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Winter 1993
   
Simple Rules for a Complex Society
Peter D. Salins
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A document of Byzantine complexity, New York’s zoning ordinance has become a major obstacle to the city’s physical renewal. The ordinance has increased the cost of development, discouraged new housing construction, and created vast wastelands of unused space inappropriately zone for manufacturing. Streamlining the regulatory process would improve the city’s physical stock and the quality of life for its citizens.

With New York’s economy stagnant and its citizens eager for changes that might revitalize the city, New York’s leaders should take a hard look at one of the city’s great planning innovations, the local zoning ordinance. A good zoning ordinance promotes the healthy growth and renewal of a municipality’s physical stock—its homes and offices, stores and factories. But New York, the city that invented zoning in 1916, is today burdened with a zoning ordinance—enacted in 1961 and encrusted with thirty years and six hundred pages of amendments—that has become one of the chief impediments to the city’s physical regeneration outside the prime commercial sections of Manhattan.

As with so many other instances of city regulation, New York’s zoning regulation does both too much and too little. On the one hand, it is a document of staggering complexity, one that only lawyers and expediters can understand and interpret; it imposes great burdens on the city’s planning and building department staff, and places enormous obstacles of time and cost in the way of all but the most routine residential development. On the other hand, development that emerges from this regulatory monster is condemned on all sides—by local communities, by environmentalists, and even by the architects and planners. This is true despite the resolution’s detail, attempts at fine-tuning, layers of discretionary review, and community and watchdog group involvement. Moreover, the zoning law’s idiosyncratic rules and procedures have made it possible for other, even more onerous regulations to stifle development further.

Regulation of any sort involves a trade-off: We give up economic efficiency in exchange for quality. New York’s current zoning regime is hugely inefficient, violating the natural order of the city’s land market, distorting property values, and indiscriminately redistributing property rights. But it does all this without making New York a better planned, happier, or more beautiful place.

With an economy battered by recession, the city should have a strong incentive to promote development by streamlining its regulatory system. And the renewal of New York’s physical stock, especially housing, would help improve its citizen’s quality of life.

Zoning Against Harms
Until thirty years ago, zoning in New York worked quite well. The city’s original zoning law, passed in 1916, was designed to prevent three kinds of harm: excessive density, the juxtaposition of incompatible activities, and the most blatant visual offenses. The ordinance placed limits on the height and use of new buildings and set up three different types of zones: residential, commercial, and unrestricted (manufacturing).

The 1916 ordinance embodied two important regulatory principles: “as-of-right” development and “hierarchical” zoning. Under as-of-right zoning, clear, objective criteria told developers what they could and could not build on a given plot of land. Development took place without the need for negotiation or discretionary review by city officials. Hierarchical zoning meant that activities were grouped into categories based on the “external costs” they imposed on their neighbors. Less harmful activities were always allowed in more permissive zones. A factory, for example, would harm the quality of fife in a residential zone, and therefore could not be built there. But a house could be built in a manufacturing zone since it entailed no external costs. Homes, in fact, could be built anywhere in the city.

Zoning districts regulated the permitted uses of land, a building’s allowable “bulk” (height and shape), and its position on the site. A building’s bulk was determined by the width of the street and what was known as the “sky exposure plane”—an imaginary diagonal line that ran from the middle of the street to a point of predetermined height directly above the property line, then continued upward and inward. A building was not permitted to cross the sky exposure plane; thus, the allowable width was smaller on higher floors. This resulted in the architectural form known as the “wedding cake” that characterizes many New York skyscrapers built while the 1916 law was in effect. These buildings become thinner on higher floors, with staircase-like notches marking the progress of the sky exposure plane.

Bulk restrictions, like the segregation of commercial and industrial activity, were justified because they prevented public nuisances that might result from development. Tall, wide buildings would keep fresh air and sunlight from reaching the street, and overdevelopment would worsen traffic congestion. By concentrating on the amelioration of these specific harms, the original zoning resolution achieved its goal of ensuring that the city was developed in an orderly fashion, but it preserved a climate hospitable to development in general.

Zoning for Benefits
The city replaced its original zoning ordinance in 1961. Several factors spurred the approval of an entirely new regime of land-use regulation. Reformers, led by Mayor Robert Wagner, wished to remake the city through comprehensive government planning. They also feared unbridled population growth: The 1916 zoning ordinance placed so few restrictions on residential development that a population of 55 million was theoretically possible.

