Tri-state area of New York, New Jersey and Connecticut could face a housing shortage of 920,000 units by 2035 regional planning association (RPA) discovery.This analysis was performed by McKinsey & Companyhighlighting the region’s current housing shortage of 540,000 units.
The report states that in order to address this looming crisis, the pace of construction needs to accelerate significantly. To fully close the gap between supply and demand, the region would need to build homes at the same pace as in the decades after World War II.
“Public and private sector leaders broadly recognize the need to expand our regional housing market, but this report provides novel insights into the long-term economic damage associated if we fail to act quickly to address this challenge,” Tom Rei Te, president and CEO of the Regional Plan Association, said in a statement.
“This report highlights the tremendous long-term benefits of reversing the affordable housing shortage, from improving affordability to increasing our workforce and gross domestic product. To ensure our regional economy remains vibrant and competitive with other global centers, We must act quickly to organize critical investments and innovative partnerships to increase housing stock.
According to its website, RPA is an independent nonprofit organization that “develops and promotes ideas that improve the economic health, environmental resiliency, and quality of life of the New York metropolitan area.” It conducts research on environmental and land use policy, as well as government best practices, Provides advice to municipalities and public agencies.
If the region maintains its current rate of housing production until 2035, house prices could rise by 25% and the number of households bearing the cost could increase by 7.6% (or 260,000 households), disproportionately affecting lower-income households .
Additionally, the region could miss out on $900 billion in cumulative gross domestic product (GDP) growth by 2035 if the housing shortage is not addressed, research shows. and local taxes.
It also creates problems in terms of job creation. If the housing shortage is not resolved, the region could lose 730,000 jobs.
Based on current projections, employers may have difficulty attracting and retaining workers, which could result in them leaving the area or reducing their workforce. High housing costs and limited housing supply may force residents to relocate to more affordable areas with better opportunities, leading to population decline and lower quality of life.
The report found that solving the tri-state area’s housing shortage would require an annual investment of $60 billion by 2035 to reach post-World War II productivity levels.
