New York City Council Speaker Julie Menin has expressed the view that the council should be more proactive than it has historically been in matters of land use and zoning in order to address the city\u2019s housing and affordability crisis.\u00a0\u00a0<\/p>\n
Typically, the council\u2019s role has been within the confines of the Uniform Land Use Review Procedure (ULURP), whereby zoning actions reviewed by the local community board and applicable borough president, and then passed by the City Planning Commission are ultimately subject to the council\u2019s right to review and either approve, approve with modifications, or disapprove the item.\u00a0 <\/p>\n
Menin describes this role as being generally too reactive, rather than proactive, and announced her plan to change this dynamic. Specifically, she favors the council putting forward land use plans of its own.\u00a0\u00a0\u00a0<\/p>\n
One proposal Menin has discussed is unlocking the potential to utilize city property to build affordable housing. She has noted there are about 215 public library branches in the five boroughs, and many of them are suitable to build affordable housing on, and at the same time, make capital improvements to the libraries, which serve as important centers of learning in the city\u2019s neighborhoods in need.\u00a0\u00a0<\/p>\n
Libraries are not directly owned by the city but rather three separate independent nonprofit corporations (New York Public Library, Brooklyn Public Library and Queens Public Library) that operate in a long-standing partnership with the city, with the mayor and council speaker as ex-officio board members, and rely heavily on city funds for their operating budgets.\u00a0 Consequently, it may be possible for the city to effectuate the creation of affordable housing using library properties. This type of innovative approach is worthy of further examination and consideration.\u00a0\u00a0Of course, a side benefit would be to provide some funding for the libraries themselves.\u00a0\u00a0<\/p>\n
Many city-owned and library properties are \u201cunderbuilt,\u201d meaning the applicable zoning allows a building with more \u201cfloor area,\u201d or square footage \u2014 sometimes significantly more \u2014 than what is contained within the existing building. Constructing the unused square footage on top of the existing structure may be possible in many circumstances, and would not necessarily require any zoning changes.\u00a0 The new square footage could be built on top of, for instance, a library, \u201cas-of-right\u201d in compliance with the applicable zoning district\u2019s bulk parameters (i.e., building height and setback, yard requirements, etc.).\u00a0\u00a0 \u00a0<\/p>\n
However, there may be situations where the available square footage cannot practically be built atop an existing library or other building. This may be due to operational concerns, building structure\/engineering, or because the applicable zoning district\u2019s height limit precludes utilizing all or a portion of the available buildable square footage. Here, the ability to transfer the unused square footage, or \u201cdevelopment rights,\u201d to another property where they could be utilized, is essential.\u00a0<\/p>\n
\u00a0Generally, zoning allows development rights to be transferred only between contiguous properties within the same zoning district. For example, if a 7,500 square foot property is allowed a floor area ratio (FAR) of 10, for 75,000 square feet of building, but only has a 50,000-square-foot-building, the unused 25,000 square feet can be sold and transferred to a neighbor through a private business transaction. Then the neighbor could build 25,000 square feet more than they previously could, so long as the resulting building otherwise complies with zoning.\u00a0<\/p>\n
In this case, a library should be able to transfer such unused and unbuildable development rights. But zoning\u2019s general rule limiting a transfer to contiguous properties in the same zoning district could prevent the development rights from being used if a neighboring property neither wants nor is able to use the development rights, or is in a different zoning district. Consequently, the possibility of a \u201cremote\u201d transfer to a non-contiguous property should be considered.\u00a0<\/p>\n
There are current mechanisms for \u201cremote\u201d transfers of development rights in the city\u2019s zoning resolution. For example, development rights from a landmarked building can be transferred through a certification from the city planning chair to any property on the landmark\u2019s block, as well as any property across a street from the block.\u00a0 Another example is that development rights from a \u201clisted\u201d theater can be transferred anywhere within the \u201cTheater Subdistrict,\u201d an approximately 50 square-block area in Manhattan\u2019s Broadway theater neighborhood, through a city planning chair\u2019s certification.\u00a0 <\/p>\n
Further, qualifying affordable housing can generate floor area to be used by another site within half a mile or the same community board, under zoning\u2019s \u201cUniversal Affordability Preference\u201d or \u201cMandatory Inclusionary Housing\u201d (MIH) programs, if the receiving site meets certain zoning criteria. Such concepts should be evaluated as potential models for \u201cremote\u201d transfers of city and library development rights.\u00a0<\/p>\n