In addition, the reformers wanted developers to conform to the emerging architectural fashion of the time. Planners were deeply influenced by the Seagram Building, completed in 1958, probably the most celebrated New York skyscraper of the postwar period. Surrounded by an open plaza on Park Avenue, the Seagram Building reflected the “towers in the park” concept pioneered by the French architect Le Corbusier. While long used in the design of humble public housing projects, this concept had not yet been widely implemented in upscale commercial structures, since most private developers built to the property line in order to get the maximum allowable use of the land. Planners, critical of the monotony of Manhattan’s wedding-cake development, instituted incentives in the new zoning ordinance for tall buildings set away from the street in landscaped public plazas.

The new law, then, reflected a basic change in what was expected of zoning. It was no longer enough merely to prevent specific harms to the public; the 1961 ordinance was designed to secure particular benefits. Toward this end, the new zoning resolution departed from the old one in two fundamental ways: It did away with hierarchical zoning and it greatly weakened as-of-right zoning.

Exclusive Zoning
The 1961 zoning ordinance abolished hierarchical zoning, restricting each parcel of land in New York City to a particular range of uses. No longer were manufacturing zones open to all uses, for example; residential and most commercial activities were forbidden except in their own and some multi-purpose zones. This policy has distorted patterns of development and, by limiting housing construction, has contributed to New York’s housing shortage. By 1976 the pace of new housing development had slowed to fewer than ten thousand units each year.

One of the planners’ goals in scrapping hierarchical zoning was to preserve New York’s manufacturing base by reserving large sections of the city for industry. In the years following 1961, however, it became clear that the city was overzoned for factories. Manufacturing employment in the city dropped by 58 percent between 1950 and 1983, and the multistory buildings left vacant by the departure of manufacturing firms did not meet the needs of newer industries, which require large, one-story spaces on open sites. Thus, exclusive zoning helped create vast wastelands of underused industrial space in areas such as SoHo, Red Hook, and Long Island City.

Under hierarchical zoning, these areas would have been revitalized through conversion to residential or commercial use. To some extent this is what happened, despite the zoning law. During the 1960s and 1970s, many property owners in manufacturing districts rented space illegally for residential or office use. The practice was so widespread in lower Manhattan that in 1976 the city legalized the residential use of lofts in SoHo and Tribeca, mandating that their owners bring them into compliance with housing codes.

But rather than open up manufacturing zones to residential development, the city actually tightened its land-use controls, creating a new bureaucracy called the Loft Board and limiting occupancy in most loft apartments to “artists in residence.” The law requires would-be loft-dwellers to prove their credentials and secure an artist’s license from the city’s Department of Cultural Affairs. The city’s zeal to micromanage the use of land led it to create a system resembling a medieval craft guild.

Abandoning As-of-Right
The 1961 ordinance has been continually amended since its adoption, reflecting an impulse to fine-tune urban development by anticipating every possible contingency. From the outset, it was far more complex than the 1916 ordinance, which had provided for only five different types of districts. The new law established ten different residential, eight commercial, and three manufacturing districts, with varying density restrictions creating some 125 different zones and a theoretically infinite range of other possibilities.

The density restrictions were based on a new regulatory device known as the “floor-area ratio,” a measure of the usable floor space within a building divided by the size of the lot on which it is bat. The floor-area ratio effectively supplanted the sky exposure plane as the basis for determining how large a budding could be. The effect of the density restrictions was, in most cases, to reduce the allowable size of a building on a particular lot. But this was offset in part through the use of “alternative zoning options,” which allowed developers to build larger structures if they provided plazas (and, later, other amenities) in exchange.

The stricter density restrictions reflected concerns about overcrowding, traffic congestion, and the like. But the introduction of alternative zoning options reflected the new tendency to use zoning as a tool to extract particular benefits from developers. Ironically, the very patterns promoted by the initial 1961 zoning incentives are now out of architectural fashion. For example, Sixth Avenue in midtown Manhattan, the very epitome of post-1961 development, is now widely regarded as a sterile cavalcade of high-rise boxes. Thus, among the many amendments to the 1961 ordinance are some encouraging a return to 1916-style structures.

In fact, these and countless other amendments have moved the city ever further from the straightforward as-of-right system that prevailed before 1961. To accommodate a variety of unique local conditions, 37 “special districts” have been created, each with its own intricate set of rules. Unhappy with the visual consequences of the original development options, planners added complex “contextual” rules and incentives to ensure that new buildings fit in with older ones. Moreover, zoning restrictions are often more lenient if the developer also builds low-income housing or implements “housing quality” features that reflect current fashions in urban design.

