NYC Officials Urged to Upzone to Solve Affordable Housing Deficit
November 13, 2019
NEW YORK CITY— Across the commercial real estate industry, stakeholders and players are urging New York City Council to consider upzoning neighborhoods that would allow for more development capacity, square footage and taller buildings to alleviate the current affordable housing crisis.
The increased push for upzoning has come amid recent demands from Housing Justice for All, the statewide coalition of tenant groups, who proposed policies for next year’s legislative session that include the “Good Cause” Eviction that would prevent landlords from no-fault evictions and cap rent increases at three percent plus the consumer price index and the nixing of rental increases for major capital improvements.
Many in the development arena view the proposals as counterproductive and a knee jerk reaction to a supply-constrained market that needs more affordable along market-rate development to create an equilibrium.
To do this, industry players are proposing the implementation of upzoning areas of the landlocked city where costs of land and construction are high to allow for taller affordable housing developments that would not only pencil out but service the high demand, Jakub Nowak, associate real estate broker and team lead at Nowak+Partners of Marcus & Millichap tells GlobeSt.com.
“In a supply-constrained market like the one we are in, the only way to create new housing is to build up and create large buildings, and the only way to do that is through upzoning,” he said.
New rent restrictions the New York Legislature implemented in June have driven up rents for free-market units, further creating a gap between the housing type and rent-stabilized units that have low turnover. More and more, the city’s challenges due to the lack of affordable housing will exacerbate and will become harder to solve if there is little land to source and strict air rights restrictions, said Nowak.
“It’s a Catch 22 because there is a growing disparity between rent-stabilized and free-market units, and the restraints on the development of new housing are the only way to solve affordable housing crisis long term,” he said.