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'Blueprint For The Future:' How Economic, Public Health Crises Could Reshape New York City's Rezoning Process

As New York City looks toward its recovery, the future of the city's land use policies — standing at the intersection of a social, economic and public health crisis — is taking center stage.

With communities of color overwhelmingly bearing the brunt of the crisis, the economy in shambles and questions around the ethics of rezoning being raised by advocates and public officials alike, it would be nearly impossible for the city to not rethink the way that it rezones in the future, land use experts told Bisnow.

“The question of racial equity and the consideration of the impact of city actions on racial equity can only come more to the forefront than it has in the past,” said Frank Chaney, an attorney in Rosenberg & Estis’ transactional department and a land use and rezoning expert. 

Over the past month, two major rezoning proposals — in Brooklyn's Industry City and Northern Manhattan's Inwood neighborhood — have ignited conversations around what the rezoning process should accomplish, what should be considered and who will be impacted.

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A courtyard at Industry City, a major development in Sunset Park, Brooklyn.

The first six months of 2020 propelled the city, the state and the country into a crisis that has illuminated systemic racism in many facets of society. In the city, the public hospitals in predominantly Black and brown neighborhoods saw more deaths from the coronavirus than those in white neighborhoods. Businesses in these same neighborhoods were hurt at a disproportionate rate, and communities of color saw more job losses overall.

For years, housing and community activists have railed against the rezoning process, saying the lack of analysis around how communities of color are affected causes gentrification and displacement.

Alex Fennell, a former political director for Churches United for Fair Housing and current housing and racial justice advocate, was involved in crafting legislation that would require a racial impact statement study be done before all future rezonings. The bill is still under consideration in the New York City Council's Committee on Land Use.

“I think the moment to be talking about this and to be discussing this couldn’t be more important than to be discussing it right now,” Fennell said. “Almost every negative impact COVID has caused has disproportionately harmed Black and brown communities the most, and I would say that part of that is also tied up in land use and zoning and allocation of resources.”

Experts in land use said the racial disparities revealed during the pandemic will surely come into play in future long-term planning.

“Rezonings are basically a blueprint for the future planning strategies for neighborhoods,” said Jaclyn Scarinci, a land use attorney at law firm Akerman. “I think city planning will be looking at areas that were extremely hard hit by COVID and how the racial inequities that have shown through this pandemic, how the potential rezonings will affect those specific issues.”

A Push For Affordable Housing

Rezoning historically underserved neighborhoods was a key part of Mayor Bill de Blasio’s pledge to dramatically increase the number of affordable housing units in the city. 

His Mandatory Inclusionary Housing and Zoning for Quality and Affordability policy forced developers to make a portion of housing affordable if they were building in a rezoned area, which his administration estimated would create 12,000 affordable units over the next decade. Four years after the policy was enacted, only 2,000 inclusionary housing units were built, according to the Manhattan Institute.

De Blasio also pitched 15 neighborhood-level rezonings that would pipe public money into those areas with the ultimate goal of creating more affordable housing. Rezoning plans in East New York, Jerome Avenue and East Harlem have already been enacted. 

But de Blasio’s plan has many critics: Some housing advocates say the program doesn't provide enough housing for the city’s poorest residents, making it impossible for them to remain in their neighborhoods after the process.

The Inwood rezoning, one of de Blasio’s neighborhood plans, and the private Industry City rezoning have ignited conversations around what the rezoning process and impact statements should account for over the past month. 

The Inwood rezoning aims to add 1,600 affordable units and preserve 2,500 units. The plan would funnel $50M of city funds into schools in the Northern Manhattan neighborhood, restore parks and invest $15M into a new performing arts center focused on immigrants. It would also add a library and two new parks to sit along the Hudson River.

When the rezoning was approved in 2018, real estate insiders told Bisnow there had been little incentive for private developers to build housing without the rezoning. 

“The achievable rents could not justify the price to build,” Cushman & Wakefield Capital Markets Group Director Ian Brooks told Bisnow at the time. 

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Mayor Bill de Blasio, speaking at a press conference for the Office of Public Advocate for the City of New York.

There were 2,500 community stakeholders involved in the process and the community's priorities were taken into account during the planning, according to the city’s Economic Development Corp.

“The approval of the Inwood neighborhood rezoning means a fairer, stronger future for a community that has experienced decades of disinvestment,” de Blasio said in an August 2018 statement when the rezoning was approved.

More than a year later, that rezoning was overturned by New York Supreme Court Justice Verna Saunders after a community group called Inwood Legal Action sued the city, claiming that it hadn't included a racial impact statement as part of the environmental impact statement mandated for rezonings. The city argued it wasn't required by law to include a racial impact statement. 

“It’s common sense that the impact these changes have on our neighborhoods need to be studied,” Karla Fink, spokesperson for the Inwood Legal Defense Fund, told Bisnow. “[The city] has continued to argue strenuously that they shouldn’t have to study the racial impact of the Inwood rezoning, and they refuse to study their previous predictions and the outcomes.” 

A panel of five appellate court justices unanimously shot down Saunders' ruling last month, reinstating the city's rezoning plan. 

Affordable housing advocates say affordable housing is dictated by what is considered "affordable" for the median household income in Manhattan, not the median household income for Inwood, which is significantly lower. This, combined with the introduction of new market-rate housing, could displace people of color who call the neighborhood home and drive minority-owned businesses to close, activists say.

