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Zoning That Works

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Zoning That Works

For New Yorkers, its own reward October 1, 2020
New York City Reborn

It’s hard for anyone involved in New York City land use, zoning, and real estate to believe, but the city once had very permissive residential zoning. Rents were affordable, even in new buildings, and new housing was plentiful. This happy interlude was ended not by war, depression, or natural disaster, but by a political deal, forged by Mayor Robert F. Wagner and City Planning Commission chairman James Felt, and approved by the Board of Estimate—then the final decision maker on zoning—on December 15, 1960. The deal, taking effect a year later and known as the 1961 Zoning Resolution, was the culmination of a multidecade effort to replace the city’s 1916 zoning framework with one ostensibly suitable to the modern age.

Wagner’s deal dramatically reduced the amount of new housing that could be built in the boroughs outside Manhattan, in exchange for development-friendly changes in parts of Manhattan sought by the real-estate industry. The city has been trying for much of the time since to dig itself out of the mess created in 1961. Twice—in the late 1960s and early 1970s, and again during Bill de Blasio’s administration—New York has tried to mobilize political support to spend vast sums of public money to build below-market-rent housing. In between those episodes, an economically strapped city sought to rally support for zoning changes that facilitated private housing investment by matching such changes with further reductions in zoned densities in politically sensitive areas—a reprise of Wagner’s tactic.

Both these approaches have led to housing growth but created their own problems. Planners cared most about the absolute number of new housing units—the city could add jobs only if it could house the great majority of new workers. However, unable to secure public acceptance of the need for a denser city, they felt a necessity to trade more housing for what the public really wanted—less density somewhere else, or more “affordable” housing.

These schemes have reached the end of their usefulness. The city can’t reduce densities indefinitely and simultaneously find locations to grow. The alternative strategy of heavy subsidies was never practical; resources are limited, even in good times. Now, the Covid-19 health emergency has left New York weakened economically, and the city faces other pressing capital needs neglected in recent years. City planners will need to build a consensus for more housing for its own sake—something last tried before the Great Depression.

The 1916 zoning was enacted in an era of reform that included two other key actions: the 1901 New York State Tenement House Act, known as the New Law, and the 1913 Dual Contracts, which greatly enlarged the subway system and spread development throughout the newly consolidated city. The three reforms worked together to disperse the population, then crowded into a small area of the newly consolidated five boroughs, and greatly improve housing conditions for many New Yorkers.

The New Tenement Law, passed in 1901, distinguished between semi-fireproof and fireproof buildings. Semi-fireproof buildings, with brick outer walls and wood joists supporting each floor, were effectively limited to six stories. Early New Law tenements were walk-ups, but by the 1920s, residential elevators had become common and the city’s ubiquitous middle-class housing type for the next 40 years had been established. Taller New Law buildings had to be fireproof, and because of the added expense, were found only in the city’s more affluent parts.

In 1929, the New Tenement Law gave way to the Multiple Dwelling Law, which increased standards for yards and courts but did not change the economic equation favoring the six-story, semi-fireproof apartment building. Foreshadowing the 1961 zoning, buildings with permits under the old law were allowed to be completed, resulting in a burst of construction into the early 1930s. With the onset of the Great Depression and the Second World War, however, relatively few buildings were constructed under the MDL until the late 1940s.

In its first two decades, the Board of Estimate, dominated by then-powerful borough presidents, was responsible for amending the Zoning Resolution. The Board had accommodated rapid development along the new subway lines. Little updating of the zoning had occurred, and the 1936 City Charter, pushed through under the reform-minded La Guardia administration, created the City Planning Commission (CPC) with the idea of drafting a new Zoning Resolution. Zoning had not heretofore “protected” low-density neighborhoods from apartment buildings, but that began to change. The CPC began operations in 1938 and adopted an amendment creating a zoning district limited to single-family detached homes. In 1940, the CPC approved wide-ranging zoning amendments that included additional restrictive-zoning districts, “designed to foster and protect types of development until now inadequately protected in the City of New York, including low density garden apartments, row and group houses,” according to the CPC’s report. Thus, a tension was built into zoning—was its purpose to guide growth and development, or to “protect” what was already there? Who deserved “protection”?

The new restrictive districts, though, were not widely mapped, and on the whole, zoning remained permissive. An additional amendment to the old zoning set the stage for the city’s postwar housing boom. In 1944, the CPC reduced permitted residential building heights and lot coverage (the percentage of a lot that could be covered by a building). The effect, in many cases, was to continue to allow the ubiquitous six-story apartment building but to force it to set back from the street.

The CPC’s report called the changes “interim improvements in standards to prevent further overbuilding such as would otherwise inevitably accompany irresponsible post-war boom construction.” In fact, the combination of the MDL and the 1944 amendments produced a much more livable six-story apartment building, with more light-reaching apartment windows and better ventilation. At the outset of the postwar period, open land remained widely available for building and new housing proliferated throughout the 1950s in response to demand from returning veterans and their families.

