Here's What Developers And Multifamily Owners Are Saying About The Citywide Inclusionary Zoning Law That Just Passed
Tuesday’s vote on creating the city’s first citywide zoning agreement in decades has drawn a range of reactions from the industry. Here are some that stuck out to us.
Many—like the protesters that disrupted the session during the vote, in what could be read as a sign of the times—say the bill doesn’t go far enough. Although he took a decidedly more nuanced tack, REBNY president John Banks (snapped above at this year's REBNY banquet with REBNY EVP James Whelan) put in his two cents in a statement that indicated the bill could do more.
“While the absence of an as-of-right tax abatement program limits its effectiveness,” John said, “Mandatory Inclusionary Housing is still a valuable tool in the belt of the mayor to promote the construction of more affordable housing.”
John went on to make the point that the real crux of the matter is in the incentives.
He didn’t say that the bill has no teeth without 421-a, but he came close.
“The real catalyst for change,” the statement goes on, “is going to be in the neighborhoods that the city looks to rezone with a mandatory inclusionary housing requirement, the density incentives coupled with a tax abatement program will make these locations more attractive for development and create more activity in these markets.”
Cayuga Capital Management principal Jacob Sacks says it a bit more bluntly, making the point that the new regulations may ease the city’s affordable housing shortage, but actually getting projects built is another matter.
“Without the 421-a tax abatement program in place, and taking into account current high construction costs and high land prices,” Jacob wrote us in an email, “new rental projects don't pencil out and the pipeline of new residential rental projects will rapidly dry up.”
Patrick Siconolfi, executive director of the Community Housing Improvement Program (CHIP), an advocacy organization that represents about 3,500 owners of rent-regulated multifamily properties in the city, said the bill isn’t just off the mark, but misses the point altogether.
“They’re solving the wrong problem,” according to Patrick, who says factors like demolitions, fires and apartments owned by mom-and-pop landlords going to uses other than housing, cause about 7,500 units a year to be lost. By his math, the de Blasio administration’s goal of building 80,000 new subsidized units over 10 years—which the new bill is intended to help achieve—barely keeps pace.
CHIP's answer? Make building easier by making zoning changes for individual projects easier to pull off, by easing the real estate tax burden on owners, and by making it easier to relocate rent-stabilized tenants if doing so will mean getting them into newer, larger buildings with more affordable housing units.
Slate Property Group principal David Schwartz focuses on the nuts and bolts, praising the bill’s redefining of height limits, allowing building heights to be defined by the number of floors rather than a rigid ceiling height limit. He also told us he appreciated the scaling back of parking requirements the bill calls for, saying that his projects—and most in the city, whether they're affordable projects or not—don't see a big demand from residents for parking if they're accessible to transit.
“With 8.5 million people it’s never gonna be perfect,” David says. “Are there some things I would change? Sure, but overall, it’s a great proposal.”
Nelson Management is primarily an owner of existing multifamily assets throughout New York City, but has multiple development projects in the pipeline. President Robert Nelson takes a pragmatic but hopeful view of the new regulations.
“At the end of the day, you’re not going to plunk your money down unless it makes economic sense,” he tells us. “The mayor understands that, and that heartens me. You still have construction and labor costs, so when you put all this into the soup it’s not going to taste good unless it’s done right.”