Landlords Could Skirt Some Zoning Rules In State’s Plan To Boost Affordable Housing
The state has revealed some of the details for its proposal to create more affordable housing in New York City, including where commercial-to-residential conversions could take place and certain zoning rules that may be relaxed.
Gov. Andrew Cuomo said in his State of the State address earlier this month that empty offices should be turned into affordable housing in an attempt to address the worsening housing crisis. A bill included in the 2022 New York State budget sketches out some of the finer details of the plan, which would apply to hotels with fewer than 150 rooms, along with Class-B and C office buildings in Midtown, The Real Deal reports.
The proposal would allow the owners of hotels and office buildings to turn them into residential properties if they make a minimum of 20% of the apartments below market-rate, whereas right now developers get tax-exempt financing if they make certain units affordable.
The legislation would apply to hotels in the outer boroughs and between the Financial District and 110th Street in Manhattan. Office buildings that could be converted would need to be between 14th and 60th streets and between Park and Ninth avenues.
If the plan makes it into law, those converting the properties would be able to work around certain zoning rules on light and air requirements that normally apply to residential. Valerie Campbell, a partner at Kramer Levin who specializes in land use issues, told TRD that a shift in regulation would mean conversions could “work a lot faster than any New York City-generated changes.”
The Real Estate Board of New York backs the plan, with Senior Vice President of Government Affairs Reggie Thomas likening it to the revitalization of the Financial District on Bisnow’s podcast last week. REBNY estimates there is around 150M SF of Class-B and C office space in Manhattan alone, and if just 10% were to be converted that would result in some 14,000 units, per Fast Company.
Some advocates of New York City have praised the plan, saying it is an innovative approach to dealing with the city’s acute housing crisis.
“Some [state] proposals about converting office and hotel buildings to affordable apartments ... those are smart, intelligent things. But the political environment in New York is a tough environment today,” said Witkoff Group founder Steven Witkoff at Bisnow’s New York City Economic Forecast digital summit this week. “New York has always been about the government coming together in a compact with business. I hope that continues.”