After the war, the CPC, now chaired by soon-to-be-Mayor Robert F. Wagner, tried to make good on the promise of a comprehensive revision to the Zoning Resolution that would replace the supposedly antiquated 1916 rules. By the time the city’s consultants, the architecture and planning firm Harrison, Ballard and Allen, produced a proposal in 1950, Wagner had been elected Manhattan borough president and Jerry Finkelstein was CPC Chair. When Mayor William O’Dwyer resigned and was replaced by Vincent Impelliteri, Finkelstein lost his political support, and the proposal stalled. In 1954, Wagner took office as mayor and made comprehensive zoning reform a priority. The city commissioned a second study, by Voorhees, Walker, Smith and Smith; in 1958, that firm submitted a new proposal that with negotiated modifications became the 1961 Zoning Resolution.

The key insight that the 1961 planners thought they had was that the city wasn’t going to grow significantly in the foreseeable future and didn’t need zoning that accommodated big population gains. In his preface to the Voorhees, Walker report, Felt claimed that the old zoning could result in a “nightmare of 55 million residents,” while the proposed zoning would allow a mere 11 million. It’s not clear how these calculations were made, but certainly, the new zoning represented a massive reduction in allowable built densities, particularly in the four boroughs outside Manhattan. Over wide areas, the prototype six-story apartment building would no longer be an option to build. As developer Samuel LeFrak wrote in a New York Times op-ed in 1974: “For many years I built six-story apartment houses in Brooklyn and Queens. They were basic . . . Middle-class New Yorkers could afford to live in them and raise families. The planners didn’t like them so I can’t build them any more.”

The 1961 zoning was a pessimistic vision. The city’s growth engine had expired, and new residential investment was mostly going to the suburbs. To mollify the real-estate industry, zoned densities were increased in a few core areas of Manhattan, generally along major streets on the Upper East and West Sides south of 96th Street. These resulted in a burst of high-rise construction, but average household sizes were small in the new housing. Otherwise, the best that the city could do was spread at low densities into the remaining undeveloped land and preserve existing communities. As Edwin Friedman, a member of the 1961 planning team, stated in an oral history transcript, “future land demand would be determined more by internal shifts of people . . . than by appreciable changes in total population . . . overbuilding in some parts of the City was only at the expense of the sterilization of other parts.”

In pursuit of preservation, the 1961 zoning widely mapped low-density districts that as a practical matter made the construction of apartment buildings impossible due to low floor-area ratios, or FAR—the amount of floor area permitted in a building, expressed as a multiple of the lot area. Even in zoning districts with FARs large enough to permit apartment buildings, typical building lots in the boroughs outside Manhattan could not qualify because of requirements for open space—a new apartment building at the maximum FAR for the zoning district could cover only about 20 percent to 25 percent of the lot, a configuration often called a “tower in a park.” Except in rare cases, this left the responsibility for most apartment construction in the hands of government-sponsored programs that could assemble sites and relocate tenants.

The deleterious effects of the 1961 zoning were shielded at first by overbuilding, and then by economic catastrophe. The overbuilding was set off first by the grace period, in which the effective date of the zoning was delayed for a year and developments with permits could continue construction. This brought a flood of new housing under the old rules, which lasted into the mid-1960s. As the effects of the grace period wore off, the government took over. Multiple city and state agencies were charged with building tens of thousands of new income-restricted housing units under a variety of programs—principally public housing, Section 236 (a federally insured low-interest mortgage), and Mitchell-Lama (in which city and state entities issued tax-exempt bonds to provide low-cost mortgages). It all came crashing down in the 1970s, first as the Nixon administration placed a moratorium on new federal housing commitments in 1973, and then in 1975, as the state Urban Development Corporation defaulted on its debt and the city and state, out of borrowing capacity, ended commitments for new Mitchell-Lama projects. By then, however, the city had experienced massive housing losses. The 1961 framers had been right, at least initially; large amounts of new housing could come only at the expense of existing neighborhoods.

By the late 1970s, housing construction had collapsed but, at that point, it meant little because the city’s economy was prostrate, and the city was losing population. But even then, the seeds of an economic boom were being planted: the deregulation of the financial sector and the advent of the personal computer would lead to rapid growth in service jobs and income. At the same time, the cumulative effects of the nation’s 1965 immigration reform began to be felt in neighborhoods where the old generation of Ellis Island immigrants was passing. Suddenly, in the 1980s, with new jobs and residents, New York was dynamic again. It needed more housing but was saddled with the restrictive 1961 zoning.

