Pratt Center for Community Development

NYC Campaign for Inclusionary Zoning

Summary of NYC's New Inclusionary Zoning Program
(May 2005)

The NYC Campaign for Inclusionary Zoning is a coalition of over 70 community, labor, religious, and advocacy organizations calling for the use of inclusionary zoning to achieve affordable housing in NYC. The Campaign was launched in the spring of 2004, as it became clear that the Bloomberg Administration was preparing to undertake a range of rezoning and redevelopment actions around New York City that could lead to the development of over 80,000 new units of housing - but that very few of these units were likely to be affordable to low-income and working class New Yorkers.

We launched an aggressive campaign, which included: building a broad citywide coalition, assisting with grassroots organizing and community education in affected neighborhoods, advocacy with elected and appointed officials, a policy report and several policy roundtables, and leadership in a citywide demonstration for affordable housing which mobilized more than 5,000 people at City Hall on February 2^nd, 2005.

In response to these and other efforts, the Bloomberg Administration and the New York City Council reached an agreement to utilize inclusionary zoning to insure affordable housing in its first two large-scale rezonings -- in Hudson Yards (on Manhattan's far west side) and Greenpoint-Williamsburg (on the North Brooklyn waterfront).

While the Campaign is a strong proponent of a citywide mandatory inclusionary zoning program, and these proposals are both area-specific and voluntary/incentive-based, we nonetheless consider them a significant accomplishment. The program includes the following elements:

• Targeted to areas of significant upzoning/density increases
• Voluntary program that combines density increases, tax benefits, and financial incentives for developers who include affordable housing
• Permanently affordable units
• Targeted to a range of incomes
• Prioritizing on-site, but allowing off-site (in same community) options, including the preservation of existing affordable units
• Use of publicly-owned land in rezoning areas to maximize affordable units
• Prevailing wages for building-service workers in larger buildings

Targeted to Areas of Significant Upzoning/Density Increases

The program is not a citywide approach (for which the Campaign is still advocating). Instead, it involves neighborhood-specific rezonings. The Department of City Planning is looking for areas where density can be increased (e.g. near transit, wide commercial avenues, manufacturing-zoned areas that are appropriate for conversion, etc). In some cases, this is combined with limiting out-of-scale developments on row-house or low-density side streets. The City's new IZ approach is targeted to these areas. It has been utilized in two areas thus far:

Neighborhood	Borough	Anticipated Affordable Units	Anticipated Total Units (10 yrs)	Affordable %
Hudson Yards	Manhattan	3,400	13,600	25%
Greenpoint-Williamsburg	Brooklyn	3,500	10,900	33%

Incentive Program that Combines 33% Density Increase, Tax Benefits, and Subsidies:

The program is voluntary. Developers in these areas are not required to include affordable units, and they may build all market-rate developments (despite our advocacy for a mandatory program). Developers who choose to include 20 - 30% affordable units (see income targeting below) receive the following benefits. Based on our financial analysis, we estimate that developers can nearly double their rate of return by opting to include affordable units under the inclusionary zoning program:

• 33% density bonus
• 20 - 25 year property tax exemption (previously available to all developers in the rezoning areas, but now restricted to developers who include affordable housing)
• Ability to use affordable housing subsidy programs (e.g. low-income housing tax credits, NYC HPD and HDC subsidy programs, as well as state and federal program)

Permanently affordable units:

All units developed through the IZ program will be affordable in perpetuity, in order to avoid future expiring use crises.

Targeted to a range of incomes:

Inclusionary developers can choose from the following options:

• 20% of units < 80% AMI
• 10% of units < 80% AMI + 15% < 125% AMI
• 10% of units < 80% AMI + 20% < 175% AMI (Hudson Yards only)

Because most developers will utilize public subsidy programs, we anticipate that a majority of the affordable units will serve households earning less than 60% AMI. In addition, in Greenpoint-Williamsburg the City is targeting units on public sites to a lower income range, with 20% of the 1,300+ units targeted to families earning 20 - 40% AMI, and 40% to those earning 40 - 60% AMI.

Prioritizing on-site, but allowing off-site (in same community) options:

The best deal for developers is to include the affordable units on-site. Options exist to develop or preserve units off-site, within one half-mile of the market-rate development. In addition, the program includes an innovative preservation option, under which developers can preserve existing affordable (but unsubsidized/unprotected) housing as permanently affordable.

Use of publicly-owned land in rezoning areas to maximize affordable units:

In both of these areas, the City dedicated available publicly-owned land for additional affordable housing development, targeted at a lower range of incomes.

Prevailing wages for building-service workers in larger buildings:

In addition to the affordable housing/inclusionary zoning program, the developers in Greenpoint-Williamsburg agreed to pay their building-service workers a prevailing wage, which will boost their wages approximately 30% (into the mid $40,000s) and include health benefits.

Contacts:

This summary was prepared for the Campaign by the Pratt Center for Community Development. The Fall 2004 policy report by the Pratt Center and PolicyLink, calling for the use of IZ in New York City, is available at http://www.picced.org/pol-izreport.php.