NEW YORK – New York City’s housing crunch is the worst it has been in more than 50 years.

The portion of rentals that was vacant and available dropped to a startling 1.4 per cent in 2023, according to city data released on Feb 8. It was the lowest vacancy rate since 1968 and shows just how drastically home construction lags behind the demand from people who want to live in the city.

Housing experts often consider a “healthy” vacancy rate to be somewhere around 5 per cent to 8 per cent.

A higher vacancy rate typically means it is easier for people to find apartments when they want to move.

It also means that property owners are more likely to have to compete for renters, conditions that would moderate rent increases.

The data suggests that New York City’s housing crisis is only getting worse. The 1.4 per cent rate was down from 4.5 per cent in 2021, the last time the survey was conducted.

New York officials consider a vacancy rate of less than 5 per cent to be a “housing emergency”.

“The data is clear: The demand to live in our city is far outpacing our ability to build housing,” Mayor Eric Adams said in a statement announcing the numbers on Feb 8. “New Yorkers need our help, and they need it now.”

The scale of the problem is putting more pressure on officials to do something about it. High housing costs continue to force families and working-class people out of the city, threatening the economy. An influx of migrants has overwhelmed the city’s homeless shelter system, and homelessness among non-migrants is also on the rise.

Housing experts estimate that the number of homes the city needs to build is in the hundreds of thousands. But New York City has issued fewer building permits per resident than Boston, San Francisco and Austin, Texas, over most of the past decade, according to the Citizens Budget Commission, a non-profit watchdog organisation.

So far, however, the city and state have not made moves that could accelerate enough housing development to resolve the crisis.

State lawmakers failed in 2023 to pass several major housing proposals, including a push by Governor Kathy Hochul to increase development in the suburbs. In 2024, less ambitious measures appear to be stuck in limbo, as the real estate industry, labour unions and tenant advocates remain at an impasse over tax incentives for new construction and tenant protections.

Mr Adams has proposed local solutions, like an overhaul of the city’s zoning code. He estimates that the changes could make way for as many as 100,000 additional homes in the coming years. They would need to be approved by the City Council, and a vote could come as early as the autumn.

But city officials acknowledge that these changes would be modest and not have much effect without state action.

The data released on Feb 8 was collected in the first half of 2023 as part of a survey run by the US Census Bureau every three years. The first survey was conducted in 1965.

In many ways, the results affirm the experience of many New Yorkers.

Rents plummeted at the height of the coronavirus pandemic as people moved away and the vacancy rate increased. But as people moved back to the city, rents have reached some of the highest levels ever over the past two years. The median rent on new Manhattan leases in December, for example, was US$4,050 (S$5,450), according to brokerage Douglas Elliman.

The vacancy rate is calculated by first totalling the number of homes “available to rent” in the city. This does not include vacant apartments that are “dilapidated” or empty because the owner uses the unit as a pied-a-terre or a short-term rental, such as an Airbnb.

Then, that number is divided by the roughly 2.3 million total rental homes in the city that are either available or occupied by tenants.

The vacancy rate dropped to 1.4 per cent even as the city added about 60,000 homes over the past two years, according to the city data. In the last survey before the pandemic, in 2017, the vacancy rate was 3.63 per cent.

As in previous years, the data also shows how the housing crisis hits New York’s lowest-income people the hardest. The vacancy rate of apartments that rent below US$1,650 per month – about the citywide median – was less than 1 per cent.

Somewhat surprisingly, however, the crunch is now hitting higher-rent apartments, too. Fewer than 4 per cent of apartments renting for more than US$2,400 were available in 2023, according to the survey, less than half of similar estimates in 2021 and 2017. NYTIMES