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The New York Times
City Sees Way to Get Mix of Homes on Brooklyn Waterfront

December 27, 2004

Looking to address a critical shortage of housing for low- and moderate-income New Yorkers, city officials are planning to let developers put up larger buildings along the long-neglected north Brooklyn waterfront in return for setting aside up to a quarter of the apartments as lower-cost units.

The concept, called inclusionary zoning, will face a crucial test as part of a plan that seeks to develop up to 10,300 units, most of them in one of the city's few sweeping tracts of underutilized land, two miles of the East River waterfront in Greenpoint and Williamsburg. The coastline is currently dotted with chunks of concrete, hulking factory shells and storage lots, but its stunning views of Manhattan and proximity to trendy residential areas have made it a prized trophy for developers.

Under an enormous rezoning plan, now under public review, more than 350 acres would be turned into a lively mix of light industry, commerce and housing in low and midsize buildings, with tall residential towers, an aquatics center, parks and a landscaped public esplanade overlooking the river.

In recent rezoning efforts, the Bloomberg administration has come under intense pressure to include lower-cost housing in areas where it allows new development, and community groups have accused it of lagging on this front. To spur the construction of such housing, city officials have now embraced the idea of offering developers permission to build more units than would normally be allowed under zoning regulations if they set aside 15 to 25 percent of the housing for people of limited income.

The city has flirted with inclusionary zoning in the past, creating a narrow incentive program in the late 1980's for the highest-density neighborhoods in Manhattan, but officials in the Bloomberg administration dismissed that program as ineffective because it yielded only 600 or so lower-cost apartments. More effective, they say, is a program that offers subsidies to developers of rental apartment complexes that set aside 20 percent of the units for tenants with limited incomes. But because developers have recently been shunning rental projects, that program appears to be yielding diminishing returns.

Now, as housing officials try to meet Mayor Michael R. Bloomberg's goal of creating roughly 13,000 new housing units each year, city officials are promoting inclusionary zoning as a new and potentially powerful tool to ensure that at least some of those units go to low- and moderate-income families. The city has already included a similar incentive program in its rezoning proposal for the Far West Side of Manhattan, which is before the City Council, and is planning to apply the concept to the redevelopment of parts of Chelsea.

But the proposal for north Brooklyn is in some ways the most ambitious, and it could have sweeping consequences.

"It's not like there's been a huge amount of development outside of Manhattan," said Shaun Donovan, commissioner of the city's Department of Housing Preservation and Development. Noting the demand for market-rate housing even in once-depressed areas like the South Bronx and Brownsville, Brooklyn, he said, "It's time for us to look at our policies and think differently. And Greenpoint-Williamsburg is a perfect example."

The Idea Takes Hold

New York is far from alone in using inclusionary zoning programs to increase development of lower-cost housing. Hundreds of cities, including Boston, San Francisco and San Diego, have adopted such programs, and many others, including Los Angeles, are debating their merits. But the city's plan, if realized, would be among the most aggressive in the nation, yielding a higher percentage of apartments whose cost would be permanently lower than market rate, officials say.

Still, some community leaders and housing advocates are skeptical that the plan will succeed because it would be voluntary for developers, and suggest that the city should be going even further.

"It's a good second step in that it recognizes that we need to use the rezoning to guarantee that some of the housing will be affordable," said Brad Lander, the director of the Pratt Institute Center for Community and Environmental Development and a co-author of a study on inclusionary zoning and housing opportunities. "The concern is that it won't do enough of what it's intended to do."

What the overall zoning plan is intended to do is create a new community, practically from whole cloth, on the crumbling edge of the East River while preserving and amplifying the diverse mix of commerce, industry and residences that has made the area increasingly attractive to developers and others, city planning officials said.

"This is an opportunity to reclaim this waterfront for parks, open space and provide badly needed housing, including affordable housing," said Amanda M. Burden, chairwoman of the City Planning Commission, whose staff studied the area for 18 months and worked with community leaders in developing the rezoning proposal.

"It's just amazing - it's been derelict for decades, totally cut off from the community," she continued. She added that the plan would provide public access to a new waterfront promenade, which would be built by the developers constructing the new residences.

Indeed, the proposal, which comes as the city is working to revive its neglected waterfronts, is one in a long line of ideas for revitalizing the former manufacturing hub.

Over the years, property owners have tried to develop everything from housing complexes and big-box stores to waste transfer stations and power plants, but many of those efforts were stymied by economic downturns or community opposition. At one point, city officials even suggested that the pornography displaced from Times Square should relocate to marginal neighborhoods like Greenpoint, said Kenneth K. Fisher, who represented the area in the City Council during the 1990's.

To planners looking at zoning maps, he added, the area appeared perfect for all manner of unpleasant uses because it was zoned for heavy manufacturing, and therefore supposedly devoid of people.

But on the ground, things were very different, with homes and industry coexisting for a century. So even as manufacturing and waterfront activity declined throughout the city, some light industry, like custom furnishings, specialty food production or musical equipment manufacturing, thrived in Williamsburg and Greenpoint. And in the past 15 years, the neighborhoods have enjoyed a residential and commercial renaissance as people were drawn to the area in part for its ethnic mix and its proximity to Manhattan.

