One dismal truth about New York City’s housing-supply crisis is that extremely valuable land, near transit and jobs, sits fallow under zoning that prohibits housing construction. Though city planners know that this is a problem, they are stymied by anti-development politics. To overcome these obstacles, they engage in interminable negotiations with local activists who claim to represent the “community” but actually seek to extract the maximum amount of public subsidy from the city in exchange for the minimum amount of neighborhood disruption.

Out of this excruciating process, something occasionally emerges. But plans that can achieve consensus are not necessarily plans that result in housing production. An example is the “Atlantic Avenue Mixed-Use Plan,” recently released by Mayor Eric Adams and City Planning Commission head Dan Garodnick.

The origins of the plan go back to 1961, when New York City was comprehensively rezoned. Back then, city planners looked into their crystal ball and determined that the blocks along Atlantic Avenue in Brooklyn, a major east–west artery, were good places for modern manufacturing in single-story buildings. They zoned the area accordingly. But since it had been developed with a preexisting mix of small industrial, commercial, and residential buildings, assemblage by manufacturers was never going to happen. Hence, the neighborhood stagnated until the revival of the surrounding residential neighborhoods induced the city to begin rezoning for new residential construction.

Rezoning for housing was piecemeal, however, leaving odd juxtapositions. At the corner of Atlantic and Washington Avenues, for example, modern apartment buildings on the north side of the street, rezoned in 2007, face a brightly painted self-storage facility on the south side, still in the legacy manufacturing zone.

The new plan purports to fix all that. Affecting an irregular area to the north and south of a roughly one-mile stretch of Atlantic Avenue between Vanderbilt and Nostrand Avenues, the plan would rezone to an intricate mix of zoning districts. The most generous, along Atlantic Avenue, would rezone to a residential floor area ratio (FAR) of 9.0. (The FAR is the amount of total floor space allowed in a building, relative to the area of the lot. A FAR of 9.0 means that on a 10,000-square-foot lot, 90,000 square feet of multistory housing is permitted.) Such buildings could be up to 185 feet in height. On the side streets off Atlantic, permitted FARs and building heights would be lower.

Allowing for ground-floor and second-story nonresidential space, the plan envisions up to 4,000 new housing units being constructed in the area. A sketch of the redeveloped Atlantic Avenue corridor shows an appealing (at least for planners) streetscape of high-rise apartment buildings. But is that actually possible?

Currently, the area is characterized by high market rents and condominium sale prices. In Clinton Hill (within the 2007 rezoning area), Streeteasy reports that a market-rate, two-bedroom apartment rented in April 2023 for $5,741 a month. In the Washington at 35 Underhill Avenue in Prospect Heights, rezoned to permit housing in 1994, a two-bedroom unit recently sold for $1.66 million.

These numbers reflect the scarcity of housing; demand would easily support new housing construction in the area. If the city simply allowed apartment buildings, the 4,000 units would likely materialize within a few years. Sadly, however, the city doesn’t intend simply to allow apartment buildings. Instead, the rezoned area would be subject to the Mandatory Inclusionary Housing (MIH) Program, which requires buildings larger than ten units to allocate between 20 percent and 30 percent of units to low-income households (the different percentages of required affordable units are based on the targeted income levels). The city projects that of the 4,000 new units, 1,150 to 1,550 will be “affordable.”

This is where the whole enterprise takes on an air of unreality. Units mandated at rents affordable to low-income households can’t pay for their own construction. That burden then falls on the remaining market-rate units. Real estate developers still expect a competitive return on their investment; they won’t subsidize the affordable units unless they’re compensated in some way.

Bill de Blasio’s administration made an imperfect effort to bridge the gap between the take-from-the-rich-and-give-to-the-poor promises of MIH, on one hand, and economic reality, on the other. Specifically, it secured state legislation that deepened the benefits of a property-tax-exemption program, Section 421(a), in exchange for providing affordable housing within new buildings. In neighborhoods with very high rents, the value of Section 421(a)’s 35-year tax exemption on the entire building could offset MIH’s costs. However, the state legislation expired in June 2022, and the legislature’s Democratic supermajorities have not suggested any intention to reinstate it, despite support from Mayor Adams and Governor Kathy Hochul. MIH thus makes the city dependent not only on the cooperation of the legislature but also on the existence of super-elevated market rents.

For a time, the fortuitous melding of high market rents and generous tax benefits in this particular neighborhood made new private, mixed-income MIH housing feasible. For example, a site at 1010 Pacific St., currently under construction, was rezoned to require MIH in 2019 and “grandfathered” under the expiring 421(a) legislation. It would provide 52 of a total 175 units as affordable housing. But in the post–421(a) era, that’s no longer true.

The Atlantic Avenue plan is what my former New York City Planning colleague Howard Slatkin calls Illusionary Zoning: loaded with appealing trappings but unworkable in real-world conditions. Everyone loves affordable housing, and promising lots of it is a path to the vaunted “community consensus.” But Adams and Garodnick are not in office to run up paper victories. Their job is to suggest housing solutions that can work.

At a minimum, the administration needs to suggest a Plan B that allows housing construction even if the legislature fails to reinstate the 421(a) tax exemption. If that breaks the “consensus,” then it’s telling: perhaps the plan all along was to take the city’s money to build the promised 100 percent affordable housing on two city-owned sites and let the rest of the neighborhood continue to stagnate. That’s not a deal the city should accept.

Photo by Gary Hershorn/Getty Images


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