“We are not opposed to development, we’ve never been opposed to development,” the group’s co-chair, Cheryl Pahaham, told Bisnow. “All we are asking for is for the community to have more of a say in the land use processes.”

Inwood Legal Action vowed to appeal the latest decision and is currently planning more ways to ensure neighborhood locals are involved in the ongoing development. In the announcement of an appeal, Panaham said that the rezoning would displace people of color — who make up more than 70% of the neighborhood.

After the court battle, development in Inwood's rezoned area still has some uphill battles. With cuts to the Department of Housing Preservation and Development, city plans to build more than 1,500 affordable units in the neighborhood could be at risk.

In Sunset Park, Brooklyn, the owners of Industry City filed a proposal to rezone part of the development in March 2019. The developers, Angelo Gordon & Co. and Jamestown, proposed new hotels, offices and retail space.

Industry City was met with a six-month-long battle in City Hall: Council Member Carlos Menchaca, who represents Industry City and Sunset Park, said he wouldn't give his approval without major changes. Then, the coronavirs pandemic hit.

In late July, a spokesperson for Industry City's developers told Politico that the plans may not be moving forward at all. Days after the announcement, Menchaca fervently railed against the rezoning in an Instagram video, calling on the developers to withdraw their application before the city's land use review process began again. 

“The pandemic has exposed the glaring disparities faced by the most vulnerable in our communities,” he said in the video. “No one should be forced to leave their home because they cannot afford their own neighborhood.” 

Menchaca situated his argument against the proposal in the crisis of the moment, claiming de Blasio and others in the council were planning to propel the city’s economic recovery through the “pro-corporate playbook.” 

“Our city land use process? It favors corporate developers as it profits off of displacement of working-class New Yorkers,” he said. 

After Mechaca’s statement, the private rezoning proposal seemed all but dead — other council members have historically deferred to a district's representative in land use cases. But several council members broke with the tradition in recent days, saying that they couldn't turn away the economic prospects of the rezoning and would support the proposal despite Menchaca’s protests — reviving the project once again.

“We believe [the] City Planning Commission will vote on the application within the next two meetings or so ... meaning by early September or sooner ... and then onto the Council,” Industry City spokesperson Lee Silberstein told Bisnow in a statement. “The fact that members from other parts of the city are weighing in with their support — unprecedented — is encouraging. The final [environmental impact statement] should be available at some point in the next few days — a major milestone.”

The Future Of The Process

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Developer Eli Weiss is set to build affordable housing in Inwood now that construction is “gearing back up” on the sites his company, Joy Construction Corp., owns. 

Weiss said that while he understands the passion of the activists who opposed the rezoning, the public distrust in the government and the development community could hinder the ultimate betterment of the community.

“I think it’s really unfortunate when you want to throw out the baby with the bathwater,” he said.

As rezoning has come under fire, developers have doubled down on the process, saying that rezoning — when it is done correctly — does not displace folks, but instead increases affordable housing for all incomes.  

“There’s been a connection to rezoning with gentrification and displacement and other things when really you just have a lack of supply,” BRP Cos. co-founder Meredith Marshall said at a Bisnow event last May

Ultimately, Weiss said, the only way to change the environment review process is to do so through enacting policy. With the history of systemic racism looming more prominently over every aspect of New York City life right now, changes to policy or ways of zoning could be on the way.

Fennell said the zoning tools used today are remnants of early 20th-century city planning explicitly used to covertly maneuver around Supreme Court precedent that outlawed race-based zoning. 

“Zoning was never race-neutral, and it’s not race-neutral currently,” Fennell said. “The way that we look at zoning and the way that we perform zoning are using the same methodologies and theories as we were in 1917 that have just been updated.”

Fennell believes that displacement and geographic marginalization of people of color cannot be overcome without changes to the system. 

“If we’re expecting an outcome that has a positive racial impact that promotes integration, that promotes access to opportunity for historically marginalized groups, if we are assuming that people of color can be helped and that these problems that were created by zoning tools can be alleviated by the current tools that we have, we’re just lying to ourselves,” she said. 

On Bisnow affordable housing webinar last week, HPD Commissioner Louise Carroll discussed the complexities of rezoning, juggling the need to invest in communities with the reality that the investment may bring in new residents. 

“This is tricky. So you have the history of redlining and racism in this country and in the city and disinvestment in certain areas that people of color live in, and so we as public servants cannot continue to see disinvestments in these neighborhoods,” Carroll said. “And when you invest in the neighborhood, it becomes attractive and people want to live there.”

The answer, Carroll said, is developing more housing. 

“I think if you come to a point where there is an oversupply, prices will go down. The answer cannot be that we don’t invest in neighborhoods and we continue generation after generation to see blight in these areas,” she said. “So it is a tricky thing to get right, I am not saying we always get it right, but we certainly try.” 

As the city takes on its next rezoning processes, including in the rapidly gentrifying Gowanus neighborhood in Brooklyn, it will have to navigate a new world, fanned by the economic and public health crises that still hold New York in their clutches. 

“It is really going to be a question of what the next administration decides to do,” said Chaney, a Rosenberg & Estis land use attorney. "If people don’t have jobs and they don't have any money at all, no matter how affordable you make the housing, it’s not going to matter. So then the most important thing becomes just getting people back to work.” 

CORRECTION, AUGUST 10, 2020, 5:40 P.M. ET: Jaclyn Scarinci is an attorney at the law firm Akerman. A previous version of this article misspelt the firm's name. This story has been updated.