As a result, Ms. Burden said, the proposed zoning map is finely drawn, block by block, to fit in with the uses that have already evolved over time. In the inland areas, she said, the plan would "preserve both the scale of the housing and the wonderful mixed use. That's been the tradition of these neighborhoods, and that's why people love it so much, because it has that edgy mix."

The zoning proposal would permanently legalize many of the lofts in old manufacturing buildings that have been claimed as housing, would limit height levels for new construction in low- and mid-rise residential areas, and would preserve manufacturing in some industrial areas on the East River, along Bushwick Inlet and along Newtown Creek. The proposal would also surround low-density residential areas with mixed-use zones allowing for both residences and the kinds of creative industries that have helped rekindle the vitality of the area.

But the most striking changes would occur at the waterfront, with 150- to 350-foot residential towers creating a varied skyline over a promenade interspersed with several new parks, one of them marked for swimming and beach volleyball competitions in the city's Olympic bid. And it is there that the city is planning to use the rezoning in largely new and untested ways: the elaborate low-cost housing program and the requirement that developers create the public esplanade at their own expense.

It is the first time that the city has made building public waterfront access a condition of development on such a large scale, Ms. Burden said. "It imposes a lot of costs on the development, but we think it's absolutely essential," she said. "This is how we can leverage the waterfront."

A Shifting Policy

The inclusionary zoning program represents a departure for this administration. In 2003, when the City Planning Commission rezoned a huge stretch of Fourth Avenue in Park Slope to allow 12-story buildings along a stretch of low-rise structures, Bloomberg administration officials rejected an inclusionary zoning plan, proposed by City Councilman David Yassky and advocates like Mr. Lander, as unworkable and instead reserved $6 million to offer subsidies to developers in exchange for including low-cost units. So far, none of the developers have taken the offer, Mr. Yassky said.

Now, with a different housing commissioner in place, the city is working with elected officials, housing advocates, community leaders and developers to fine-tune its policy, although there is still widespread disagreement over the details.

Under the current proposal for north Brooklyn, developers on the waterfront would be able to build about 18 percent more square footage in exchange for setting aside 15 to 25 percent of the dwellings for people with limited incomes. Depending on the dimensions of the project, that would translate into roughly 8 to 10 extra stories, and potentially hundreds of apartments. Developers would be free to choose from a range of income limits, providing apartments only for low-income residents or for a mix of low- and moderate-income residents.

The program would also give developers a choice in how to meet the affordability requirements, either by building low-cost dwellings within their market-rate complexes, or putting them in different locations. They could opt instead to preserve existing lower-cost housing in the area by buying a building and maintaining the monthly charges. A similar, less ambitious program has been proposed for the inland areas, where there would be lower height limits.

City officials estimate that the rezoning will yield up to 10,300 new apartments overall, with 1,600 to 2,500 being affordable to low- and moderate-income residents. Of those, officials expect 900 to 1,500 to result from the waterfront developments, 500 to 750 from publicly owned sites and 185 from new inland construction.

Forging a New Path

The inclusionary proposal is unusual in several ways. It differs from the city's old program and the one proposed for the Far West Side of Manhattan in that developers who take advantage of it would also be eligible for other subsidy programs. And, in a departure from many other programs across the country, the lower-cost apartments would remain that way permanently.

Steven Spinola, president of the Real Estate Board of New York, said that some of his members have said they would take advantage of the program. Part of its attractiveness, he said, is that the city would allow "double-dipping," meaning developers could take advantage of other subsidies in addition to getting the right to build more apartments.

But some critics say that such "double dipping" will leave less money available for inexpensive housing elsewhere in the city.

They also say that the base height proposed by the city under the new zoning is already so high that the bonus formula does not necessarily guarantee a developer a more attractive package. Imposing a mandatory or more restrictive program might lower the value of the land, these critics contend, but since many of the current property owners paid so little for it, the rezoning, which would automatically increase the value of the land by increasing the size of what could be built on it, would still give them an astronomical profit.

As the proposal - which the community board voted against and which is currently before Borough President Marty Markowitz - goes through the city's elaborate public review process, several of the details may change, city officials said. The City Planning Commission is scheduled to vote on it in March before it goes to the City Council for final approval.

Still, Bloomberg administration officials argue that the structure of the program and the combination of incentives is necessary to accomplish all of the goals for the new community, including the construction of new housing and the esplanade with all of the required infrastructure, in an untested residential property market.

"We've got a big housing shortage in New York, period," said Mr. Donovan, the commissioner of housing preservation and development. "There's been a lot of concern about density, and I understand that," he continued, adding that the new housing policy had helped build support for the rezoning among at least some parts of the community.

"As folks try to plan for and accommodate growth in the city, we need to create more units, and density is a way to get at that," he added. "What we've done, I think, through this policy is to say to the community, 'You want affordable housing, you now have a stake in density, too.' The higher we're able to go to a reasonable level, the more affordable housing you're going to get."

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