The Real Estate Board of New York to The Department of City Planning on CEQR No. 24DCP033Y, City of Yes Zoning for Housing Opportunity Draft Scope of Work

Basha Gerhards

Senior Vice President of Planning

November 5, 2023

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REBNY is the City’s leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate. Thank you for the opportunity to submit written comments to the Department of City Planning (DCP) as lead agency, regarding the City of Yes (COY) Zoning for Housing Opportunity Draft Scope of Work (DSOW), CEQR No. 24DCP033Y.

REBNY strongly supports the goals for Zoning for Housing Opportunity, which aim to enable incremental housing production across every neighborhood and ensures that each neighborhood produces its fair share of housing, including below market rate units. Many of the changes as outlined in the Draft Scope of Work are needed by New York City to address the ongoing housing crisis.

New York City’s housing production lags population and job growth. REBNY’s Q2 2023 construction pipeline report showed a 60% drop in proposed multi-family dwelling units and a 72% decline in new filings as of May 2023. NYC permits only 29 units of housing for every 1000 residents and data from the Department of City Planning shows that the per capita housing production in New York City fell behind other U.S. cities such as Orlando, Houston, Dallas, Phoenix and Arizona in the last decade. While production has decreased, rents continue to rise; median rents for a two bedroom in New York City increased 52.3% since 2019. Comparatively, rents in New Rochelle decreased in the past three years due to a 12% increase in its housing production, according to Pew Charitable Trust.

Additionally, New York City ranks second-worst out of 44 major US cities, according to Wharton’s Residential Land Use Regulation Indexand last in University of Arizona’s survey of 83 US cities on zoning rules. Outdated zoning regulations impede housing construction in areas with significant growth potential and most of the land outside of Manhattan is zoned for 1-2 family homes. Increasing housing supply is crucial to addressing affordability and upzoning measures, as proposed in Housing Opportunity, that will expand the City’s capacity for development and take advantage of opportunities to produce housing that are frustrated by current zoning controls.

REBNY is therefore encouraged by the numerous changes outlined in the Draft Scope of Work, such as facilitating transit-oriented development, affordable housing, and the opportunity to construct multifamily housing in commercial corridors. We are particularly pleased to see the changes proposed by the Office Adaptive Reuse Taskforce included, expanding the eligible age of buildings for conversions citywide to 1990, unlocking the potential for thousands of new housing units. We also strongly support the need to enable more landmark transfers and the elimination of parking requirements.

However, the details of the zoning text will matter in our evaluation of the proposal, even of items that on their face we are predisposed to support. To that end, in the subsequent pages of this submission please find a series of questions, comments, and areas for additional study related to key topics such as changes to inclusionary housing, quality housing, transfer of landmark development rights (landmark TDRs), office to residential conversions, and bulk rule changes.

Lastly, REBNY wishes to underscore the need for industry experts and practitioners to be offered meaningful opportunities to review the zoning text before it is referred for public review. Collaboration and interchange between the Department of City Planning and industry experts and practitioners as this zoning text amendment evolves over the coming months is vitally necessary to its ultimate success.

Changes to Inclusionary Housing (1.1c)

Currently, the Inclusionary Housing Program promotes affordable housing on-site or off-site, by providing projects with a floor area bonus. The off-site inclusionary housing option provides flexibility for more challenging sites, whether that challenge is because of programmatic, financing, or physical constraints. The off-site option is an important source of affordable housing, with its higher precent requirement for income-restricted units. It should be preserved where it now exists, particularly in R10 and equivalent zones. More affordable housing will be produced if it is made available as an option on a more widespread basis.

The future of off-site options, and the associated certificates, is not clear in the language proposing the retirement of the IDHA and R10 programs, including how a retirement of these programs would affect existing certificates. We strongly recommend the off-stie program be continued.

