It’s About Damn Time
The City and State of New York have made a handful of announcements regarding plans to roll out imminent changes to the real estate development process to help encourage development and tackle the City’s affordable housing crisis. Given the current obstacles facing development, this change warrants quoting Lizzo: “It’s about damn time.”
New York City has experienced a plethora of development regimes, including the Bloomberg “we can build it” era, which was thrilling. Sure there were issues, but there were solutions. Post-Bloomberg, development became more challenging. Then add in a national pandemic, a Mayor and Governor that could not see eye-to-eye and a State legislature that allowed the 421-a programs to expire, and the development world faced never-ending hurdles, for even the smallest of matters. The past few months have signaled the beginning of hope and recovery.
Earlier last year, Mayor Adams and Governor Hochul formed two groups, the BLAST Taskforce and the “New” New York Panel, that released their findings in December 2022, identifying the most serious issues hindering development in NYC and recommending actions to address them. Of the over 100 issues identified, some are procedural and technology-related; others require substantive changes to the City’s zoning, building, environmental and tax regulations. For example, the State has proposed reforming SEQRA (the state environmental review process) to reduce obstacles to achieving housing goals and promote transit-oriented development; likewise, the City has also proposed to reform CEQR (the City environmental review process) by exempting small residential developments. The City has also proposed speeding up the pre-Certification process which is outside of the Uniform Land Use Review Procedure (“ULURP”, the public review process certain land use actions must undergo), that can take up to 2 years or more. Both the City and State have proposed allowing residential buildings to have more bulk (beyond the State limited 12.0 floor area ratio). The findings also call for re-envisioning commercial districts and vacant office buildings to allow for live-work environments, which would increase the City’s housing stock and reinvent office spaces that have sat empty since the start of the pandemic. Efforts do not stop with the Mayor and Governor. The City Council joined in by proposing to upzone neighborhoods across the City to spur housing development. The City Council also set forth planning and land use guidelines and identified the serious understaffing of the Department of Housing Preservation and Development, the City agency tasked with overseeing affordable housing programs.
In January, in her State of the State, Governor Hochul announced the “New York Housing Compact,” which establishes three-year housing targets for both upstate and New York City to meet the goal of producing 800,000 new housing units over the next 10 years, with a 3% growth target every three years for New York City, and a one percent growth target every 3 years for upstate. If towns and cities fail to meet these targets, a “fast track” approval process begins, whereby projects containing more than 20 units and a certain number of affordable housing units will be approved “even if existing zoning restrictions do not allow it.” Additionally, areas within half a mile of MTA stops will be required to rezone such areas to allow for at least 25 homes per acre. With this comes funds to help with infrastructure needed to accommodate the increase in density.
Such steps could not be more on the nose. Whether it is the inability to obtain information from online platforms, being forced to spend months analyzing potential impacts when we know none exist, or waiting for a response from City staffers who, through no fault of their own, are underwater, understaffed and under-resourced (and quite frankly, doing their best to keep up) – things need to change. The Mayor, the Governor and the NYC City Council have recognized that due to the City’s limited budget and other fiscal constraints, much of the road to recovery must be placed in the hands of private developers, as has been the case for many of the prior economic downturns this City has experienced.
We cannot be so naïve to believe that the City and the State’s problems have been solved now that these issues have been identified, as the devil is surely in the details and in the speed of the implementation of solutions. However, putting on rose-colored glasses, assuming that these changes can be implemented post-haste, we cannot ignore the fact that without 421-a or a similar program, these initiatives will not be enough to spur the development of affordable housing. So, we are left back in the hands of the State legislature. The multi-billion dollar question is, will State-elected officials step up to the task? Let’s hope so. Too many of our neighbors’ livelihoods are riding on this to imagine any other outcome.