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Entrenching an Inequitable Land-Use Process

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Entrenching an Inequitable Land-Use Process

New York’s city council passes legislation that will make it harder for the next mayor to advance a pro-development agenda. June 18, 2021
New York
Politics and law
Economy, finance, and budgets
The Social Order

New York’s city council has largely brought the city’s land-use review process to a halt, opposing useful private-development proposals and publicly initiated rezonings. Mostly term-limited and about to leave office, council members face a dilemma: their successors may not be as reliably hostile to private real estate development as they are, and the next mayor may not be as complacent about the city’s economic and housing growth as Bill de Blasio has been. An economically distressed post-pandemic city with a chronic housing shortage needs an aggressive development agenda, but the council has conceived a measure to prevent the next administration from advancing one.

Zoning changes and other land-use regulatory actions are already subject to vast and costly application requirements, state-mandated environmental reviews, and multiple levels of public hearings. During the mayoralty of Michael Bloomberg, the city nonetheless pushed through an extensive agenda of areawide rezonings. Private applicants—developers with a piece of property and a better idea of how to use it than what the zoning currently permitted—often successfully negotiated the process and invested in the city. Even de Blasio has become a late convert to land-use change, proposing rezonings in Soho and Noho in Manhattan and Gowanus in Brooklyn.

But the city council’s recently passed, two-part legislation—known as Intro 1572-B, “a Local Law to amend the administrative code of the city of New York, in relation to requiring a citywide equitable development data tool and racial equity reports on housing and opportunity”—would hamstring the next mayor. The first part would require the city to create an “equitable development data tool”: an extensive database on demographic, economic, and housing indicators at the citywide, borough, and neighborhood level. Many required indicators don’t exist at smaller levels of geography, so this provision seems to promise more than it can deliver. The data that do exist are already public, but the city will incur an expense to consolidate the data and establish the online data tool.

The second part of the legislation is more problematic. It would require a “racial equity report” for any consequential land-use-change application to the City Planning Commission, whether that change is intended to produce housing or some kind of nonresidential space. Many low-impact applications using the environmental-review “short form” would still need to file a racial equity report.

What would such a report entail? For residential developments, it would list the number of government-regulated affordable units at different income levels, as well as proposed rents or sales prices and the household incomes necessary to afford them. For nonresidential projects, it would list the “projected number of jobs in each sector or occupation, median wage levels of such jobs based on the most recently available quarterly census data on employment and wages or other publicly available data, and the racial and ethnic composition and educational attainment of the workforce for the projected sectors of such jobs.” It’s easy to provide this information for projects with government regulatory agreements; not so for areawide rezonings and private applicants, where many outcomes are possible. By acknowledging the “worst” possible outcomes (market-rate housing! non-union jobs!), the reports will tee up the opposition’s demands.

The poison pill comes when the applicant must describe “how the proposed project relates to the goals and strategies to affirmatively further fair housing and promote equitable access to opportunity.” Back in the day, a privately financed apartment building could just be an apartment building, and an office building or warehouse could just be a place of business. Now, every building must serve a broader set of social goals that the private sector can never meet without public subsidy. In effect, the council gives opponents carte blanche to demand more—more affordability, more union jobs—until the project is either enmeshed in a thicket of government control or as dead as Amazon’s HQ2 or Industry City’s zoning change is today. No one need be against housing or jobs; they just have to be “equitable”—that is, to activists and council members, not to the people taking business risks.

Mayor de Blasio should veto this bad legislation. If he signs it or the council overrides a veto, the state legislature should step in and create a viable land-use process that returns the city to growth and lets the private sector invest in new and repurposed buildings. Failing to reform the broken land-use process means that all private real-estate demand will be focused on existing buildings and whatever new construction the city’s restrictive zoning permits—and the people and businesses with the most money will win the competition for limited built space. That’s exactly the inequity the city council and its activist supporters claim to oppose.

Photo by Noam Galai/Getty Images

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