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In defense of the NYC "poor door"

View Pictures/Universal Images

For weeks now, my inbox and various social feeds have been full of stories of people outraged about the New York City building featuring an alleged "poor door."

I get that people like this story because the idea of a single building with two different doors — one for the super-rich and one for the normals — works as a potent metaphor. But the building is not a metaphor. It is, in fact, a building. A building in which people live. A building whose construction employs people, and whose existence expands the New York City tax base. Even better, it's a building that created subsidized dwellings in a desirable location for 55 lucky families. The serious problems with housing policy in America have nothing to do with poor doors and everything to do with the literally millions of people in the New York area who aren't lucky enough to get a subsidized unit on the Upper West Side.

Origins of the poor door

The first thing to note about the poor door is that the typical building in Manhattan has no need of separate entrances for rich and poor because the main entrance is only for rich people. The poor door issue arises because of inclusionary zoning policies that reward developers for building subsidized units, or penalize them for failing to do so.

The project in question, 40 Riverside, located at 76th Street and Riverside Drive, consists of over 200 market rate (which is to say very expensive) new condominiums and also features 55 rental units that are available at something like a 75 percent discount relative to market rates.

Had the developer simply built two different buildings — one a profitable condo sold at market rates to rich people, the other a money-losing rental leased at discount rates to poor people — nobody would be complaining that the two buildings have separate doors. Instead for some kind of architectural or engineering reason, they chose to make it a single structure with two separate entrance points. Either way, the 55 families getting a steeply discounted Manhattan rental are getting a great deal.

A mixed-up policy

The real problem with the New York City Inclusionary Housing law isn't that the 55 units it's created here don't have the same door as the luxury units. It's that adding subsidized housing in dribs and drabs isn't going to address the city's severe housing prices.

Inclusionary policies of this kind blend together two policy ideas and do neither of them very well. One is redistribution. In effect, the buyers of the market rate condos are being taxed to finance a subsidy to the renters of the affordable apartments. Soak the rich to subsidize the poor. It's a reasonable idea. But the only rich people being taxed are the tiny minority of rich people who happen to be buying into a brand-new luxury tower. Rich brownstone owners in Brooklyn are unscathed. So are residents of fancy prewar buildings on 5th Avenue. And early adopters of the loft conversion trend in Soho. With such a narrow tax base, you don't raise much revenue and thus can't help very many poor people.

The other policy aim here is housing supply. Ultimately, the number of people who can afford to live in New York City is a function of the number of housing units that exist in the city. For more people to afford NYC, there needs to be more housing in NYC for people to live in. The most straightforward way to do this is to change the zoning codeto allow for the construction of more and denser buildings. Despite Michael Bloomberg's reputation as a pro-developer mayor, he actually presided over massive downzonings in many outlying areas of the city that have made it harder than ever to add new supply. Even new luxury units in Manhattan do something to increase affordability, and reversing Bloomberg-era policies in the Outer Boroughs could unleash substantial new accessible development all around the city.

Then if you feel low-income people still need more help, you can tax all rich people and subsidize all poor people.

Pity the doorless

The real victims of this policy dynamic are not the 55 families who'll enjoy discount rent on the Upper West Side. The real victims are every economically struggling New Yorker who doesn't get the discount. Currently, access to subsidized "inclusionary" units in New York isn't just limited by income. Even families who are poor enough to quality need to enter lotteries to try to get a place to live. There simply isn't enough housing to go around.

This is a problem in New York City, but also in the city's suburbs. In San Francisco and in Silicon Valley. In Boston and its suburbs and in Washington, DC and Seattle. It causes hardship for individual families, and economists estimate it costs the overall national economy billions of dollars in lost economic growth by forcing people out of highly-productive dense metropolitan areas and into ones where their labor is less valuable.

It's a national scandal. And if talk about a door spurs meaningful change, that will be great. But the fury over something as superficial as a building entrance is a waste of time. The real issue is the systematic underprovision of housing in the country's most desirable cities and suburbs.

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