All these changes have moved the city increasingly toward a regime of discretionary review, in which city planners must review and approve the way a developer uses the options and exceptions that have been added to the original code. Much of this discretion is used to grant developers zoning concessions in exchange for specific public amenities: not just plazas and arcades, but expensive benefits such as subway improvements, theaters, and low-cost housing. This “zoning for sale” is a game only a handful of well-funded developers, flanked by costly lobbyists, lawyers, and expediters, can play. The benefits to the city are questionable: There is no economic test of the costs or benefits of such trade-offs, and the practice distorts the price of land by encouraging speculation based on the possibility of negotiating zoning concessions at some later date. Moreover, for the city to make such trades suggests that the supposedly critical goals of zoning are not really important, since they can be waived for a price.

The quest to custom-tailor land-use regulations is an endless one. Even as the zoning ordinance has grown increasingly complex, it can never quite custom-tailor enough, so planners must give themselves discretion to approve or reject particular projects on a case-by-case basis. Zoning, which was meant to foster orderly and predictable development, has instead become a chaotic, capricious process that deters the development and renewal of the city.

The inhibiting effects of the zoning ordinance have been compounded by three other regulatory schemes: the environmental review process, the Unified Land Use Review Process (ULURP), and the landmarks law.

Environmental Review and the ULURP
New York’s current zoning law has proven to be so restrictive that more than half of all new construction in the five boroughs, and almost all in Manhattan, requires some kind of exception to the established as-of-right rules. Under present law, any project that requires such exceptions must go through both environmental review and the Unified Land Use Review Process.

Environmental review is mandated by both state and city laws. Traditionally, the process has been concerned with genuine environmental issues such as air and water pollution. But in recent years, the definition of “environmental impacts” has expanded to include such issues as traffic congestion, urban density, aesthetics, and shadow-casting—precisely the sorts of things that zoning is meant to regulate. Since zoning has lost its focus on controlling these harms, the environmental review process has filled the void.

Unlike pollution, however, these extra-environmental urban impacts cannot be mitigated at the source, for they are primarily the result of the city’s aggregate demographic and economic characteristics. The only way for the city to control urban density, for example, would be to adopt a policy of actively discouraging economic growth. Responsible zoning, on the other hand, merely assures that high-density uses will not be permitted in low-density neighborhoods where they would harm the quality of life.

After the environmental review has been prepared and approved by the City Planning Commission—which can take as long as two years—the developer must then go through the ULURP. This eight-month process begins with hearings by the relevant community boards, which make nonbinding recommendations to the City Council. The proposed zoning changes must then be approved by the City Planning Commission, the City Council, and the mayor.

Interest group challenges are common, during both the environmental review and the ULURP. Political sensitivity invariably colors the ultimate disposition of any proposal by the planners, the mayor, and the Council. No large, economically vital development project can escape running this gauntlet, and countless projects never even make it to the planning stage because developers cannot afford the costs, both in time and money, of this tortuous process.

Landmarks Preservation
The city’s Landmarks Preservation Act was passed in 1965 in response to the demolition of the grand old Penn Station train terminal. It established an 11-member Landmarks Preservation Commission that can designate as a landmark any structure more than thirty years old that has “a special character or special historical or esthetic interest.” The commission also has the power to designate entire areas of the city as historic districts. The City Council can, but rarely does, overrule the decisions of the Landmarks Commission. Between 1965 and 1984, the commission landmarked 690 individual buildings and 44 historic districts containing some 16,000 buildings.

Once a property is declared a landmark, its owner cannot make even minor alterations, such as installing new doors or an air conditioner, without the permission of the Landmarks Preservation Commission. To build on a vacant lot in a historic district, a developer must certify that the architectural character of the district will not be harmed.

To some extent, widespread landmarking has been a response to the architectural damage done by the 1961 zoning code. For example, the provisions of the zoning law that promote open space have upset the architectural character of several neighborhoods by breaking up the straight lines of the avenues and encouraging the development of unusually tall and thin towers that are out of place with their neighbors. The magnificent vistas of Park and Fifth avenues, largely created by the 1916 zoning ordinance, are threatened by the present code. Under current law, the most expedient way to preserve the character of these neighborhoods is to have them declared historic districts.

