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May 16, 2023

Land Use Issues Addressed at Kramer Levin Seminar

Kramer Levin recently hosted a seminar titled “Emerging Issues in Land Use: The Year in Review and What’s Ahead,” where experts discussed New York City planning initiatives and land use trends. Among the speakers were Jessica Katz, chief housing officer for New York City, Rafael Salamanca Jr., council member for the 17th District and chair of the New York City Council’s Land Use Committee, and representatives from Kramer Levin’s Land Use and Real Estate departments.

The seminar opened with a discussion on the current state of land use and development in New York City. Kramer Levin partner and Land Use Co-Chair Elise Wagner acknowledged the challenges faced by the industry, including the failure of the state legislature to adopt Gov. Hochul’s New York Housing Compact or extend the completion deadline of the now-expired 421 tax abatement. However, the speakers also highlighted some bright spots, such as an engaged mayor and administration supportive of affordable housing and the removal of obstacles to development.

Katz spoke with Valerie G. Campbell about the five pillars that can help address the housing crisis in the city, including saving NYCHA and creating and preserving affordable housing. She also discussed the City of Yes program, which aims to spur residential and commercial development through zoning initiatives. Salamanca spoke with Jim Power and expressed disappointment that the New York Housing Compact was not approved by Albany and stressed the need for private sector involvement in building affordable housing.

The speakers also touched on concerns around the importance of working with the community before certifying a project. Developers need to listen to the community and show them how they will benefit from these projects, according to Salamanca. The Bronx, where Salamanca represents the 17th District, is seeing a lot of projects and proposed zoning changes, including those associated with the four new Metro-North stations.

While there are still significant obstacles, Kramer Levin partner and Land Use Co-Chair Paul D. Selver and other speakers noted that the groundwork has been laid for progress in addressing the citywide crisis around affordable housing and essential services. Kramer Levin’s seminar provided insights on the current state of land use in New York City and what lies ahead.

Statewide Housing Initiatives

Sheila Pozon explained that the goal of the governor’s New York Housing Compact was to build 800,000 new homes statewide over the next 10 years. However, the Housing Compact was dropped entirely from the state housing budget due to complications with local zoning overrides and transit-oriented development requirements. The state legislature introduced two competing bills with the same growth targets that rely solely on incentives to increase housing production and remove tax incentives.

Office-to-Residential Conversions

Eugene C. Travers addressed office-to-residential conversions, which have become a hot topic in New York City due to the pandemic and remote work. The city is facing historic office vacancy rates, and residential conversions have the potential to both revitalize business districts and provide affordable housing. Three factors must align in order to create conversion opportunities: physical conditions of a building, business considerations and the land use regulatory environment.

Zoning for Housing Opportunity

Patrick Sullivan explained that the mayor’s City of Housing Opportunity aims to allow different housing types, facilitate conversions of obsolete buildings to housing, reduce parking requirements, and make it easier for owners of homes and small buildings to alter and update their buildings. Housing types like shared housing and micro-units for single-person households are becoming popular, but there are limitations and hurdles, such as SRO limitations in the New York City Housing Maintenance Code and minimum unit size requirements. However, HPD’s ShareNYC initiative is encouraging shared housing development projects, while the Carmel Place project has shown the existence of a market for smaller units.

The City of Yes

Adam B. Taubman addressed the City of Yes, which is a group of legislative initiatives seeking to facilitate the creation of affordable housing, promote sustainability and support small business through zoning. Dubbed “zoning for a more equitable and sustainable city,” the plan is focused on housing opportunity, carbon neutrality and economic opportunity. The City of Yes was introduced in October 2022, and the first associated text amendment is now out for public review.

Neighborhood Rezonings

Jeff Mulligan reviewed rezoning plans being advanced by the Adams administration around the city, including the Bronx Metro-North Station Area Plan, Atlantic Avenue Mixed-Use Plan, and Midtown South Mixed-Use Study.

Streamlining Government Processes

Toni L. Finger discussed streamlining government processes, which is critical to the Adams administration’s goal of adding 500,000 housing units in the next 10 years and supporting economic development and small businesses. BLAST (Building and Land Use Approvals Streamlining Task Force) was formed in 2022 to streamline the Department of City Planning’s application processes and the city’s environmental review process. Its work culminated in Get Stuff Built, an effort to reduce inefficiencies in the land use process.

Recent Litigation

Jeffrey L. Braun discussed an effort to amend RPAPL (Real Property Actions and Proceedings Law) Section 881 to reduce litigation associated with construction access. He also noted that rezoning initiatives to increase residential development in Gowanus and SoHo-NoHo have prompted litigation.

Distressed Properties

Dan Berman and Jay Godman explained that in the wake of economic disruptions, transactions are still happening in both the distressed and non-distressed worlds, though financing continues to be a challenge and deals are getting more complex. Distressed opportunities will exist for those who are well-capitalized and creative.

Gary R. Tarnoff provided concluding remarks.

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