A land of four-figure rents and homes that easily costs seven figures, New York City's white-hot real estate and rental prices have recently shown signs of moderating.
Unfortunately, the cooler market is unlikely to stave off another crisis already gripping the city: A homeless population that recently skyrocketed to a record high above 60,000 — bedeviling the efforts of city policymakers and advocates who are trying to alleviate the problem.
New York City's Department of Homeless Services is certainly throwing lots of money at the problem, but with little immediate result. For fiscal 2016, the agency saw a 20 percent boost in its budget, to more than $1.3 billion.
According to experts, the surge in homelessness is converging with another problematic yet all too familiar trend: A lack of affordable housing in one of the most expensive places in the world to live.
The construction boom rapidly transforming New York City's skyline and gentrifying its neighborhoods has done little to quell the demand for reasonably priced apartments. From 1994 to 2012, there was a net loss of about 150,000 rent-stabilized units, according to data from New York's Rent Guidelines Board.
As a result, a dynamic that began under the two previous mayors, Rudolph W. Guiliani and Michael Bloomberg has grown inexorably worse under Mayor Bill de Blasio. A policy change under Bloomberg denied priority of public rental vouchers to displaced families — creating what homeless advocates called a "revolving door of homelessness" that has yet to abate.
"As we reach record homelessness, we also have a housing crisis," said New York City Comptroller Scott Stringer to CNBC recently. "When more than half of New Yorkers spend over one-third of their income on rent, we have a major challenge."
Indeed, soaring housing costs have hit New Yorkers hard. During November, the average rental price of a NYC apartment fell by more than 3 percent in both Manhattan and Brooklyn, according to Douglas Elliman. However, the average rental cost remains well above $3,000 per month, underscoring how surging rents have priced a number of city residents out of the market, displacing thousands of families and individuals.
According to a recent Housing and Vacancy Survey from the Census Bureau, 56 percent of city households qualify as rent burdened with more than 30 percent of their income going to rent and utilities. Of rent-burdened New Yorkers, the subset of extremely rent burdened pay more than 50 percent of their income toward rent and utilities. Nearly 3 out of every 10 rent-burdened New Yorkers fall into that category.
The problem is also largely economic, with city wages shrinking and slack in the city's labor market — where unemployment hovers above the national rate at 5.1 percent. It all makes the nexus between homelessness and a lack of affordable housing more acute, experts say.
"Things are so tight, and people are so marginally stable in their month-to-month tenancies and their doubled-up situations," Shelly Nortz, deputy executive director for policy at the Coalition for the Homeless, told CNBC in a recent interview.
"Housing is maxed out, Section 8 [public rent vouchers] funds have a massive waiting list with more people on the edge of homelessness, and the cost of securing an apartment has increased dramatically," Nortz said.
Yet Stringer pointed out that the city has the capacity to increase its affordable housing stock. He told CNBC the city has "over 1,000 vacant, city-owned lots in our city that have been vacant for decades — we should be building tens of thousands of units of affordable housing. We need to harness every resource we can to competently combat our homeless crisis."
The de Blasio administration has made several efforts to address the city's affordable housing crisis, including bolstering DHS' budget and an initiative called "Home for the Holidays." The program offers up to one year of payments, ranging from $1,200 to $1,800 for rent, to friends and family members of the homeless willing to offer them shelter. City officials are trying to place 5,000 families who have lived in homeless shelters for at least 90 days.
The administration has also boosted funding to rental assistance programs and created a legal service that helps strapped tenants fight eviction.
Recognizing that cheaper options are key to solving the helix of housing and homelessness, NYC is getting some help from New York state via the allocation of affordable units pledged by Gov. .
Simultaneously, a new joint plan developed by Assemblyman Andrew Hevesi called Home Stability Support will help defray up to 85 percent of a recipient's rent. This program is primarily for public assistance recipients who have exceeded the five-year limit set up by 1990s welfare reform, and looks to lower the numbers that utilize New York City shelters, which cost taxpayers more than $1 billion annually.
"The reason why we're having the state pick up the cost is because over the last five years, the state has been cutting money for homeless programs," Hevesi told CNBC in an interview, in spite of homelessness surging since the 2008 crisis. "The state has not been doing its job."