We believe that off-site inclusionary housing options should continue to exist going forward. If that is no longer the case, however, then, at a minimum, all off-site affordable housing units produced thus far, and their associated “certificates”, should be vested to allow their sale until supply is exhausted. We would appreciate clarity from the relevant agencies, such as HPD, as to how this will be administered over time.

Additionally, as it relates to the existing inclusionary housing program, we recommend that the department revisit the sunset date of the work force housing option and its ban on use for conversions within the Manhattan Core. The need for workforce housing, defined in the Zoning Resolution as an option that averages at 115% of AMI, with no band exceeding 135% of AMI, clearly addresses a missing middle level of affordability that falls between existing public housing and publicly financed affordable housing, on the one hand, and market rate housing, on the other. According to United Way of New York City, which measured the “True Cost of Living in NYC,” 50% of New Yorkers are housing cost burdened, paying over 30% of their income on housing. However, when accounting for other factors such as childcare and health care, 80% of households in NYC are considered housing cost burdened, or four out of every five households. This same report stated that a salary of $100,000 is needed to afford to live in New York City, a salary that barely exceeds the 100% AMI band for 2023.

The Creation of the Universal Affordability Preference (UAP) (1.1a)

REBNY supports the concept of the Universal Affordability Preference (UAP) proposed in Zoning for Housing Opportunity, but believes the framework requires clarification. The Draft Scope for Housing Opportunity references multiple types of residential and Community Facility uses, some new, some existing, and is very unclear how permitted FAR would be calculated for mixed-use buildings.

As proposed, projects including affordable housing will receive a 20% density bonus, matching the bonus provided in the AIRs program. It is unclear whether this bonus is a flat 20% or if it can be scaled up to 20% based on the amount of affordable housing provided. Moreover, the Draft Scope of Work proposes to apply this formula everywhere, which appears to result in a decrease in the base floor area ratio in certain districts. For example, the base FAR in R10 goes down to 9 FAR to then scale back up to 12 FAR via inclusionary housing.

Overall, the regulations governing how UAP will apply to sites with mixed uses, including in particular those with “AIRS”, “LTCF”, other Not for Profit with Sleeping Accommodations, and pure Community Facility uses, need to be clear and easily understandable. Similar issues regarding how FAR is calculated for various combinations of uses arose under the Zoning for Quality and Affordability (ZQA), resulting in uncertainty and many delays for projects that had a mix of uses.

It is of the utmost importance that private practitioners be given ample time and opportunity to test out these combinations based on actual text, in order to help improve the regulations. This again highlights the need for a practitioner group convened by City Planning to address issues early in the process of drafting the regulations.

Quality Housing Bulk Changes (1.3)

The Quality Housing infill changes proposed in the Draft Scope of Work seek to provide flexibility to building envelopes to spur greater development on campuses and other zoning lots with existing buildings but unused floor area and underutilized open space. The proposal aims to replace “mixing rules” with a simpler set of bulk regulations in R6 through R10 districts to allow lots developed pursuant to height factor (HF) regulations to add Quality Housing development, by replacing open space ratio (OSR) requirements, where applicable, with lot coverage requirements. It should be made clear that these rules will also apply in Special Districts, such as Downtown Brooklyn, where underlying QH bulk rules apply, and District’s special bulk rules do not apply.

The proposal seeks to permit more flexibility to increase housing development. However, a straight elimination of the OSR may have unintended consequences. We strongly recommend that the department and scope consider multiple permutations, inclusive of understanding what should or could happen to existing open space provided via the OSR. This is an area ripe for discussion with industry practitioners who can provide the practical examples and implications of this wholesale change or shades of change. It behooves the department to get these rules right as the provision and access to open space has been subject to vociferous litigation.

Furthermore, permitted obstructions in rear yards and rear yard equivalents should be expanded to include enclosed and roofed recreation area that is required in Quality Housing projects on the first floor (below level of first dwelling unit). This would ease the pressure of fitting in all residential programs in the building footprint.