Thus began the on-again, off-again efforts of the Department of City Planning to build political support for zoning that would allow more housing. A key achievement was the enactment in 1987 of Quality Housing, an alternative set of massing regulations that once again permitted shorter, squatter apartment buildings, reminiscent of the prototypical pre-1961 development. These new buildings would not be as affordable—to comply with current codes, most new buildings were fully fireproof, built with non-combustible materials that cost more than the old wood joists. Nonetheless, as the economy strengthened in the mid-1990s, housing construction took off. It was further buttressed beginning in the Giuliani administration, and continuing under Michael Bloomberg, with ambitious rezonings that produced lots of new housing in former industrial areas like Long Island City, Greenpoint/Williamsburg, Hudson Yards, and West Chelsea; and in once-declining downtowns in Brooklyn and Lower Manhattan.

To build political support for these ambitious changes, successive mayors did as Wagner had: they traded reductions in achievable density for increases elsewhere. These “downzonings” had the greatest impact on Staten Island, where the remaining vacant land was built out at decreasing densities. It was Staten Island’s misfortune to experience development when the city had little to invest in roads or transit. Squashing growth was an expedient means to deal with inadequate infrastructure, but in doing so the city lost a source of low-cost middle-income housing.

Bill de Blasio tried a different approach as mayor—and repeated the mistakes of the late 1960s. He forswore further density reductions, instead trying to boost housing construction through rezonings tied to a public-spending binge on below-market-rent units. By 2020, de Blasio had to scale back capital spending on housing amid a bleak budget outlook. De Blasio has been criticized for focusing rezonings in low-income areas while being unwilling to take on well-connected opponents of new housing in affluent neighborhoods, where mixed-income housing could be feasible without public subsidies.

Advocates for good zoning that implements “planning relating to the orderly growth, improvement and future development of the city,” to cite the City Planning Commission’s mandate, face issues familiar to advocates of freer markets. Potential supporters are diffuse and may not be aware of the benefits; opponents are focused and understand very well what they stand to lose.

Nonetheless, planners’ task is to organize that diffuse support into a political coalition to let private developers build housing widely—and make a profit while doing so. Negotiating zoning one neighborhood at a time has reached the end of its potential. New York City’s housing problem is citywide; fundamentally, it stems from the city’s adherence to the structure of a zoning plan envisioning a slow-growing city. When the city started to grow much faster, and to adopt a level of public spending that assumed continued fast growth, zoning was upgraded in some areas. That worked for a time. In the decades from 2000 to 2009, and 2010 to 2019—both encompassing complete business cycles in which the city achieved full employment, with new peaks in the numbers of New Yorkers employed—New York granted permits for 231,000 and 207,000 new housing units, respectively. Most of this housing was constructed by private developers without public subsidy (though it often qualifies for as-of-right tax exemptions provided in state law).

Growth was bought dearly, with reductions in density elsewhere; widespread designation of historic districts; commitments to retain large manufacturing-zoned areas, only a few of which have large numbers of jobs; and draconian affordable-housing requirements that can be met in most areas only with deep public subsidies. Procedurally, environmental reviews have become ever-more complex and costly, turning proposals to provide something the public needs—housing—into phantasmagorical analyses of supposed adverse effects. At the same time, the city has been unable to rid itself of indefensible housing-impeding artifacts of 1961—the intricate mathematical formulas that govern “tower-in-a-park” zoning and off-street parking requirements in walkable, transit-served neighborhoods.

New Yorkers should hope dearly that the city returns to growth in the 2020s, and that the next cycle is as good for employment as the last two. If so, the city will need more housing—about 200,000 units just to keep up with labor-force growth, and more to ameliorate the city’s perpetual affordability problems. Private developers will again build most of that housing.

Accommodating those new housing units will require a fundamental rethinking of the city’s land-use regulatory framework. Some New Yorkers will need to sacrifice their demand that nothing changes, in exchange for the long-term benefits of a prosperous city, with affordable and available housing. This is not to say that the city can’t have single- and two-family homes, manufacturing zones, parking lots, or historic districts. But it needs to preserve less of the city and allow many more new apartment buildings.

Change always works better on a citywide basis, where the public can see that the sacrifices demanded are shared, even by those better off. New York could create a citywide housing goal, with allocations among community districts, and propose zoning amendments so that these allotments are realistic and achievable. The New York State legislature could help the state’s economic recovery by making such goals and allotments mandatory, not only within the city, but in the downstate suburban counties as well. In contrast with northern New Jersey, the New York suburbs have failed for decades to produce housing to accommodate their share of regional growth. The legislature also should simplify environmental review for zoning changes to meet citywide housing goals.

Housing expansion should be accepted as a good in itself—not a nuisance to be traded for something valuable, like less growth in another neighborhood or costly affordable-housing subsidies. New York City is enriched, continually, by new residents—immigrants and domestic migrants, who, whether their residence is short- or long-term, contribute to the city’s dynamism and help it evolve. Losing this engine of growth because the city is strangled by restrictive land-use controls leads to stagnation and permanent governmental austerity. Failing to secure a better future for Gotham would be a terrible abdication of responsibility for the next mayor and city council.

Photo by Eduardo Munoz Alvarez/Getty Images

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