The Landmarks Commission has gone far beyond its original mandate to preserve historic structures. This was most strikingly illustrated in 1981, when the commission created the Upper East Side Historic District, which encompasses some sixty city blocks containing 1,044 individual buildings in upper Manhattan. The justification for a historic district was flimsy: Most of the area’s historically significant buildings had already been landmarked, and the district did not constitute a homogeneous area of a unique building style. Indeed, in its designation report, the Landmarks Commission noted the eclectic character of the area’s buildings, citing some 45 different architectural styles. The primary effect of the designation—and perhaps its primary purpose—was to bring new housing construction in the area virtually to a halt.

Needed: A New Zoning Law
There is a widespread consensus that New York’s current land-use policy is not working. In 1991, I was among a group of experts, representing a variety of viewpoints, who were asked by the City Planning Commission and the metropolitan chapter of the American Planning Association to submit proposals for reform. I proposed that we scrap the 1961 resolution, including all its subsequent amendments, and start over.

Starting over does not merely mean writing a new zoning resolution. It means not making the same mistakes New York made in the aftermath of adopting its earlier zoning codes. In both 1916 and 1961, the city zoned in response to a particular set of contemporary concerns and according to a few simple concepts. But in the decades following the passage of each ordinance, the city’s planners tried to adjust the zoning resolution to address dozens, even hundreds, of second thoughts, unique situations, and new concerns—concerns that zoning is ultimately unable to satisfy. To develop a new zoning ordinance that avoids this pitfall, we must follow three simple rules.

· First, trust the market. This means, first and foremost, that the primary purpose of zoning should be to prevent development from imposing specific harms, rather than to force the creation of particular benefits. To put it another way, the proper purpose of zoning is to alleviate particular market failures, not to supplant the market as the mechanism for determining the general direction of the city’s development.

The well-understood laws of regional and land economics, when allowed to operate with minimal regulatory restraint, can usually create economically beneficial, consumer-responsive, attractive, and orderly development patterns. The canyons of lower Manhattan, the city’s skyline, and the charming brownstone neighborhoods of Brooklyn are all products of the market, only modestly shaped by zoning. The same is true of humbler but pleasant environments such as the tidy neighborhoods of one- to three-family homes in Queens and the midrise apartment blocks of the Bronx.

Zoning should no longer be used to advance ever-changing urban design fashions, secure public amenities, extract subsidies for housing, or implement a “comprehensive plan.” New Yorkers have often come to regret the “benefits” produced by post-1961 zoning. Plazas, arcades, and other physical improvements have been visually and functionally disappointing. Low-income housing and other social welfare benefits have proven so costly as to outweigh the value of the concessions developers receive in exchange. Thus, most projects that depended on them have been doomed.

And these benefits have not been free to the city. The occupancy of residential and commercial space has been made more expensive for all the city’s households and businesses. Thus, zoning has functioned as a hidden and insidious tax on development and land. But unlike a system of open taxation, its effects are neither readily apparent nor publicly debated.

If zoning once again focused on the prevention of particular urban harms, such considerations could be removed from the environmental review process. In fact, I would go so far as to propose the outright elimination of environmental impact assessments as they apply to particular structures. Instead, the process should evaluate the environmental effects of specific activities (including those of the government) that contribute to measurable environmental degradation.

The mandatory preservation of landmarks, and especially of entire districts, should be eliminated as well, for landmark preservation is a costly benefit that should be outside the domain of land-use regulation. We should maintain the landmark designation process, but the preservation and maintenance of designated sites should be voluntary for private owners. If the city, or a nonprofit group, wishes to preserve a threatened structure, it should pay the for the privilege.

Some critics of New York’s development policies argue that a call for market-oriented land-use policies is misguided, that the problem is precisely that New York’s planners bend too much to market forces. But this is simply not the case. It is true that when market forces are very powerful, as they were in midtown Manhattan during the 1980s, regulators will eventually respond to them. But elsewhere in the city, especially in the outer boroughs, zoning has thwarted the market in a number of important ways. The zoning map has many outdated district boundaries and designations; many commercial districts have unrealistically low density ceilings; industrial areas go to waste as the city’s manufacturing base shrinks; and residential areas artificially restrict dwelling types.

· Second, keep regulations simple, flexible, and predictable. The present zoning law consists of 125 regular district categories, 37 special districts, 20 or so regulatory variables, dozens of formulas and calculations to determine how the rules apply to specific structures and sites, and myriad provisions for negotiation and discretion.

My proposal calls for a radically simplified system, with 18 district categories, no special districts, about a dozen regulatory variables, a few simple calculations, and no exceptions except when approved by the Board of Standards and Appeals or by the courts.

