Local lawmakers took a major step toward solving New York City’s housing crisis by approving the City of Yes for Housing Opportunity, a citywide rezoning initiative that will add more than 82,000 new apartments over 15 years and invest $5 billion in infrastructure updates and housing.
This measure represents a vital basic understanding that the source of housing is critical to the generation of affordable rentals. Instead of imposing more regulations on landlords, who have limited supply and taken tens of thousands of apartments off the market, the New York City Council voted 31 in favor. 20 of December 5, 2024, to build “a little more housing in each and every one of the neighborhoods. ”»
Mayor Eric Adams introduced the City of Yes initiative after discovering that the project’s expansion had outpaced housing progress in New York City over the past 40 years. It found that municipal and state regulations and policies had limited the production of new housing and were particularly contributing to the apartment shortage. The result? A vacancy rate of 1. 4% and a fierce festival among New Yorkers for a limited number of homes.
As I wrote in a previous Forbes article published in March 2024, the Regional Plan Association predicts that New York City will need 473,000 more housing complexes through 2032 just to meet demand, making new residential progression still most critical for the future of the city.
The Adams administration considers the City of Yes to be the most ambitious update to New York City’s zoning code since 1961 and the largest housing-friendly zoning proposal in the city’s history. As a public policy, it is comprehensive and far-reaching, and affects all spaces in the city.
A summary of how the City of Yes will change the New York City’s longstanding zoning rules is available here. The following are some of the highlights of the new law:
In the last 10+ years, local lawmakers have approved targeted rezonings across the City in areas such as East Harlem, West Harlem, and Gowanus in Brooklyn, but there has never been a comparable citywide pro-housing zoning plan like the City of Yes.
“This is a very important issue for New York City,” said Sean Kelly, Esq. in my recent podcast. ” It’s going to create a lot more opportunities and ease some of the rent burden on tenants. “It’s great to see that we’re moving away from the NIMBY (Not in My Back Yard) mentality and fostering a pro-development sentiment in the market.
Mike Tortorici, Ariel’s founding spouse, added that Yes City is so comprehensive that, as racers, “it’s going to take time to unpack. ” Our job, in terms of comparing homes and analyzing other comparable sales in progress, is going to be more complicated, but fortunately we are well equipped to do it.
At our firm, we know of over 25 of our progression assignments that will be impacted by the rezoning in the City of Yes. For example, a progression that Ariel is marketing in Harlem that featured 105,000 BSF prior to the new law may see a 20% increase in its footprint, and in Brooklyn it may see a 46% increase in FAR (floor area ratio) from 103,000 BSF to 150,000 BSF, while a smaller R6 zone of 10,000 BSF in eastern New York has a potential FAR accumulation of more than 70%.
The City’s Yes approval follows the New York State Legislature’s approval last June of Governor Kathy Hochul’s housing policy as a component of the state’s fiscal year 2025 budget, which aims to create more homes. The National Housing Policy has extended the final touch date for progression sites. reap benefits from the 421a tax relief program from 2026 to 2031; Introduced the 485x tax exemption as a successor to 421A to inspire new residential structure and approved the $467 million tax abatement to inspire office-to-home conversions.
As someone who has argued for years that New York City needs to build more housing and pass fewer regulations, the policy changes on both the City and State level are welcome. Our office is currently preparing 2024 year-end research reports and preliminary data show that the dollar volume of development sales increased by 25% year-over-year, with office to residential conversions accounting for more than one-third of the total volume. These trades can be attributed in part to the State’s new housing policy. Now with the passage of the City of Yes, we expect to see even more robust activity in the development sector in 2025.
A link to a podcast about the City of Yes featuring Shimon Shkury, Michael A. Tortorici and Sean R. Kelly, Esq. is available below.
In this podcast, Shimon Shkury, President and Founder of Ariel Property Advisors, Michael Tortorici, Founding Partner of Array. . [+], and Sean R. Kelly, Esq. Partner, discuss highlights of the City of Yes plan for Recently approved Housing Opportunities.
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