Mandatory Inclusionary Zoning is a centerpiece of the De Blasio Administration’s ambitious affordable housing plan to build 80,000 new affordable housing units and to preserve an additional 120,000 units over the next 10 years. The proposed policy mandates that developers, in exchange for receiving zoning bonuses of up to 20%, will build a proportionate number of affordable housing units. Under the plan, developers building market-rate units must also build affordable units. The endeavor to build more affordable housing dovetails with the goal of economic integration. Inclusionary affordable housing units can be built in three ways: integrated into the same building development, condensed in a building segment on the same site (two adjacent buildings with two entrances, sometimes called “poor doors”), or built on another site within a half-mile of the same community board. Often when developers opt for this third option, they will sell the land to nonprofit affordable housing developers, who then build the units.
A diverse panel of experts convened at the Center for Architecture on 12.15.14 to discuss the potential strength and risks of a Mandatory Inclusionary Zoning Program, processing the outcomes of the Voluntary Inclusionary Zoning Program in place since 1989 and adjusted under Bloomberg. The program was the second of two; the first presentation focused on community concerns in the low-income neighborhood of East New York, while this second panel focused on developers’ concerns in affluent neighborhoods where Mandatory Inclusionary Zoning applies, R10 districts, and a select few others in Manhattan and on the Brooklyn waterfront. One of the major concerns for inclusionary zoning is financing. Building affordable units within a luxury building is costly – $800,000/unit or $400/foot, on average, as reported by Josiah Madar, a research affiliate at the Furman Center. Building units in a segment building or offsite, particularly on less valuable land, can significantly reduce that cost to $200/foot. “At the same time,” said moderator Mark Ginsberg, FAIA, co-chair of the AIANY Planning and Urban Design Committee, “if you created all the units in East New York, you would create a very stratified city without much economic integration; that’s maybe happening to a large degree already.”
The panelists agreed that the city cannot rely on inclusionary zoning alone to solve the problem of affordability or economic integration. Over the last 25 years, inclusionary zoning has resulted in the creation of 4,500 affordable housing units, 75% of which are in Manhattan. According to Gary Handel, AIA, over those 25 years, “the city created 320,000 new housing units, so about 1.5% of the total production is attributable to inclusionary housing.” He added: “That doesn’t mean that the inclusionary housing program doesn’t have some brilliant aspects to it. The idea that, in a relatively high-income, mixed building, you can have people who are earning 80% of the AMI and people who are earning 400 times the AMI seems to be a part of the genius of New York.” Though in rental developments, mixed-income units are not a significant deterrent for market-rate tenants, Ken Fisher warned of the mentality shifts in a condominium building, where low-income neighbors are perceived as threat to the security of a buyer’s investment.
There was a consensus that were Mandatory Inclusionary Zoning to take place, it should be flexible. It should be sensitive to rental versus condominium, onsite versus offsite, the size of a building, and the context of different neighborhoods. In another statistic, culled from the New York Planning Association, Madar noted that “13-20% of all units in the designated areas where buildings were eligible were affordable during that time period.” In other words, a vast majority of the time developers opted not to receive inclusionary zoning bonuses when available. While the high demand of New York real estate might equalize the fiscal setbacks associated with Mandatory Inclusionary Zoning, were the new policy to inhibit the development of market-rate housing, it would be a dangerous outcome for an already overtaxed system. Ethel Sheffer, FAICP, emphasized that density that is building more housing units is the route de Blasio’s administration is taking in tackling the affordability problem experienced by New Yorkers at most income levels, . From there, we must build density in a sensible and sensitive way, attentive to what is being produced and where, as well as to the market economy and the affected communities and districts.
Event: Inclusionary/Integrated Housing (2 of 2): Building Development
Location: Center for Architecture, 12.15.14
Speakers: Ethel Sheffer, FAICP, Principal, Insight Associates, and Member, Community Board 7; Josiah Madar, Research Affiliate, NYU Furman Center for Real Estate and Urban Policy; Gary Handel, AIA, Handel Architects; Ed Wallace, Esq., Greenberg Traurig; Mark Ginsberg, FAIA, LEED AP, Partner, Curtis + Ginsberg Architects (moderator); and Ernie Hutton, FAICP, Assoc. AIA, Principal, Hutton Associates; Co-chair, AIANY Planning and Urban Design Committee (moderator)
Organizers: AIANY Planning and Urban Design Committee; AIANY Housing Committee; AIANY Building Codes Committee; and APA Metro Chapter