Zoning must, however, be flexible enough to accommodate changes in development patterns. Planners and other public officials cannot be expected to predict future trends in the city’s development, demographics, and infrastructure. The answer is to restore hierarchical zoning. My proposal ranks zones in a hierarchy of nuisance and density, with single-family homes on large lots at the top, and large factories and other noxious uses at the bottom. Under the proposal, one could always place a higher-rank activity in a lower-rank zone.

Thus, high-density commercial and residential activity could immediately move into Manhattan’s restricted manufacturing zones such as the garment district, and much vacant manufacturing land in the outer boroughs could be developed residentially. This might create some messy, short-term juxtapositions of activity or hasten the decline of some established manufacturing complexes. But such effects, if they do materialize, would be a small price to pay to achieve a zoning framework that can accommodate almost any volume or character of future development and rebuilding.

· Third, once we write the rules, leave them alone. Zoning rules should be applied, on an as-of-right basis, with absolute consistency to all development within identical zoning districts. We should return to a regime in which virtually all development (except on city-owned or waterfront property) can take place as-of-right with no discretionary review, except for appeals. Indeed, zoning compliance should be so simple and definite that it can be monitored by clerks in the building department.

This principle has been embodied in the zoning ordinances of countless American cities. Applying it to New York would mean no more special districts, no more site-specific amendments, no more discretionary reviews, and no more site-specific bargaining. It would also obviate the need for the ULURP, which in combination with environmental impact assessments constitutes the most burdensome aspect of New York’s discretionary zoning procedures.

Planners and community advocates can be expected to object that the city’s growing complexity requires more regulatory detail and more discretion, and that what one critic calls “one size fits all” zoning cannot work in New York. But it is precisely the city government’s tendency to micromanage that poses the greatest obstacle to sensible development. If we can write regulations that are open-ended and flexible enough to accommodate change and diversity, we can live with a zoning resolution virtually unamended for perhaps half a century.

Making the Change
It took twenty years to develop the 1916 zoning ordinance, and a decade of discussion before its successor was adopted. Changing the zoning law again is bound to be a contentious and arduous undertaking. Still, there are ways to minimize the obstacles.

To begin with, the process of defining the rules of zoning must be separated from the designation of particular districts. Developing the ordinance itself would likely be far less contentious than deciding the fate of particular areas of the city. Thus, I suggest that the City Planning Department begin working in consultation with its borough offices, the borough presidents, and professional and civic organizations to establish the basic zoning concepts. Once this tool kit of regulatory devices is accepted by all concerned parties and the political process, it would be definitive in determining the nature of zoning districts and the aspects of development to be regulated.

The district mapping itself should be—as it was not in 1916 or 1961—highly decentralized with the greatest possible degree of citizen participation. The primary responsibility for district mapping should rest with the borough presidents, working with their community boards and the borough offices of the Planning Department. Community districts should have a strong voice in the process, if not an outright veto over it, and zoning district boundaries should be coterminous with those of community districts.

I foresee two problems with delegating districting decisions to the boroughs and the community boards. One is that the most prominent and symbolically important parts of Manhattan—the “visitors’ New York”—belong to the entire city. Their fate should not be decided by local residents alone. Therefore, this core of the city—Manhattan below 96th Street, minus the Lower East Side—must be zoned with citywide interests in mind; its district mapping should be turned over to a panel with representatives from all five boroughs.

The other problem is that many local communities reflexively oppose development and would either sabotage the liberal provisions of the new zoning law or attempt to defeat them by mapping too restrictively. To overcome this tendency, borough and community district residents must be given a stake in new development. What better way than to turn over a large share of the property tax base to the boroughs to pay for the delivery of basic municipal services? To decentralize this incentive further, the boroughs could turn over half the revenues generated by new development to the community districts, to be used to supplement or enrich their own service delivery. Thus, we could harness the same economic dynamic that animates zoning decisions in the suburbs, where the impulse to curtail development is offset by the desire to expand the local tax base.

If New York is to remain a vibrant, world-class city, it needs a new zoning ordinance—one that protects the public from harms without unduly constraining development, one that gives local communities both a strong voice and an incentive to permit sensible development, one that does not overreach by attempting to impose particular architectural fashions or social benefits. Zoning in New York should serve, as it does virtually everywhere else in the country, to encourage rather than constrain the natural development and renewal of the city.

 

 

 
Redesigning New York’s Zoning
City Journal Winter 1993.
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