The “City of Yes” Plan: Seven Proposed Changes to Alleviate NYC’s Housing Crisis

New York City Mayor Eric Adams announced seven key features of his administration’s “City of Yes” plan in September. Designed to update the city’s zoning laws and spur the development of new housing stock across the five boroughs, the goal is to create 100,000 new homes over the next 15 years. If implemented, it would be the most drastic update to New York’s zoning laws since the 1960s, with effects felt across every aspect of the real estate industry and across the entire city.

The housing portion of the proposal consists of seven initiatives:

1) creating a Universal Affordability Preference, 2) removing parking mandates, 3) incentivizing office-to-residential conversions, 4) encouraging town center upzoning, 5) developing accessory dwelling units, 6) upzoning areas surrounding transit, and 7) allowing the development of larger buildings on campuses.

Each of the seven steps proposes a way to help alleviate the ongoing housing crisis.

Universal Affordability Preference and Removing Parking Minimums

The Universal Affordability Preference (UAP) and removing parking mandates could radically reshape New York’s real estate development market. Currently, the city allows for a 20% density bonus in most high-density areas (those zoned R6-R10) if they build permanent affordable housing for seniors. The UAP puts forth a new incentive, allowing developers to build 20% more housing than allowed by the applicable zoning law if the additional units are affordable, regardless of whether they are for seniors. The proposal would create new zoning districts to fill in Floor Area Ratio (FAR) gaps that would allow the proposed density of the neighborhood to determine the zoning district type, rather than the current system which relies on wide and narrow street determinations. At this time, the definition of “affordable” is unclear, as are the potential incentives for building additional units, however, the current proposal allows developers to drastically increase the number of affordable units to their buildings without having to sacrifice the number of market-rent units. Removing parking minimums further decreases development costs and allows developers to create more housing on each lot. While the city eliminated parking minimums in Manhattan south of Harlem in the 1980s, parking minimums persist across Upper Manhattan and the outer boroughs, requiring developers to add parking, driving up the cost of development, and taking up space within new developments for parking. According to Dan Garodnick, Director of the NYC Department of City Planning and Chair of the City Planning Commission, on average, parking costs $67,500 per underground spot. The proposal allows developers to add parking if desired, but there would no longer be legally required minimums, allowing developers to match the need to their market, avoiding additional, undesired cost. According to the National Law Review, ten cities across the country eliminated parking minimums in 2022. For instance, Seattle eliminated parking minimums in 2012 resulting in 40% less parking and a $20,000 savings per unit. The proposal would also streamline other parking regulations, for example allowing pre-1961 parking special permits to remain effective indefinitely, adding Roosevelt Island to the Inner Transit-Oriented Development Area, and reducing the minimum and increasing the maximum allowable areas of parking facilities. Ultimately, the combination of the UAP and removing parking minimums allows developers to maximize the amount of the property devoted to market-rate housing, allowing for greater return on investment while increasing the city’s total housing stock.

Office to Residential Conversions

The Adams’ administration’s proposal also incentivizes converting office buildings into residential space, a hot topic in recent years. With remote work driving this trend, buildings across the city continue to see dwindling demand for office space while the call for residential units remains high. Most buildings constructed after 1961 (or outside of the city’s central business areas) are unable to be converted to housing as the current law requires any multiple dwelling building to have a FAR of 12, which does not apply to office buildings. The proposed plan legalizes conversions for buildings built through 1990, removing barriers around central business districts so that any building in an area that allows for residential development can be converted into multifamily housing. Further, the new proposed plan allows for current office buildings to convert to a wide range of residential building types, including shared housing where units share facilities, allowing developers to convert buildings without redesigning as much of the building’s interior. According to the City’s proposal, based on past conversions, a 444,475 square-foot-office could be converted to 196 dwelling units. While it is to be determined whether buildings that convert from office to residential would still have to comply with residential zoning and code requirements, this proposal drastically increases the number of eligible buildings for conversion.

Transit-Oriented Development and Town Center Rezoning

Incentivizing transit-oriented development and rezoning areas around town centers could drastically spur development in the city’s outer boroughs. The proposed plan allows for rezoning areas surrounding subway and commuter rail stations around the city, permitting the development of 3-5 story apartment buildings near the stations. These are low-cost buildings to develop yet high in demand since they offer easy commuting into the city’s central business areas. Areas within the Inner-Transit-Oriented Development Area (including the Manhattan Core) would have the Dwelling Unit Factor (DUF) eliminated, and areas outside the core would have the DUF reduced to 500 across all districts. In addition, the proposal also allows for creating cost-efficient Accessory Dwelling Units (ADUs) in backyards and garages across the city by bringing reforms to floor area, setbacks, and sloped roof requirements, bringing buildings built before 1961 into compliance and allowing homeowners to add ADUs. The proposal would define ADUs with a size limit of 800 square feet and provide ADU specific relief from provisions that limit the number of units on lots. The plan’s proposed rezoning within town centers further allows developers to create mixed-use buildings along business corridors, with businesses and retail on the ground level and three to five stories of apartments above. Right now, many of the ubiquitous two-to-four story buildings with ground-floor retail and apartments above were built before 1961 and would be illegal to build today under existing zoning laws. According to Mr. Garodnick, right now there are roughly 16,000 of these buildings in areas currently zoned for one-to-two family buildings, and the new law would open development of these buildings where it was previously blocked. Opening neighborhoods surrounding business districts and transit, combined with the ability to add ADUs in other areas further out, opens areas for development across the city that were previously closed.

Rewriting Campus Building Laws

The final major proposal in the “City of Yes” plan allows for new construction in non-contextual districts on campuses across the city (defined as lots with multiple buildings and open space). Right now, laws prevent new buildings from being developed on church, school, and community campuses across the city since campuses cannot have two buildings regulated by different zoning laws, and many campuses predate the current zoning regulations. The proposed regulations allow for new buildings regardless of existing buildings, further opening new areas of the city to housing development.

Next Steps

The “City of Yes” plan has the potential to spur development of new housing across the five boroughs but, before becoming law, the plan must go through the city’s Uniform Land Use Review Procedure in the spring of 2024. This lengthy process includes an open comment period for the public, all fifty-nine community boards, the five borough presidents, and the City Planning Commission. When the commentary period concludes, the proposal is subject to a City Council vote. Goulston & Storrs’ legal team will be closely monitoring the process, sharing updates along the way.

For more information, or a conversation as to how the “City of Yes” plan affects your business, please reach out to the G&S team.