The Mayor's Housing Plan Runs into First Major Test

 The site would consist of two towers that span a small sliver facing both 17th and 18th street (morris adjmi via nytimes)

The site would consist of two towers that span a small sliver facing both 17th and 18th street (morris adjmi via nytimes)

Mayor de Blasio’s sweeping affordable housing plan passed in March has run into its first serious challenge in the form of a proposed development in the Ladies’ Mile historic district in Chelsea.  At its core, the issue comes down to at what scale should a development fall under the new housing policies.  As with any type of development in NYC, this is a maddeningly complicated question.  The answer, expected next week, will have a huge impact on how the mayor’s policy will play out.

Let’s review the housing plan quickly.  Back in March, the NYC City Council passed two major proposals to address the affordable housing crisis in the city.  The first was the Mandatory Inclusionary Zone plan, which requires every residential development to have a certain percentage of affordable units.  The second was the Zoning for Quality and Affordability plan, which sets out design and size requirements based on the location of a proposed development. 

Here’s where it gets a bit confusing.  Though a developer has several options for how many units (and at what level of ‘affordable’) to set aside for the mandatory inclusionary housing (MIH), the policy appears to allow some wiggle room because it doesn’t expressly state at what number of units a development falls under the policy.  The assumption could be that every residential development does, maybe every newly submitted development does, or maybe every large development does.  Whether the city allows for a certain amount of nuance and negotiation - or not - has a huge impact on future developments. 

 (morris adjmi)

(morris adjmi)

Enter the current proposal by Acuity Capital for a 17-story building containing 62 condos on 6th Ave between 17th and 18th.  The site is currently a parking lot but would also encompass two surrounding buildings that are protected under historical preservation laws, though the Landmark Commission gave the development the go-ahead back in 2014 (obviously before the mayor's new zoning laws. It's unclear if there is an issue with it under the new ZQA requirements). The developer needs to build around those buildings rather than demolish them and also needs a special permit from the City Planning Commission to build a structure larger than 6 stories at that site. The air rights for the existing structures would transfer to the new development allowing them to add an additional number of stories on the existing square footage.

Because the new development would be larger than currently allowed, some leaders, including Manhattan Borough President Gale Brewer, argue that the development should be subject to the MIH requirements.  The concern here is that any nuance or exemption will create room for developers to get creative and avoid the MIH requirements in other ways.  If the goal of the policy is to require affordable housing units from every development, then it should do so.

 (morris adjmi)

(morris adjmi)

The mayor’s office (and the developer) appear to think that the development is a ‘rejiggering’ of zoning rather than a full enlargement of the site that would trigger the requirements. The concern for the city is if the plan is deemed too onerous by developers, they might sue the city and threaten the laws (or just not develop more housing).  The courts have previously overturned housing requirements in other cases, so the city is eager to avoid that risk, particularly since the laws are still so new.

The City Planning Commission will decide on the issue on Monday.  According to several people interviewed for the NY Times article, even the Commission appears to be split about what to do.  There is some discussion of a compromise where the Commission would require a percentage of the additional units available through the air rights allowance to fall under MIH requirements. That would only create a handful of protected units, but might be enough to get through the Commission. They could also presumably make the argument that the development has been in the pipeline before the housing laws were passed and shouldn't be subjected, but I haven't seen that. (I also haven't seen if the development runs afoul of the new ZQA laws.)

The Commission and the Mayor seem wary of this case creating too large of a precedent going forward and that’s understandable. However, the reality is that the new housing plan is a major departure for the city and these edge cases must have even basic guidelines as quickly as possible.  It's also important, even though this specific case wasn't impacted, to clarify how the new housing laws will interact with other regulations, such as historical preservation.  If other policy tools can be used to prevent the housing requirements, affordable housing targets could be undermined.  Some level of nuance and negotiation are already accounted for in the city’s zoning laws and its ULURP process, so developers expect complexity in NYC; it’s the cost of doing business.  But for the mayor’s plan to take off and meet its goal of 200,000 affordable units, it needs to avoid costly legal battles with developers and, more importantly, get developers to buy-in.  It’s not pretty, but nothing in the built environment is.