Combining Tactics: Atlantic Ave Rezone, Tax Abatements, and City of Yes
Putting the pieces together
This past week, the City Council approved the Atlantic Avenue Mixed-Use Plan (AAMUP), a sweeping rezoning of a 21-block stretch of Brooklyn between Vanderbilt and Nostrand Avenues. Long dominated by low-scale industrial uses, these areas will likely transform into mixed-use neighborhoods delivering approximately 4,600 new homes. This move doesn’t stand in isolation. When viewed together with the state’s 467-m tax abatement and the City of Yes for Housing Opportunity (COY), the corridor could offer investors a compelling opportunity that allows them to leverage synergistic city and state policies.
AAMUP presents a significant opportunity. The new policy rezones M1 corridors to mixed-use districts that will allow Floor Area Ratios (FARs) as high as 9.02. Below are a few select changes of note in the area:
Atlantic Avenue
Before the rezoning: M1-1 (no residential FAR)
After the rezoning: C6-3A (R9A) & M1-4A / R9A = residential FAR of 7.52/9.02 (UAP)
Grand / Classon Avenues
Before the rezoning: (Mostly) M1-1 (no residential FAR)
After the rezoning: M1-3A/R7D = residential FAR of 4.6/5.6 (UAP)
Bergen / Dean / Pacific Streets
Before the rezoning: M1-1 (no residential FAR)
After the rezoning: → M1-2/R6A = residential FAR of 3.0/3.9 (UAP)
The rezoning includes incentives for affordable housing via the Mandatory Inclusionary Housing (MIH) framework and Universal Affordability Preference, and adds bulk flexibility to support new construction. It is designed to boost housing creation while maintaining neighborhood character and empowering truly mixed-use developments. Importantly, the plan’s focus on formerly industrial zones means that large sites, often less constrained by existing tenancy or historical overlays, can be quickly brought into production.
But zoning changes don’t translate to new housing unless the numbers pencil. This is where tax abatements play a vital role. Researchers at The NYU Furman Center have stated that rental projects “will not happen without a tax exemption unless the prices of land fall significantly, or other forms of subsidy are provided to support development. A new tax exemption is necessary to spur sufficient new construction of rental apartments to meet demand.” The housing permit data backs this up.
According to the Office of the New York State Comptroller’s March 2025 report, NYC experienced a major uptick in permit filings in 2015 and again in 2022, right before the expiration of 421-a. In Q2 2022 alone, the very last quarter before 421-a expired, more than 25,000 units were permitted—nearly double the quarterly average in the preceding years. Following the lapse of the program in June 2022, filings plunged. In 2023, total permits dropped to approximately 11,000 units citywide, a level not seen since the depths of the financial crisis. According to REBNY data: “There were 4,309 proposed multiple dwelling units spread across 97 buildings in Q4 2024, a 17% increase in units from the previous quarter and in line with the overall average since 2008.” Although filings rebounded somewhat to 15,000 in 2024, that figure still lags far behind the 24,000–28,000 units per year seen under 421-a (16).
Sales data backs this up too. According to Bob Knakal:
“In Manhattan south of 96th Street, 1.6 million buildable square feet of rental development land sold during the last year of the 421-a tax abatement program [2021]. Two years later [2023], without the program, it was 38,000 buildable square feet.”
Enter 485-x and 467-m.
485-x replaced 421-a Affordable New York (ANY) to everyone’s relief in 2024. However, developers had mixed reactions to the new program because of its steep labor wage requirements. This labor requirement, while politically popular, has made large-scale projects harder to finance. As a result, developers have focused on erecting 99-unit buildings to bypass the wage requirements and have filed very few permits for developments larger than 100 units or very large development, defined as 150+.
That’s why some developers are eyeing 467-m instead. 467-m, enacted in 2024 alongside 485-x, provides a new tax incentive for office-to-residential conversions. Unlike 485-x, it imposes no wage mandate and is tailor-made for properties that already exist. For investors that own property or are under contract to purchase properties in the rezoning area, 467-m is a perfect tool to leverage to build large sites of over 150 units.
Consider the example of 1000 Dean Street in Crown Heights.
