In New York City, rent is growing faster than wages. Households throughout the state are outraged at proposed increases to their utility bills. As a result of rising costs, New York has experienced net domestic outmigration of nearly one million residents since 2020.
This exodus is evidence of blue-state policy failure, featuring counterproductive regulations that exacerbate the cost-of-living crisis and push more New Yorkers to leave the state, especially young people. To reverse the trend, New York legislators should repeal costly and ineffective regulations. They can start with the All Electric Buildings Act, a measure that moderate Democrats are already pushing to delay, understanding that New York is suffering from an affordability crisis.
New York State lost one congressional seat as result of the 2020 census. It is projected to lose two additional congressional seats, and the corresponding votes in the electoral college, following the 2030 census.
To be fair, some of the outmigration is part of a broader demographic shift in which retirees are moving to states with policies tailored to reduce costs for them. These states also benefit from more moderate winters and more sunshine. Because New York legislators cannot do anything about the weather, they need to focus on policies that will meaningfully reduce the cost of living and create new economic opportunities.
As Ezra Klein and Derek Thompson argued in the bestselling book “Abundance,” scarcity politics threaten blue states’ fiscal sustainability and national political influence. Policies that exacerbate affordability crises are pushing residents toward more affordable Republican-majority states. As a result, red states like Texas, Florida, Tennessee, and North Carolina are gaining population, growing faster economically, and set to wield more national political power.
State legislators have continued to pursue ineffective policies that discourage growth in the housing supply and increase rents for New Yorkers. These policies have been particularly damaging to lower income renters. Over the last decade, adjusting for inflation, median housing prices in the Syracuse, Buffalo, and Rochester metro areas have risen by at least 45 percent, according to Zillow’s Home Value Index. At the same time, median rents have risen by 23 percent. This artificial scarcity has been great for homeowners and landlords who have seen their property values rise, but no one should be surprised when young New Yorkers decide to move somewhere more affordable.
Ideally, New York legislators would help increase the supply of housing through better policy that makes it easier to build new units. From 2012 to 2022, New York’s housing supply only increased by 5.7 percent. Over the same time period, the number of housing units in Texas and Florida grew by 19.5 percent and 13.6 percent, respectively. Although rents have generally risen everywhere after 2020, Austin’s rents have now fallen 17 percent off of their recent high as housing supply has expanded rapidly. In real terms, Austin’s rents have been nearly flat over the last decade, even though the population increased by nearly 10 percent. Throughout New York, in contrast, higher rents have persisted, and they will continue to rise without new housing developments to drive them down.
If legislators are not going to pursue more aggressive measures to increase the housing supply, they should at least refrain from imposing burdensome mandates that will increase the cost of building homes. In 2023, state legislators passed the All Electric Buildings Act. Starting in 2026, the law will forbid new buildings under seven stories to have natural gas hook ups. In 2029, this mandate will expand to larger buildings as well.
This policy will raise the cost of new construction and delay the construction of new housing. It will also increase the demands placed on the electrical grid, at a time when supply is already struggling to keep pace and ratepayers are burdened by rising utility rates.
Albany should delay the implementation of these mandates or scrap them entirely. In the short run, these mandates are not going to meaningfully help advance the state’s sustainability goals. Only about 11 percent of all emissions come from residential energy use, and these policies will only marginally reduce emissions for new builds — a trivial amount of New York’s total housing stock. Meanwhile, these policies will significantly slow the development of new housing.
If these policies go into effect, the state’s reduction in carbon emissions will come more from New Yorkers leaving and taking their energy consumption with them than from the efficiency gains of new units.
New York needs to invest in new infrastructure to meet its climate goals and meet demand for fast growing industry. These investments will lead to higher costs for ratepayers. It is prudent that legislators grapple with what these costs mean for their constituents and ensure that all new upgrades fuel economic growth and help wages to grow faster than their constituents’ bills. Albany must prioritize cost-of-living issues that are devastating New Yorkers today and delay or eliminate costly mandates that will exacerbate this crisis.