Flexibility is also needed for infill on lots with community facilities such as churches, that exceed the height limit of the lot and count against lot coverage. This prevents a full build-out of the zoning lot and should be exempt from or deducted from lot coverage. This requires additional study.

Additionally, the Scope of Work proposes to reduce the distance between buildings to mirror MDL regulations, requiring 40 feet distance between buildings below 125 feet in height and 80 feet of distance between buildings above 125 feet in height. Currently, the Zoning Resolution permits 40 to 60 feet of distance between buildings at all heights depending on legal window conditions. While the proposal would help midrise infill, it will inadvertently hurt taller buildings. For instance, R6 sites with Mitchell Lama style housing are often 14-16 stories. If infill is conducted on these sites, with the inclusion of UAP, the building will need 16 stories at least, requiring at least 125 feet in height, where a 40 ft to 60 ft minimum distance would be more beneficial.

Further exemptions are also necessary within Quality Housing buildings for refuse chute rooms, which are required for recycling purposes, and will likely be necessary in the operationalization of organic compost residential collection. Recycling volume has increased considerably over the years and needs to be deducted from floor area calculation. Currently, the Quality Housing program permits 12.5 square feet of deductible floor area per chute room, which results in a cramped, non-ADA compliant garbage chute room on each floor. This deduction should be increased commensurate to the necessary increase in room size.

Lastly, the elimination of the Sliver Law in quality housing districts is reasonable given the bulk controls, including height and setback, which have a fixed height. Other zoning districts including special districts where there is a fixed, height limit, share the same land use principles, and should be considered in this zoning proposal to eliminate sliver restrictions.

Landmarks TDR Program (4.1)

The DSOW outlines encouraging changes to the Landmarks Transfer of Development Rights (TDR) program, which will aim to enhance density and housing options adjacent to landmarked buildings and districts. However, further clarification is necessary regarding these changes’ applicability. In the appendix, we have included a diagram illustrating our understanding of how the expanded catchment zone would function as proposed, and we seek confirmation of whether our interpretation aligns with the intended implementation.

We are particularly interested in understanding how the TDR program will operate in situations involving multiple landmarked buildings on the same block and whether a zoning lot merger is necessary to access additional receiving sites. The analysis should include the limiting factor for sites where zoning height restrictions exist, as that will impede the full utilization of rights as described in the scope.

We also await details as to how the proposed rules will function within a historic district. Here too, where height limits overlay on a historic district, such limits should be considered a constraint on the viability of transfers. Additionally, while not a zoning text question, the interplay with the New York City Landmarks Preservation Commission and its processes related to new construction and enlargement, is an important factor in viability as well.

To better enable transfers within and from historic districts, we encourage the department to study an alternate option in which a “density bank” is established for each historic district, where air rights could be sold and transferred within the community board boundaries or within a half-mile radius. This framework aligns with practices in areas such as the South Street Seaport subdistrict and in the inclusionary housing program.

Lastly, the department should look at the structure of Section 74-711. The purpose of that discretionary action is to serve a preservation purpose, which will not be compromised by changes to the land use side of the equation. Elsewhere in the scope, the department recognizes the adverse impact of bureaucratic processes, and we would encourage a similar lens be applied to 74-711s. Use changes should not require more than a certification, and bulk changes should not require more than an authorization. These changes would streamline the approval process.

Conversions (1.4)

REBNY endorses the inclusion of recommendations proposed by the Office Adaptive Reuse Taskforce in the Draft Scope of Work, including the date change to 1990 for conversion applicability in Article 1, Chapter 5. The proposal would also remove restrictions on residential uses in C6-1G, C6-2G, C6-2M and C6-4M districts. However, we urge City Planning to remove such restrictions in C8 districts within Manhattan as well, allowing for greater geography of areas eligible to convert and which are already adjacent to high density residential uses. To fully make “existing rules work better,” the department should remove the current “open space equivalent” requirement for conversions included in Section 15-12 of the Zoning Resolution, replacing this with a requirement that recognizes and counts high quality indoor amenity spaces and the range of green or recreational square footage that can be made open and available space to residents, without being open to the sky. The new text should also clarify that the new changes regarding the dwelling unit factor apply to the conversions.

