Mayor Adams's new rezoning
+ New Rochelle's recent housing boom
Today’s summary: Mayor Adams announced new policies aimed at remedying the scarcity of housing construction, just as new development activity in NYC sunk to its lowest in recent memory for the month of July. On the other hand, New Rochelle is bucking the NIMBY trend that many NYC suburbs have embraced with an impressive pipeline of new development over the last few years.
It sounds trite and it’s been said before but development activity in NYC is really not doing so well. Manhattan Borough President Mark Levine pointed out that Manhattan approved 0 new building permits during the month of July. By comparison, he cited, in July 2013 the borough of Manhattan approved 1,208 new apartments, and in July 2022, 215 apartments citywide. This is comically bad. The expiration of the 421 a tax abatement, responsible for some 70% (3,093 buildings) of all multifamily construction during the 2010-2020 period, is having some real repercussions.
In response to this and the general disarray in the state of housing production in NYC, Mayor Adams announced a couple of initiatives to help the situation.
Midtown south mixed-use plan
This is a rezoning. The plan would re-examine existing zoning rules that limit new development to commercial or manufacturing use. The idea is being branded as a 24/7 district that is amenity rich and could make way for housing, including affordable housing. The effected area is shown below:
Creating the Office Conversion Accelerator
Targeted towards developers who want to convert buildings into 50 or more housing units (translation: 100% of the developers doing these conversions), the accelerator looks like it is meant to get investors and developers who see the opportunity to convert but who may otherwise be weary of NYC’s bureaucratic red tape. It’s unclear exactly what services the accelerator would provide, as the website is vague about its key value adds and offerings. The accelerator team is composed of staff from DCP, DOB, LPC, and HPD and it is intended to be cross-functional. For more information, the accelerator’s website is here
Mayor Adams has amassed a chorus of support from the leaders of housing organizations from across the city, and this shows his commitment to the initiative which makes me optimistic. HPD Commissioner shared this quote that stuck with me.
“When life hands you empty offices, you convert them to housing. Creating the housing New Yorkers need by converting underused office space is a no brainer,”
- HPD Commissioner Adolfo Carrión, Jr
In contrast to NYC’s struggle to approve more housing, New Rochelle, NY has seen its building permit filings grow sixfold from 2014-2022. Since 2015, over 15 million square feet of new construction has been approved, across 30 projects. Over a dozen projects have been completed and this has added 6,000 apartments to the city’s housing stock. According to the Real Deal, three key things helped contribute to New Rochelle’s development boom:
The city allied itself with a single master developer for the project, Scott Rechler’s RXR, and gave it exclusive rights to develop ~3mm square feet downtown. Read more about RXR’s success here.
Zoning guidelines were tweaked to favor building sizes and setbacks rather than use restrictions. The additional flexibility opened large swaths of land that were previously off limits to multifamily development.
Environmental reviews were nixed for many compliant projects. This removed much of the time and cost required to get projects approved.
The mayor of New Rochelle Noam Bramson credits much of the housing success to the community. Residents view growth as “a benefit.” Could New Yorkers view real estate development in the same way? Right now, that’s a far call. Not all residents and elected officials in NYC are convinced that growth of housing stock is good. That lack of alignment shows itself through the varied positions elected officials take on housing. That makes it difficult to get projects completed. This is what Adams’s plan is trained on changing. It will be interesting to see how next July’s data compares to this July’s.
Source: The Real Deal, WSJ, Office of the Mayor