This report was produced in partnership with the Westchester County Association
Over the next fifteen years, if Westchester does not sustain increased efforts to address its housing gap, it could cost the county between 8,400 and 12,000 annual jobs, approximately $533 to $742 million in annual earnings, and a staggering $32 to $57 billion in Gross Domestic Product (GDP).
Estimated Forgone Economic Impact
Net difference in economic impacts between the business-as-usual scenario and the estimated range of total housing needs (direct, indirect, and induced from development activity). RPA analysis based on RIMS II Type II Multipliers, Bureau of Economic Analysis (BEA). Westchester County Industry Sector: Residential structures. *Jobs and earnings estimates represent annual impacts.
Key Takeaways:
Over the past three decades, Westchester has built approximately 61,000 residential units, 34,000 during the first development cycle (1990-2009) and 27,000 during the second (2010-2024).
Since 2010, there has been a significant shift towards higher-density housing and Transit Oriented Development (TOD). Moreover, the share of multifamily buildings (with five units or more) has grown substantially, constituting 78% of the total stock permitted between 2010 and 2024, compared to 29% during the pre-recession cycle. These are positive trends, strongly aligned with smart growth principles, and should be further encouraged.Despite strong progress, the supply pipeline remains insufficient.
Rental vacancy rates have fallen to a historic low of 1.9 percent, indicating a lack of available housing to meet demand. Meanwhile, over the past decade, average rents in the county rose from $2,051 in 2015 to $2,990 in 2025, an increase of 46 percent.Currently, Westchester faces a housing shortfall of approximately 21,000 units.
If the county continues on its current trajectory, its housing shortfall could grow to between 44,000 to 77,000 units by 2040. A pro-housing policy of 1 percent annual growth compounded year over year between now and 2040 would substantially reduce this housing shortfall. But it would still leave a gap of approximately 10,400 units, even when assuming a more modest population and job growth scenario.Based on this analysis, fully addressing housing needs in Westchester county could create up to $82 billion in economic activity, 17,300 annual jobs, and $1.1 billion in earnings power.
However, failing to close this housing gap would be an astonishingly expensive lost economic opportunity, costing the county up to $56.9 billion in economic activity, 12,000 jobs, and $742 million in annual earnings.
Since 1990, Westchester has built approximately 61,000 residential units, 34,000 during the first development cycle (1990-2009) and 27,000 during the second (2010-2024). Since 2010 (and particularly over the past eight years), there has been a significant shift towards higher-density housing and Transit Oriented Development (TOD), primarily located in downtown areas and the more populous southern half of the county (particularly in cities like New Rochelle and Yonkers). Multifamily buildings (with five units or more) have grown significantly as a share of total residential units, constituting 78% of the total stock permitted between 2010 and 2024, compared to 29% during the pre-recession cycle.
Between 2010 and 2024, Westchester County added approximately 27,000 units, representing a 0.6% annual growth rate, or a cumulative increase of 7.2% over the period. In addition, the great majority of this growth in supply has occurred as development has accelerated over the past eight years. But much work remains. Compared to the rest of the tri-state metropolitan region, and in proportion to its population, Westchester ranks 25th out of the 31 counties that make up the region. Rental vacancy rates in Westchester have continued to decline to 1.9% over the same period, indicating a continuing need of available housing to meet demand. Meanwhile, average rents in the county have climbed 46% from $2,051 in 2010 to $2,990 in 2023. 2015–2025 As a result, nearly half of all renters in Westchester County are currently cost-burdened, meaning they spend over 30% of their income on housing expenses.
Currently, Westchester faces a housing shortfall of approximately 21,000 units driven by factors such as overcrowded households, the population requiring temporary shelter, and the aforementioned low vacancy rates. On its current trajectory, compared to a business-as-usual rate of development, Westchester County’s housing shortfall is expected to grow, potentially reaching a deficit of 44,000 to 77,000 units by 2040. This range will be influenced by the deterioration of existing homes, damage from flooding, and the formation of new households in the next 15 years.
Housing development in Westchester provides an extraordinary economic opportunity for the residents of its municipalities, towns, and villages. Conversely, if left unaddressed, Westchester’s housing needs will result in substantial economic cost. The county stands to lose out on the creation of over $32 to $57 billion in economic activity, including up to 12,000 jobs and $742 million in annual earnings power.
Increasing investment and expanding innovative financing tools will also be crucial. Our analysis indicates that addressing the housing shortage in Westchester would require an additional $20 to $35 billion in development through 2040. Westchester County established a new Housing Flex Fund in 2023 as a gap financing tool using $90 million in ARPA funding. This innovative fund builds on the County’s other subsidy programs and is estimated to help build an additional 2,000 units of affordable housing. Investments and tools like these will more than pay for themselves through increased GDP, jobs, and a larger tax base. They will also lower housing costs and bring an improved quality of life for the county’s residents.
Similarly, while new multifamily development can add to costs associated with local government services, overall benefits outweigh these costs. Recent trends in the fastest-growing towns in Westchester show that, despite growth, they have not experienced an expansion of student population and school enrollment. This challenges the commonly held, mistaken assumption that increased residential development necessarily leads directly to overcrowded schools. Moreover, national studies on infrastructure show how efficiencies are gained when towns, cities, and metro areas grow in more compact patterns. For example, as more housing units are built along existing roads, sewers, or utility lines, the capital cost of infrastructure and services per home decreases.
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