De Blasio Unveils Affordable-Housing Plan

‘Mandatory inclusionary zoning’ is the central principle

Wall Street Journal
By Josh Barbanel, July 31, 2015

During his 2013 mayoral campaign, Bill de Blasio vowed to require developers who benefit from future city zoning changes to include large numbers of affordable apartments in their projects.

Nineteen months later, he has unveiled a plan to make that happen.

On Friday, Mayor de Blasio released details of a proposal for a program of “mandatory inclusionary zoning,” saying it would entail “the strongest affordable-housing requirements in the nation.”

The plan requires that at least one in four apartments in new buildings in rezoned areas be kept affordable for the entire life of a project, city officials said, a stronger requirement than in other cities.

The proposed requirements were designed to match affordable-housing rules that developers must already meet to qualify for a property-tax exemption beginning next year.

The mayor’s proposal won some support from previously skeptical business leaders and a cautious welcome from the real-estate industry.

“We look forward to working with the administration on this important initiative going forward,” said John Banks, president of the Real Estate Board of New York, an industry group. But he added that for the new housing to be built “the numbers need to make sense.”

Carl Weisbrod, chairman of the City Planning Commission, said the plan is “by far the most aggressive and sweeping” of its kind in any city in the country. He said it reflects in part New York’s strong real-estate market, in which developers’ profits on market-rate apartments help them include affordable units in their projects.

“We are committed to economic diversity in our neighborhoods,” Mr. Weisbrod said.

“New York City is using zoning, the most powerful land-use mechanism we have, to advance its vision for a diverse city,” said Jerold S. Kayden, a professor of Urban Planning and Design at Harvard.

An outline of the plan released on Friday showed it would require that between 25% and 30% apartments would have to meet affordability requirements for low- to moderate-income New Yorkers. It would apply whenever a neighborhood—or even an individual lot—is rezoned to increase density or to permit residential development, city officials said.

New buildings with 10 units or less would be exempt.

The plan, a template for all future rezonings, will be submitted to the city Planning Commission in September, city officials said. It then would undergo a formal land-use review process, and be submitted to the City Council.

In a statement, Speaker Melissa Mark-Viverito said she fully supports mandatory inclusionary zoning, and called it “a defining moment in how we grow and develop as a city.”

The city plans to use the new rules to rezone Brooklyn’s East New York neighborhood. In that case, because of the relatively weak housing market, the city plans to provide subsidies to developers so they can afford to build new apartments and charge less to rent them to low-income families in the first two years.

Inclusionary zoning has had a mixed record across the U.S. in encouraging affordable housing: In places where affordable requirements are high and markets weak, little housing gets built.

During the 2013 campaign, Mr. de Blasio drew skepticism with his assertion that mandatory inclusionary zoning in rezoned neighborhoods could generate 50,000 affordable apartments over eight years for poor and middle-class families in New York City.

That turned out to be based on a best-case analysis prepared by an advocacy group, the Association for Neighborhood and Housing Development, for the rezoning of the entire city.

At the time, Kathryn Wylde, the president of the Partnership for New York City, which represents chief executives of 300 large New York City employers, said that a mayor “can’t fight the market” with an inflexible inclusionary zoning plan. “This is an art, not a science,” she said.

After his election, Mr. de Blasio made housing a priority, including a plan to create or restore 200,000 units of affordable housing. But until Friday he hadn’t provided details of the inclusionary portion of his plan.

On Friday, Ms. Wylde said she was briefed on the mayor’s plan and supported it. “This is a pretty flexible and thoughtful approach that would accommodate a range of sites.”

In a position paper, the ANHD was critical of the mayor’s plan, saying it objected to an option allowing developers to meet the requirements by providing apartments to more affluent tenants with incomes up to about $103,000.

The ANHD recently estimated that inclusionary zonings could produce 13,800 units of housing. Mr. Weisbrod said he expected it to produce several thousand units.

The city plan outline didn’t provide any estimate of how many housing units the new plan would produce, but Mr. Weisbrod said it would total at least several thousand.

Write to Josh Barbanel at josh.barbanel@wsj.com