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Too much overcrowding. Too many city services stretched too thin. Do you really think that everyone who wanted to live here if they could afford to could find apts just like that? Do you think you could just endlessly build on a very small amount of land?
PS: as to your other claims: if you look on the NYCHA website re: section 8 and public housing, you will see that there are HUGE waiting lists for both programs. Thus, the city is not equipped to handle an endless supply of the poor. Some will get pushed out of the five boroughs. Period. Middle class who can't afford "nicer" areas will either have to move out or move to "ghetto" areas. As they move in, and demand goes up, the poor are pushed out because others can more easily afford rents that are way beyond the range of poor in the city. Landlords and developers are not philanthrophists. They are trying to make as much profit as they possibly can. When demand increases, rents go up, as high as the market can bear. Despite this, there is a severe rental shortage in this city. Vacancy rates are miniscule.