The solar panels are not what makes a Brooklyn apartment cost $700,000. The ten years of waiting are — and the dirt underneath. In Defining ‘Affordable’ Housing in New York, the Wall Street Journal Editorial Board takes a $270 million Brooklyn project, divides it by 385 homes, gets roughly $700,000 a door, and blames green mandates, prevailing-wage rules, and years of community negotiation — then prescribes rolling back New York’s 2019 rent-stabilization law to put some 57,000 vacant apartments back on the market. The cure is aimed at the wrong disease.
They open on a governor quoting scripture at a ribbon-cutting, which is easy material, and the Board takes it. Fine — the joke isn’t the problem. Neither is the arithmetic: $270 million divided by 385 homes is about $700,000 a unit, and nobody should shrug at that. All-electric heat and cooling, solar panels, green roofs, EV chargers cost real money. So does prevailing wage. So does five years of courting neighbors before a shovel moves. If that were the whole bill, I’d be arguing the Board’s side.
It isn’t the whole bill. Here is the arithmetic the piece doesn’t do. The project took nearly a decade. A developer buying a Brooklyn site almost never pays cash — he borrows against the land. Then he spends five years negotiating and several more getting permits, and during all of it the interest on that loan runs. Nothing is being built. The bill is compounding. Ten years of interest on borrowed money at even 5 percent swamps a green premium, which builders put in the low single digits of a building’s hard costs. By the time the first tenant moves in, a large share of that $700,000 is not concrete and copper wire. It is what the money charged while nobody was allowed to build. Strip every green rule off the drawings and you have shaved a rounding error off a decade of carrying costs. And the rules that are left shrink the utility bill every month for the next thirty years — cheap rent in a building that costs four hundred dollars a month to heat is not cheap.
Then there is the number the piece never computes at all. A builder who receives public money still has to buy land, and on the private market the land goes to whoever bids highest. The deepest pocket at that closing table is usually not the one planning apartments for people earning 60 percent of the area median. It is the one planning condos. So when public money arrives on the bid, part of it ends up in the price of the lot: the seller sees the subsidy riding on the check, prices the lot up to what that bid can carry, and the money clears into the seller’s hands. A subsidy paid to a builder who must buy land at market price is, in the end, a subsidy paid to whoever sold the land. That is the number nobody in the piece wants to look at — not what the building cost, but what the ground cost, and who pocketed the difference.
Which brings us to the proposed remedy. Roll back the 2019 law. Let landlords reprice apartments when leases turn over and stop “losing money” on regulated units. Walk it through one step at a time.
Nothing gets built. Not one new kitchen, not one new stairwell. The claimed 57,000 vacant apartments do not get cheaper. They get re-rented at whatever the market will bear — which is rent a family needing a subsidized unit cannot pay. A vacant unit is not a loss. It is a landlord waiting on a rent that deregulation would hand him, and the tenant with no other address pays it. The tenant loses in both scenarios; the landlord’s ledger improves. Repeal is a transfer dressed up as a construction program, and the piece never names a single apartment that would rent for less because of it.
The vacancy number does less work than it appears to, anyway. Vacant is not the same as available — a share of those doors is not fit to rent, a share is waiting on a gut renovation. And New York already ran the other version of this experiment before Albany changed the law in 2019: a landlord whose stabilized tenant moved out could raise the rent to market once it crossed the deregulation threshold. Cheap apartments did not appear. What appeared were higher rents. The standard comeback — the market-rate unit frees up a cheaper one down the chain — runs into the same clock. The ten-year approval line that made this building cost $700,000 a door will delay every building behind it. Supply is the goal; this is the slowest way to get it. Meanwhile the column is titled “Defining ‘Affordable’” and never defines it.
Two more omissions while we are counting. A landlord who can show that a regulated rent no longer covers upkeep and taxes can already petition for an increase — the current rules are not sealed shut, and the piece does not mention it. And all those compliance rules it stacks up as pure cost are the same ones that keep a family’s heat and power bill from eating the rent it just saved.
So what do we build instead?
First: if public money pays for the building, the public should own the building. The New York City Housing Authority has held and run public housing on public land since the 1930s — more than 150,000 apartments. When the public owns the site, the site price vanishes from the math: no seller bidding against a pension fund, no subsidy flowing into a landowner’s pocket, what’s left is construction, which is a solvable problem. Wrap it in permanent equity — a limited-equity co-op or a city-held stake — and the unit stays affordable because nobody can ever sell it. The subsidy then buys a family a rent that stays locked instead of a developer’s fee that walks away. Where the family should own rather than the city, there is the community land trust: a nonprofit holds the land permanently, the family owns the house and later sells it at a gain computed by a set formula, the equity goes to the family, and the land’s appreciation stays with the community instead of going to the next buyer. Land trusts run in American cities now.
Second: stop charging the clock. A public construction bank lends at a fixed low rate for the whole length of the build, and interest stops being the largest line item on a ten-year project. We have run one of those in North Dakota since 1919, and it has earned the state a profit in nearly every year since. Nobody ever called Bismarck the Kremlin.
Third: make the approval clock shorter than the loan clock. Draw one standard plan, review it once, build it as drawn on land the city already owns. Five years of community negotiation buys you neighbors who tolerate the building. It does not buy you a cheaper one.
None of that is free, and I will not pretend otherwise. New York’s public housing manager is billions of dollars behind on repairs and chronically short of cash, and a land trust needs a city willing to hand over parcels instead of auctioning them. That is the honest difficulty — a difficulty of policy, not of physics. Policy can be changed by people.
Here is the test I would put to anyone arguing the subsidy and the rent law are the problem: name one unit that becomes cheaper if the rent law goes away. Not cheaper to maintain. Cheaper to rent. The piece had ten paragraphs and did not produce one.
The economy is a set of choices, not the weather. Somebody chose to price homes as investments; somebody can choose to price them as places to live. If the Journal wants that $700,000 to fall, the sentence is short: the money is patient, the plan is standard, the rent is locked — by owning the ground under the building instead of renting it from the speculation that made a modest Brooklyn apartment cost seven hundred thousand dollars to produce. Repeal the rent law and you get expensive apartments. Shorten the wait, and you get houses.