Progressive politicians want more housing in NYC so why are they making it so hard to add apartments in Midtown?

New Yorkers who don’t eat, live and breathe zoning — which is to say, nearly all of us — might be surprised to discover that there are four enclaves in and around Midtown Manhattan that do not allow new housing. Forget the vast investment in subway lines and the walkable proximity to the nation’s largest job concentration; decades ago, city planners decided these neighborhoods had a future in manufacturing.  Residences were viewed as incompatible.  While the sewing machines and printing presses are long gone, at the sleepy pace at which the city updates its obsolete zoning, no one troubled to rethink the best way to use the land and buildings.  A financially strapped city was leaving millions in potential tax revenues on the table.Now that’s changed, but not entirely for the better. NYC’s Planning Department has proposed the Midtown South Mixed-Use Plan, which purportedly would result in the creation of about 9,700 new housing units in the four enclaves. That’s a good goal, but I find in a new brief for the Manhattan Institute that city and state policies make it hard to reach.Even in some of the highest-rent neighborhoods in the US, there is a real issue with the financial feasibility of the plan.New York’s progressive politicians want to pick developers’ pockets twice: Once to require 25 to 30% of the units to be rented at well-below-market rents, and a second time to require that construction workers be paid “prevailing,” or union-scale wages. Even in New York, there’s some recognition thatdevelopers need to be compensated for these goodies, so the state legislature has enacted two tax exemption programs . The problem is that, in their zeal to squeeze the bottom dollar out of real estate developers, it’s not clear the state left enough profit in the bargain to induce developers to play along.

The future, uncertain course of price inflation and interest rates also influences developers’ calculations, but the plan provides no me...