicity is by far a more potent predictor of where children live than is immigrant status per se. Specifically, we find evidence of a hierarchy of access to advantageous neighborhoods, whereby native- and foreign-born white children have access to the most-advantaged neighborhoods while native-born black children consistently live in the least-advantaged neighborhoods, as measured by our four indicators. In between these extremes, the relative ranking of foreign-born black and native- and foreign-born Hispanic children varies, depending on the measure of the neighborhood context.