A new measure to solve the city’s housing and office crisis is on the table, but it depends on whether Mayor Eric Adams has the muscle to get it through an obstructive City Council.
The housing-shortage city needs 473,000 new apartments by 2032, according to the Regional Plan Association, but built just 11,000 last year and expects to build just 45,000 by 2022. Meanwhile, office vacancy rates are at a record high of 20%, and most of the space is in old, unattractive buildings.
Converting dilapidated office buildings into housing has been the proposed silver bullet, especially on the heels of a highly publicized plan by the city of Chicago to give large subsidies to landlords to renovate four vacant downtown buildings.
But a piecemeal, place-specific program like Chicago’s would not be effective in New York, policy experts told The Washington Post.
“This is apples and watermelons,” a source told The Post. “New York’s office market is more than twice the size of Chicago’s, and there are literally thousands of buildings in trouble, not just a few.”
The biggest obstacle to housing conversion in New York is not cost (several projects over $500 million are underway, such as 25 Water Street), but outdated zoning rules that severely limit the square footage and number of buildings that can be converted.
The current proposal would relax current rules that prohibit renovations in parts of downtown Manhattan on buildings built after 1961 or after 1971. The new rules would allow renovations on more recent buildings dating back to 1991, which would cover thousands of buildings.
Another change would expand the areas in which residential conversions are permitted to nearly 90 percent of the five boroughs, from currently limited to Midtown and Downtown Manhattan and a few other high-density areas, such as Long Island City.
The measure is currently under consideration by borough presidents and community committees, with council expected to vote on the proposed changes by the end of the year.
Urban planners say such radical changes are needed to allow for the widespread conversion of unused offices into apartments.
In a move to ease both the pressure on New York’s office market and the shortage of new housing, the state recently enacted a measure that gives landlords a 90% tax exemption for converting struggling office buildings into rental apartments, as long as they make 25% of the units “affordable.”
Mark Holliday, CEO of SL Green, which is planning the renovation of 750 Third Avenue, estimates that the so-called 467M program will result in the creation of between 20 million and 40 million square feet of new apartments.
City Planning Commissioner Daniel Garodnick said the proposed rezoning would free up as much as 136 million square feet of office space for residential conversion, more than a quarter of the city’s total office space.
“New York is tackling this challenge citywide, providing relief to struggling office space in each borough and allowing buildings to be converted into new housing in the process — a win-win,” Garodnick told the Post.
It’s up to Adams to make that happen, officials said.
“If he has to make a deal or send pastrami sandwiches in exchange for future favors, he’ll need to convince the council to approve it,” one insider joked.
Making renovations easier might seem like a no-brainer, since it requires no taxpayer expenditures, demolition, or displacement of tenants.
But Adams faces an unyielding City Council that seeks to limit his power by requiring approval for mayoral appointments.
Obstacles to changing the transformation rules can come from both the left and the right.
Some “progressives” support the union’s argument that apartment renovations will result in job losses in areas like the Garment District, and others don’t want to give developers a “benefit” that doesn’t require an “affordable” apartment component.
Opposition also comes from NIMBY-minded city council members who see any change to their neighborhoods, whether in downtown Harlem, Flushing or the suburbs of Queens, as an attack on their constituents’ way of life.
“This will be a defining moment for Adams,” said one political analyst. “He talks about a ‘Yes City,’ but his ‘Take Down the Scaffolding’ campaign has yet to make a dent in the scaffolding issue, and illegal marijuana stores have only increased since he pledged to close them.”
“He really needs to work to make it easier to renovate apartments.”