Additionally, the department should examine requirements for the retention of office space in conversions in C6-2M and C6-4M Districts, and the non-residential preservation requirement in M1-6D Districts, to ensure that spaces subject to preservation requirements under these outmoded regulations can be easily converted to residential use. The Draft Scope of Work lacks mention of special districts in relation to conversions and the office preservation requirements, but a broader elimination of this requirement should be included so that districts like Hudson Square and Flatiron are treated equally.

As with the consideration of the landmarks TDRs, many of the most suitable office buildings for conversions may also be landmark eligible, in a historic district, or an individual landmark. Coordination with the Landmarks Preservation Commission (LPC) is important, and both zoning and landmark approvals should be examined to identify process improvements and reduce redundant approvals, with the goal of encouraging more obsolete buildings to become housing, not less. This should include changes to 74-711, Section 74-79 and to the scope of landmarks work subject to public hearings when the public need has been so clearly articulated and justified. Lastly, at the time of referral and given the present legislative landscape in Albany, the proposal should be clear as to which vintage of building can convert all of its floor area, and which vintage of building cannot, as a result of the limitations on conversions within the State Multiple Dwelling Law.

Permitted Obstructions (4.14)

REBNY supports the objectives outlined in the Draft Scope of Work, aiming to modernize the zoning resolution. Zoning for Housing Opportunity presents an opportunity to address changes to the definition of Floor Area Ratio as it relates to present day realities of safety and operations.

First, it is crucial to acknowledge the heightened significance of access to outdoor space, including passive recreation areas. The Zoning Resolution requires specific uses to be enclosed, and through that enclosure counts those spaces as zoning floor area of the building. For example, rooftop terraces and parapets greater than 3’8” constitute an enclosure, which makes the entire roof or terrace count as floor area. Additionally, parapets greater than 4 feet are not permitted obstructions for height and setback purposes. These limitations defeat the objective of providing comfortable and safe recreation space for residences on tall buildings.

To that end, REBNY suggests that un-tinted, transparent glass windscreens be permitted up to 8 feet above the surface of a roof, so long as the opaque portion of the enclosure is not higher than 3 feet 8 inches above the surface. Furthermore, we suggest that Sections 32-41, 32-411 and 32-412 of the ZR mirror and codify the guidelines outlined in the Department of Buildings Bulletin regarding safety requirements for outdoor spaces. This would exempt rooftops and terraces provided as passive recreation space accessory to a principal use within the building from enclosure requirements in 32-41 and 42-41.

Second, with the newly mandatory composting and other sanitation garbage collection requirements, the scope of work should include appropriate floor area deductions to accommodate these requirements from other agencies. These deductions should accommodate the increase in recycling storage needs, new DSNY requirements for refuse storage collection and any operational space necessary to facilitate collection throughout a building such as residential floors’ trash chute rooms, as currently required under Quality Housing. Refuse compactor rooms’ sizes are growing and should be deductible floor area if provided on the first floor. At grade spaces will be best operationally to accommodate roll-off-roll on ("RoRos”) containers in large buildings, and those containers are the future of trash containment. Including a zoning deduction for trash storage in accordance with the new department of sanitation program is therefore imperative.

Lastly, as previously raised in the review of Carbon Neutrality, the zoning text needs to be updated to account for FDNY FAR exemptions pursuant to local law. The last adopted FDNY code revisions, Fire Code Sections 511.7 and 511.8, have new storage and access requirements that are not accounted for in the zoning text but should be per Local Law 47 of 2022. According to the FDNY code, 511.7 has a delayed effective date, which states that, “this section shall take effect one year from the date of adoption of a zoning amendment exempting from the calculation of the building floor area ratio...” It is prudent for this exemption for FDNY mandated storage spaces to be explicitly stated in the zoning text consistent with local law.

