New York City, a global beacon of culture and commerce, is grappling with a crippling dual affordability crisis. For tourists, the dream of visiting is being crushed by record-high hotel prices. For New Yorkers, the dream of living here is fading as the search for a reasonably priced home becomes ever more desperate. These aren’t separate problems; they are two heads of the same monster, fed by a profound shortage of available rooms and homes.
If you’ve priced an NYC hotel recently, you’ve felt the squeeze. The average daily rate (ADR) has soared, with some analyses placing the 12-month average over $320. This isn’t just a post-pandemic tourism rebound; it’s a perfect storm of policy, economics, and logistics.
Figure 1: Change in Active Short-Term Rentals After Local Law 18
type: bar
labels: ['Before LL 18 (Summer 2023)', 'After LL 18 (Spring 2024)']
series:
- title: Active Listings
data: [25000, 2500]
labelColors: true
width: 80%
legend: false
Figure 2: Share of NYC Hotel Rooms Used for Migrant Shelters (April 2025)
type: pie
labels: ['Used for Migrant Shelters', 'Commercially Available']
series:
- title: 'Hotel Room Status'
data: [14000, 108000]
width: 60%
legend: true
labelColors: true
Figure 3: Year-Over-Year Cost Increases for NYC Hotels (2024)
type: bar
labels: ['Labor Expenses', 'Insurance Premiums', 'Property Taxes', 'Total Expenses Above GOP']
series:
- title: '% Increase (2024 YoY)'
data: [4.8, 17.4, 4.3, 4.1]
tension: 0.2
width: 80%
labelColors: true
fill: true
beginAtZero: true
legend: false
For New Yorkers, the struggle to find affordable housing is a daily reality. The city is simply not building enough homes to keep up with demand, a problem that has been decades in the making.
The core of the crisis is a fundamental mismatch. Between 2011 and 2023, the city’s robust economy added approximately 895,000 jobs, yet only saw the creation of about 353,000 new housing units. More jobs mean more people needing a place to live, while a constrained housing supply forces them to compete for limited inventory.
Figure 4: NYC Job Growth vs. New Housing, 2011-2023
type: bar
labels: ['Jobs Added', 'Housing Units Added']
series:
- title: Number Added
data: [895000, 353000]
width: 80%
legend: false
labelColors: true
Building in New York is uniquely expensive. The cost of land is astronomical, and as a Baruch College report highlights, construction material and labor costs have risen dramatically since 2020, putting immense financial pressure on any new development.
Figure 5: Estimated Construction Cost Increases, 2020-2024
type: bar
labels: [Construction Materials, Labor Costs, Land Acquisition, Permits & Approvals]
series:
- title: Percentage Increase 2020-2024
data: [35, 42, 28, 15]
tension: 0.2
width: 80%
labelColors: true
beginAtZero: true
legend: false
Beyond costs, developers navigate a complex web of regulations. Restrictive zoning has historically limited housing capacity, and the expiration of the crucial 421-a tax abatement program in 2022 removed a key incentive for building rental housing. Its successor, 485-x, comes with stricter affordability and labor requirements, and its long-term impact on large-scale development remains to be seen.
The result of this supply-and-demand crunch is a brutal rental market. Median rents in Manhattan consistently hover above $4,000 a month, with Brooklyn and Queens not far behind.
Figure 6: Median Monthly Rent by Borough
type: line
labels: ['2020', '2021', '2022', '2023', '2024']
series:
- title: Manhattan
data: [3200, 3400, 3800, 4100, 4300]
- title: Brooklyn
data: [2400, 2600, 2900, 3200, 3400]
- title: Queens
data: [2000, 2200, 2400, 2600, 2800]
width: 100%
legend: true
This is fueled by a critically low citywide rental vacancy rate, which has fallen to a mere 1.4%. In such a tight market, landlords hold nearly all the leverage, and tenants are left with few options but to pay up or move out.
Figure 7: NYC Rental Vacancy Rate, 2017-2024
type: line
labels: ['2017', '2021', '2023']
series:
- title: NYC Rental Vacancy Rate (%)
data: [3.63, 4.54, 1.41]
width: 100%
tension: .4
legend: false
Note: Data from the official NYC Housing and Vacancy Survey, conducted periodically.
The hotel and housing crises are deeply intertwined. Policies aimed at one sector, like Local Law 18, inevitably impact the other. Both compete for the same limited land, labor, and construction resources.
Solving this requires a comprehensive, multi-pronged strategy. It means aggressively pursuing pro-housing zoning reforms like the “City of Yes” initiative, reforming the city’s outdated property tax system, and creating effective incentives that spur the construction of housing for all New Yorkers. The future of the city—for residents and visitors alike—depends on it.