Here on Guernsey in the Channel Islands between England and France, where my wife and I have just spent the week-end with our daughter and son-in-law, the residential property market is bifurcated. There is a Local Only designation on about 75% of the houses and apartments, which can only be occupied by natives of Guernsey, their spouses, those whose ancestors have lived here in the past, or those whose presence is deemed “essential” to the community (As the intricacies of this system were explained to me by our taxi driver I almost certainly do not have all the details correct!) I found this idea fascinating. The goal, increasingly significant since Guernsey has become an international tax haven, is to make sure an adequate supply of property remains within the financial reach of local residents. However, even the Local Only housing is expensive and locals like my cab driver are hard pressed to afford it (he is working two jobs, 90 hours a week, to help carry his £1500 per month mortgage.) Even in an artificially controlled environment, market forces are still at work.
In New York we have no Local Only housing. And one of the great things about our city is that every year the number of locals expands as people arrive from all over the world to become New Yorkers. Still, the market we, as brokers at Warburg and similar firms, serve represents a small triangle at the top of the wealth pyramid. Many who grew up in Manhattan cannot afford to return there as adults, especially if they have chosen careers in teaching or the social services. And increasingly the vast majority of those working in the city cannot afford to live in it, or even near it. Most of the members of my administrative staff commute at least an hour and a half each way to ensure that they have adequate home space for their families.
Does this bode well for the future of our city? The loss of tax incentives in recent years has discouraged many developers from building subsidized housing, which our city sorely needs. A change in the fate of Stuyvesant Town could further deplete the stock of middle income housing available in Manhattan. I am a strong believer in paying attention to market forces but also to the importance of diversity, ethnic and financial, in keeping New York vital and dynamic. Some form of intervention must guarantee that residential opportunities exist in New York for middle class housing, intervention which is fair to tenants, landlords, and owners alike. Because we need to figure out how to protect our own hard pressed locals. They represent both our history and our ever changing face. We need them here.