In Manhattan, the homeless shelters are full, and the luxury skyscrapers are vacant. Such is the tale of two cities within Americas largest metro. Even as 80,000 people sleep in New York Citys shelters or on its streets, Manhattan residents have watched skinny condominium skyscrapers rise across the island. These colossal stalagmites initially transformed not only the citys skyline but also the real-estate market for new homes. From 2011 to 2019, the average price of a newly listed condo in New York soared from $1.15 million to $3.77 million.

But the bust is upon us. Today, nearly half of the Manhattan luxury-condo units that have come onto the market in the past five years are still unsold, according to The New York Times.

What happened? While real estate might seem like the worlds most local industry, these luxury condos werent exclusively built for locals. They were also made for foreigners with tens of millions of dollars to spare. Developers bet huge on foreign plutocratsRussian oligarchs, Chinese moguls, Saudi royaltylooking to buy second (or seventh) homes.

But the Chinese economy slowed, while declining oil prices dampened the demand for pieds--terre among Russian and Middle Eastern zillionaires. It didnt help that the Treasury Department cracked down on attempts to launder money through fancy real estate. Despite pressure from nervous lenders, developers have been reluctant to slash prices too.

The confluence of cosmopolitan capital and terrible timing has done the impossible: Its created a vacancy problem in a city where thousands of people are desperate to find places to live.

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From any rational perspective, what New York needs isnt glistening three-bedroom units, but more simple one- and two-bedroom apartments for New Yorks many singles, roommates, and small families. Mayor Bill De Blasio made affordable housing a centerpiece of his administration. But progress here has been stalled by onerous zoning regulations, limited federal subsidies, construction delays, and blocked pro-tenant bills.

In the past decade, New York City real-estate prices have gone from merely obscene to downright macabre. From 2010 to 2019, the average sale price of homes doubled in many Brooklyn neighborhoods, including Prospect Heights and Williamsburg, according to the Times. Buyers there could consider themselves lucky: In Cobble Hill, the typical sales price tripled to $2.5 million in nine years.

This is not normal. And for middle-class families, particularly for the immigrants who give New York City so much of its dynamism, it has made living in Manhattan or gentrified Brooklyn practically impossible. No wonder, then, that the New York City area is losing about 300 residents every day. It adds up to what Michael Greenberg, writing for The New York Review of Books, called a new shameful form of housing discriminationbluelining.

We speak nowadays with contrition of redlining, the mid-twentieth-century practice by banks of starving black neighborhoods of mortgages, home improvement loans, and investment of almost any sort. We may soon look with equal shame on what might come to be known as bluelining: the transfiguration of those same neighborhoods with a deluge of investment aimed at a wealthier class.

New Yorks example is extremethe squeezed middle class, shrink-wrapped into tiny bedrooms, beneath a canopy of empty sky palaces. But Manhattan reflects Americas national housing market, in at least three ways.

First, the typical new American single-family home has become surprisingly luxurious, if not quite so swank as Manhattans glassy spires. Newly built houses in the U.S. are among the largest in the world, and their size-per-resident has nearly doubled in the past 50 years. And the bathrooms have multiplied. In the early 70s, 40 percent of new single-family houses had 1.5 bathrooms or fewer; today, just 4 percent do. The mansions of the 70s would be the typical new homes of the 2020s.

Second, as the new houses have become more luxurious, homeownership itself has become a luxury. Young adults today are one-third less likely to own a home at this point in their lives than previous generations. Among young black Americans, homeownership has fallen to its lowest rate in more than 60 years.

Third, and most important, the most expensive housing markets, such as San Francisco and Los Angeles, havent built nearly enough homes for the middle class. As urban living has become too expensive for workers, many of them have either stayed away from the richest, densest cities or moved to the south and west, where land is cheaper. This is a huge loss, not only for individual workers, but also for these metros, because denser cities offer better matches between companies and workers, and thus are richer and more productive overall. Instead of growing as they grow richer, New York City, Los Angeles, and the Bay Area are all shrinking.

Across the country, the supply of housing hasnt kept up with population growth. Single-family-home sales are stuck at 1996 levels, even though the United States has added 60 million peopleor two Texasessince the mid-90s. The undersupply of housing has become one of the most important stories in economics in the past decade. It explains why Americans are less likely to move, why social mobility has declined, why regional inequality has increased, why entrepreneurship continues to fall, why wealth inequality has skyrocketed, and why certain neighborhoods have higher poverty and worse health.

In 2010, one might have thought that the defining housing story of the century would be the real-estate bubble that plunged the U.S. economy into a recession. But the past decade has been defined by the juxtaposition of rampant luxury-home building with the cratering of middle-class-home construction. The future might restore a measure of sanity, both to New Yorks housing crisis and Americas. But for now, the nation is bluelining itself to death.Read the article well and answer the following questions: 1. What is happening to the demand for luxury apartments? 2. Are developers building larger (high-cost) apartments? 3.Do restrictions on supply (restrictive zoning) have any impact on market outcomes? 4.Sum up all together (use graphical representation of marker for apartments) and the result is excess ______________for cheap housing, and excess _________________________ of expensive housing. Explain.