Affordable-housing construction on Long Island would spur economic growth, expert says

Long Island and the entire state can boost economic growth by remedying one of the biggest obstacles to that growth: a lack of affordable housing, a top economist said on Wednesday.

Jason Bram, an economist with the Federal Reserve Bank of New York, said Nassau and Suffolk counties, along with upstate, have joined New York City as places where workers — particularly young people — are having trouble putting a roof over their head.

“The biggest complaint we hear about is housing affordability” when bank representatives meet with employers and employees, Bram told a virtual meeting of the Long Island Association’s Financial Services and Tax Policy Committee. “A lot of [employers] are saying, ‘We can’t get people to come here because they can’t afford to live here.’ ”

He continued, “Home construction is certainly a potential positive for the economy. We’d be able to address housing affordability and growing the economy at the same time.”

Bram’s comments, in response to an audience member’s question, come as debate on Long Island intensifies over Gov. Kathy Hochul’s proposal to create 800,000 housing units across the state in 10 years. The proposal, which is subject to the State Legislature’s approval, would set local targets for building units and fast-track projects in communities that don’t meet their targets in the next three years.

Town supervisors have expressed concerns about Hochul’s plan, which she unveiled in her State of the State speech last week, because it could potentially interfere with local control over zoning rules.

“Through zoning, local communities are able to hold enormous power to block growth,” the governor said. “Between full-on bans of multifamily homes, and onerous zoning and approvals processes, they make it difficult, almost impossible, to build homes.”

Matt Cohen, LIA president and CEO, told Newsday on Wednesday: “If Long Island is to remain a vibrant and sustainable region, then we need to find more innovative solutions to our affordable housing crisis. The governor’s goals are laudable and as we wait for more details, it’s imperative the state engages local stakeholders to ensure a plan is ultimately adopted that reflects the best interests of the individual communities.”

Separately, Bram, the economist, was asked about Hochul’s proposal to tie future hikes in the state’s minimum wage to increases in the consumer price index, one of the major gauges of inflation.

He cited a 2019 study by the New York Fed, which found employment levels in New York State were not impacted by a minimum-wage increase compared with levels in Pennsylvania, which has a much lower wage rate. The bank studied counties along the New York-Pennsylvania border, with a focus on leisure, hospitality and retail businesses.

“If a minimum wage close to $15 [per hour when the study was done] in upstate hasn’t led to job loss, it’s hard to imagine [proposed wage hikes] are really going to have much of a negative impact on employment,” Bram said.

The LIA opposed the minimum-wage increases adopted by then-Gov. Andrew M. Cuomo and lawmakers. It hasn’t taken a position on Hochul’s plan because she’s expected to provide more details in her proposed 2023-24 state budget later this month.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.