Streets wall requirements (4.2)

There is a myriad of street wall requirements throughout the Zoning Resolution, which vary in what they require and, occasionally, are inconsistent in how they say it. The Draft Scope of Work proposes to establish a new system of street wall requirements, decoupling street wall regulations from zoning districts to establish a new system based on street wall typologies. However, many street wall provisions don’t address issues such as if the street wall is mandatory, the required distance from the street line, or the required length or percent of the zoning front line. City Planning should ensure these clarifications are addressed in the zoning text to provide greater consistency for architects and developers.

The scope is not clear how this text organization will differ or build up on what is proposed in the Zoning for Economic Opportunity text that is currently in public review. As with that text, we want to raise the need for constructive dialogue between zoning writers and industry practitioners in getting the details right. Flexibility should be the goal. Yes, it is important to achieve consistency in text drafting and in requirements, but it is equally important that inflexible, onerous, or prescriptive rules are not standardized in that process.

Bulk Regulations (2.1c)

The Proposed Action would reduce the depth of the required rear yard and rear yard equivalents in low-density districts. In line with this proposal, we suggest City Planning also allow enclosed connections between two buildings on two streets, which is not currently permitted in any Residential district. Additionally, the proposal includes changes to side yard requirements, reducing the space required in low-density districts. An elimination of the requirement to provide side setbacks in Low Density districts adjacent to high density Residential Districts should also be included, as this requirement has little or no urban design benefit and hinders logical planning of dwelling units on affected floors.

Allowances for Irregular and Challenged Sites (4.3)

The Proposed Action would extend relief to irregular and challenged sites for which compliance with underlying zoning regulations may be difficult. Within this proposal, we urge City Planning to allow split lots created in a zoning lot merger to utilize the controls applicable to pre-existing split lots, allowing for greater flexibility in the distribution of FAR around the zoning lot and the “25-foot rule.” The impacts to neighborhood character would be minimal while providing the opportunity for more interesting building design and the development of more affordable housing. In addition, ventilating windows should be permitted for new development if set criteria is met over a lot that is not part of the zoning lot merger, if there is a permanent easement over the adjoining building and if there is 30 feet of clear space.

Additional Items for Clarification

REBNY supports changes proposed to the Dwelling Unit Factor (DUF) (Action Item 1.2) to encourage more flexibility in unit size, and therefore unit counts, in new residential construction, through the elimination of the DUF within the Inner Transit Oriented Development Area and a reduction in the square footage requirement outside that geography in high density residential neighborhoods. It is important to note, however, that building and housing maintenance code requirements will still apply. However, it is unclear if these DUF changes could apply to existing buildings that could seek to add density through alterations that utilize the new controls on dwelling unit size. Applicability should also be clarified regarding conversions in high density commercial districts outside of Manhattan.

The Scope is also not clear as to whether DCP intends to amend the text governing the lapse of special permits so as to treat two (or more) abutting buildings on a single zoning lot as two (or more) buildings rather than as a single building. Doing so would ensure that the conditions required to “vest” the special permit are the same in multi-building projects regardless of whether the buildings abut each other or are separated. DCP should clarify.

Lastly, the Proposed Action seeks to simplify the Railroad Right-of-Way Special Permit (Proposed Action 4.9), clarifying the definition pertaining to when the right-of-way exists and when zoning actions are required. Currently, the lookback period dates back to the 1960s to understand if a zoning lot was used by a railroad and requires a special permit to redevelop the site. The effective date of when a lot was a railroad or transit yard use should be brought up to present day. The proposal identifies that a reduction or elimination of approval procedures for developments on a railroad right-of-way is necessary, so it follows that the department should move this action from a special permit to an authorization as part of this action.