LI facing housing, workforce, brain drain crisis

An Avalon apartment development in Rockville Centre.

Even under the “most optimistic scenario,” Long Island will remain woefully short of rental housing over the next two decades, fueling a mounting loss of young people, a just-released study concludes.

The Long Island Multifamily Housing Study, conducted by NYC-based HR&A Advisors, and the nonprofit Regional Plan Association for the Rauch Foundation’s Long Island Index, concludes that existing plans for 26,000 multifamily units across the Island will still leave the region 72,000 units short of what it needs.

Indeed, potential development of an estimated 64,000 new housing units of any type – rental, townhouse, single-family, etc. – over the next 15 years, will leave the region almost 95,000 units short of projected demand.

Analyzing current trends, future housing demand and projected regional housing supplies, the study notes that the housing market here is already in bad shape, with a real and growing impact on millennials.

“The existing shortage of affordable rental housing is keeping young adults from striking out on their own and causing many to leave the Island,” the study states.

Over the last 25 years, for instance, Long Island’s 18-35 age cohort has declined 16 percent – faster than reported declines in Southwestern Connecticut and the Hudson Valley and nearly twice the reported decline in Northern New Jersey. New York City’s 18-34 cohort, meanwhile, has increased 8 percent, according to the study.

The study also reveals an “economic void” created by the departure of key industries from Long Island, reducing the number of available good-paying, upwardly mobile jobs. Employment reductions in manufacturing, which shed 46 percent of its local jobs between 1990 and 2010, and retail, which cut 26 percent of positions, led the decline, the study notes.

More grim news: Dragged down by those fewer good-paying jobs, average incomes have not kept pace with increasing regional home values, meaning more Long Islanders can’t afford to live here. Between 1997 and 2013, according to the study, Nassau County personal income levels increased 3.5 percent but home values increased 5 percent. In Suffolk during those same years, personal income levels increased 3.6 percent, but home values rose 5.2 percent.

Because of that increasing disparity, a higher percentage of Island residents are “rent burdened” – meaning they pay more than 30 percent of their household income toward housing – or “severely rent burdened,” with more than 50 percent of their income going to housing, the study says.

Long Island’s 57 percent “burdened” rate and 32 percent “severely burdened” rate easily outpaces numbers in NYC (52 percent and 29 percent) and the nation (48 percent and 24 percent).

It all leads to a pending housing crisis likely to affect young adults most severely. The study cites several causes, including stagnant housing production – tens of thousands of more single-family and multifamily building permits were issued between 1980 and 2015 in Northern New Jersey and the Hudson Valley than on Long Island – and a disproportionate percentage of new Island housing units pricing outside the “affordable range.”

“Both for-sale and rental developments are out of reach to many Long Islanders, requiring high down payments and high monthly rents,” the study says.

That doesn’t synch with Island residents’ changing housing preferences. According to the survey, 17 percent of Island residents live in multifamily units now – but 30 percent expect to live in a multifamily unit in five years.

It’s no surprise, then, that nearly 75 percent of the region’s young workers say they’re likely to move off Long Island by 2020, while two-thirds of residents between the ages of 50 and 64 say they are also likely to seek a lower-cost region, according to the study.

Despite those predictions, the Regional Plan Association projects that Long Island’s population – which has been largely stagnant over the last 30 years – could increase by up to 288,000 residents over the next 15 years, surpassing 3.15 million by 2030.

That could increase the number of households on Long Island by 158,000, driving new demand for housing.

While the numbers are overall pessimistic, all hope is not lost. Even as manufacturing and retail employment have dramatically declined, impressive gains have been recorded in regional healthcare and social services employment (up 57 percent between 1990 and 2010) and education employment (up 25 percent), meaning in some sectors, good-paying jobs are on a significant rise.

And a series of “reasonable regulatory and policy solutions” could not only close the multifamily housing gap, according to the study, but “improve the overall health of Long Island’s housing market.”

The study reviews “implantation case studies” in Valley Stream, Hicksville and Babylon to show how policy changes can make a difference. Valley Stream’s downtown, for instance, contains multiple recent and under-construction transit-oriented development projects, and while rents in several remain “unaffordable for many local residents,” local officials are working to close the gaps, including the adoption of new zoning regulations to improve “development readiness,” the study says.

But even with those efforts, the study concludes that without significant action now, Long Island will come up woefully short of affordable housing. To that end, the Long Island Index proposes a number of possible actions, including a series of zoning changes that “will potentially lower prices and create more capacity for new multifamily housing in Long Island communities.”

Also proposed: a concerted effort to “leverage both public and private land to encourage multifamily residential development,” including granting developers increased density flexibility – that is, allowing them to create more units overall in order to increase the number of affordable units.

“While Long Island is building more multifamily housing than it has in past decades, tens of thousands of units are needed in walkable mixed-use areas,” the study says. “Developing more multifamily housing can meet the needs of Long Island’s current and future residents.”