Betting on Brooklyn: Investors purchased the former warehouse building/garage for $11m in 2012 for $73 per foot and converted it to creative office space. Total project cost of ~$30m, or $200/square foot.
Big sale: On the heels of red-hot demand in the Brooklyn market, those investors sold the office building property for a whopping $56m – 9 months before COVID-19 forced remote work. Price per square foot of $354.
COVID crash out: The property sold for a combined $32.5m (2023) + $6m (2021) in a separate sale, or for a total of close to $40m.
With AAMUP’s rezoning and 467-m, a property like this could be converted to apartments, unlocking immense value. The next bullet point may well have a price tag higher than $60m (Note: the 1000 Dean Street story arc is a great one to read through).
Though 467-m works great here, the use of the tool is bolstered even further by COY. When COY passed, it made the most comprehensive zoning change to NYC since the initial zoning resolution was created in 1961. COY offers tangible value-adds to developers:
Obvious
Eliminated parking requirements in transit zone
Reduced dwelling unit factor to 680 (outside of Manhattan and Downtown BK), making it possible for more units per floorplate
Less Obvious
Permit 20% deeper rear yard encroachments for accessibility retrofits
Deduct floor area for certain non-revenue uses like corridors and amenity spaces
Loosen sky exposure and setback rules when converting existing buildings
For commercial-to-residential conversions under 467-m, these changes are catalytic. They reduce hard costs and expand the usable floor area. Moreover, COY and 467-m work in tandem on affordability. Projects participating in 467-m must provide affordable housing, but so do projects seeking COY’s as-of-right FAR bonuses. These overlapping requirements help developers optimize density while meeting policy goals. This means developers could redevelop 1000 Dean Street–this time with a building footprint of 200,000 square feet, dozens of AMI restricted units, and no space assigned for parking!
To recap:
AAMUP opens the door by rezoning key industrial corridors into residential development zones.
467-m offers a pathway to redevelop vacant or obsolete commercial stock into housing with favorable tax treatment and no labor constraints.
City of Yes eliminates outdated zoning barriers, offering tangible floor area boosts and lower development friction.
But the opportunity here is much bigger than just AAMUP. Multifamily tax abatements drove 70% of all multifamily construction in NYC between 2010 and 2020, according to NYU Furman Center. City of Yes modernizes zoning to enable production. And rezonings like AAMUP provide the land canvas. When used together, these tools present a powerful model for value creation in rezoned corridors. In a rising rate environment, under a broadening umbrella of rent regulations, and with ever-rising property taxes, developers need every tool in the toolbox to unlock value. Tax abatements alone won’t move the needle. But using a mix of strategies and tactics as we have shown above can be a great way to access value.
If you own properties or are evaluating the purchase of properties in any of the following rezoning locations, AAMUP / LIC / MSMX / Jamaica please reach out and I will evaluate them.
I am bullish on NYC multifamily.
Best Regards,
Romain Sinclair
Sinclair Realty Group
646 326 2220
Sources:
NYC Department of City Planning. (2024, October 17). AAMUP Certification Presentation for CPC Review.
https://www.nyc.gov/assets/planning/download/pdf/plans-studies/atlantic-avenue-mixed-use/aamup-cpc-presentation-101724.pdf
NYC Council Press Release. (2025, May 28). City Council Approves Atlantic Avenue Mixed-Use Plan to Create Thousands of New Homes in Central Brooklyn.
https://council.nyc.gov/press/2025/05/28/2888
Real Estate Board of New York (REBNY). (2025, Jan 29). Q4 2024 Construction Pipeline Shows Quarterly Uptick in Certain Categories.
https://www.rebny.com/press-release/q4-2024-construction-pipeline-shows-quarterly-uptick-in-certain-categories/
Office of the New York State Comptroller (OSC). (2025, March) Housing Production in NYC.
https://www.osc.ny.gov/files/reports/pdf/report-24-2025.pdf
NYU Furman Center. (2024, April 14). Principles to Guide an Improved Tax Exemption to Secure New Rental Housing: Fostering Affordability and Equitable Development in New York City
I believe the special district section is live already and the FAR is more than usual, for the R6A is 5.0, usually what happens on this type of rezoning.