For instance, analogous to the affordable housing example, if a public library has unused development rights that cannot be built atop the library, the library could transfer such unused development rights to a receiving site anywhere within the same community board or half a mile of the library. As affordable housing is urgently needed, the receiving site would either be mapped for MIH or the receiving site would contractually agree to build affordable housing. <\/p>\n
Those programs require up to 30% of the building\u2019s residential square footage be permanently set aside for affordable housing. The transfer mechanisms discussed above generally limit the amount of square footage the receiving site can obtain to 20%-30% of the square footage it is otherwise allowed. <\/p>\n
Limiting the transferred development rights to such a percentage and while requiring that 20%-30% of the receiving site square footage be affordable under MIH would likely make such acquisition economically impracticable for a for-profit developer unless the project benefits from the State\u2019s \u201c485-x\u201d tax incentives or receives some other subsidy.\u00a0 <\/p>\n
For example, a 10 FAR project that can be entirely market rate \u201cas-of-right\u201d receives 2 FAR of city or library development rights to increase to 12 FAR total. If the city then applies MIH or MIH-like requirements to the entire project, so that, for instance, 25% (here, 3 FAR) of the project\u2019s residential floor area must be affordable housing, then the project would have only 9 FAR of market rate housing, which would put it in a worse economic position than prior to the development rights acquisition.\u00a0<\/p>\n
One solution would be to allow the receiving site\u2019s FAR to increase by more than 30%, so that a greater portion of the transferred development rights could be used for market rate housing, with the result that the market rate housing would cross-subsidize the project\u2019s affordable housing. Increasing the total square footage allowed would permit both more market rate and affordable housing to be constructed.\u00a0 <\/p>\n
This is already the case with exceptions to the landmarks transfer limit discussed above, in certain zoning districts found in the Special Midtown District. In other situations where remote transfers are allowed, such as from the South Street Seaport subdistrict in Lower Manhattan, a maximum of 21.6 FAR is allowed in total.\u00a0 While 21.6 FAR, for instance, may not be appropriate in all cases, it would be reasonable in many central business districts such as Midtown and Lower Manhattan.\u00a0 Another solution, which would require further analysis, would be to require the receiving site to pay into a fund that would go toward the creation of affordable housing or other infrastructure investment, as an alternative to building affordable housing on the receiving site.\u00a0\u00a0\u00a0\u00a0<\/p>\n
Such a remote transfer mechanism would need an amendment to the zoning resolution, requiring both the City Council\u2019s and the City Planning Commission\u2019s approval. The City Charter allows the Council to initiate an application for such an amendment by a two-third\u2019s vote of its land use committee.\u00a0\u00a0 \u00a0<\/p>\n
Further, the disposition of city development rights has typically been effectuated through ULURP, since the city has traditionally attached a \u201cnegative easement\u201d to the disposition so that it is a disposition of the city\u2019s real property and thus subject to ULURP under the City Charter.\u00a0\u00a0<\/p>\n
While ULURP might arguably not apply to library development rights since they are not technically city-owned, and certain dispositions may qualify for the \u201cexpedited land use review procedure\u201d enacted by ballot proposal last fall, in order to better facilitate the transfer of City development rights so they are not subject to the time and expense that ULURP entails, alternative processes for \u201cremote transfers\u201d would add a valuable tool.\u00a0\u00a0 \u00a0<\/p>\n
Following the analogy of the landmarks development rights transfers, these transfers could be subject to a City Planning Commission chair\u2019s certification, but appreciating that the council would likely want to protect its prerogative under ULURP, they could require that such certification be referred to the applicable council member, as currently required for arcade infill certifications in Lower Manhattan and open air caf\u00e9 certifications in plazas.\u00a0 <\/p>\n
And in certain circumstances, for example where the amount of development rights transferred is modest, the city could consider allowing such transfers \u201cas-of-right\u201d subject only to the city\u2019s other, non-land-use requirements for dispositions (i.e., requests for proposals, background checks, and the like). <\/p>\n
Given Speaker Menin\u2019s ambitious agenda and the city\u2019s critical need to create housing, creative ideas deserve further study and exploration.\u00a0\u00a0\u00a0\u00a0\n<\/p>\n
Dan Egers,\u00a0a shareholder of Greenberg Traurig, focuses his practice on New York City land use and zoning. The views expressed are his own.\n<\/p>\n
Ed Wallace, co-chair of Greenberg Traurig\u2019s New York office, is counsel to the Citizens Budget Commission.\n<\/p>\n
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