Lies, Damn Lies and Statistics in Real Estate

No one knows who came up with the phrase “lies, damn lies, and statistics.” But we do know that real estate is not immune from the deceptive use of data to support a bankrupt argument.

A damaging example in New York was when activists linked the Greenpoint-Williamsburg development boom with a decline in the Latino population of those neighborhoods during the 2000s.

This clever but irresponsible use of statistics came as developers, capitalizing on a 2005 rezoning and strong demand for housing in North Brooklyn, created thousands of apartments in the rezoned area. A Churches United for Fair Housing report fueled a false narrative that development pushes people out.

“While displacement trends existed before the zoning changes, they were significantly accelerated during this time, implying the zoning changes exacerbated previous displacement pressures rather than alleviating them,” the report asserted.

That claim — amplified by Public Advocate Jumaane Williams and mayoral candidate Scott Stringer — helped stop rezonings, including in the South Bronx and suddenly hip Bushwick, that could have accommodated tens of thousands of home-seekers. Bushwick gentrified anyway, and underinvestment in the Bronx continued.

The Department of City Planning and the NYU Furman Center eventually refuted Churches United’s “study” with an analysis showing that the decline in North Brooklyn’s Latino population began well before the rezoning and reversed after the rezoning.

But the damage had been done: The de Blasio administration completed only eight of 15 planned rezonings. Today, the vast majority of the city still has low-density zoning, and housing costs remain exorbitant.

It is a bit surprising — and fortunate — that the same use of propaganda hasn’t happened in Jersey City, which during the pandemic was often reported to have the fastest-rising rents in the metro area as multifamily towers sprouted like dandelions.

“In Jersey City, the median rent for a one-bedroom unit surged 48.7 percent year-over-year to $2,900 per month — tied with Hoboken for second behind New York City’s $3,790,” The Real Deal reported in December 2022, citing Zumper.

A basic rule of statistics is that correlation is not causation. “Umbrellas don’t cause rain,” the Citizens Housing and Planning Council’s Howard Slatkin told Crain’s. “Development is the umbrella that comes out when the rents are rising to the point where somebody can make some money building something.”

Besides umbrellas and rain, city planners like to use another analogy to put new-housing statistics in perspective: If a basketball team walks into a room of people, the average height in the room increases, but none of the people already there get taller.

Still, people with an agenda can easily manipulate data to advance a cause.

It’s also important to remember that rent reports are typically based on listings of available units. When new buildings go up, they add a lot of listings at above-average rents. That pushed Jersey City to the tops of charts, but it didn’t mean that rents skyrocketed for tenants whose leases were quietly renewed. Nor did it trigger a wave of displacement.