Residents of Bayside, Queens are among the city’s most avid opponents of outsized new homes, partly because they have a lot to lose in their remote corner of the city.
Many blocks of this neighborhood that marks a transition from city to suburb have yards and charming houses that date to the 1920s, and are closer in appearance to areas of Westchester County than to the wide mix of styles and communities in Queens.
It is also home base for activist City Councilman Tony Avella, chairman of the council’s zoning committee, who supports preservation and downzoning, the practice of curtailing the size and scale of new development. Bayside has served as a testing ground for the new R2-A designation, which limits exemptions for garages to 300 square feet, reduces maximum lot coverage to 30 percent, and lowers maximum building heights to 35 feet and has become the template for several other neighborhoods citywide.
Other areas of Bayside have been downzoned from R4 and R5 to R3-2, curtailing the ability of developers to erect multiple-family dwellings on single lots.
But the drive against unbridled development may be contributing to the unintended consequence of declining property values. Though downzoning sailed through in Bayside almost without opposition last year, the going is much tougher in nearby Little Neck, where attendees at a community board meeting earlier this year expressed concerns that similar measures will undercut property values and hurt their ability to make alterations.
Bayside broker John Maniec said that property values in the tony neighborhood are predicted to rise around 3 or 4 percent this year, “but that’s still pretty flat considering that prices rose 15 to 20 percent last year, depending on the area.”
He attributed the slowdown to a general cooling of the hot market, not necessarily to downzoning.
Other factors are also to blame in softening price increases, said local brokers.
“The stabilization of the market is due to increased interest rates, inventory inflation, and a rise in fuel prices,” said Judy Markowitz with RE/MAX Millennium in Bayside. But if downzoning inhibits the ability of people to expand their homes and taxes continue to rise, she said, homeowners will flee the city.
Opinions differ over whether the spread of so-called McMansions, massive structures that have proliferated in the absence of zoning restrictions in recent years, helps or hurts real estate values. Markowitz argues that although an owner of the smallest house on a block will be able to sell for a higher price, when large houses crowd a neighborhood, the quality of life often deteriorates. The area, for example, becomes less desirable as parking gets tighter.
Paul Graziano, an urban planning consultant who helped devise the R2-A designation, said that downzoning reduces market volatility by removing the spikes induced by speculative development. He pointed to a report released last year by the Independent Budget Office, which concluded that property values in historic districts remain high, despite stringent restrictions on exterior alterations.
“In a landmark district, the house is worth more than the property,” he said. “With R2-A, it doesn’t make sense to tear down a good house and build a monster.”
Two to three years ago, he said, Bayside experienced hundreds of teardowns, but almost a year after the downzoning, there are “virtually none and it hasn’t put a damper on the real estate market. Houses are still being sold in two to three weeks.”
Noting a slowdown in sales and valuation in her office, RE/MAX Universal broker Bibi Shariff disagrees. “If people are living in a dinky home,” she said, “they don’t like the McMansions, but when they’re ready to sell, they compare their property to the larger houses nearby, and they use the big homes to boost their price because they sell the potential of their property, not the house.”
Still, said Councilman Avella, “there hasn’t been one instance where values have gone down after downzoning.”
Some owners believe that developers will look less favorably on a small house than they would have before downzoning took effect, but Avella argued that a “fear campaign” undertaken by some brokers and the local chapter of the American Institute of Architects has fanned the flames with misinformation.
“They’re telling people that their houses could have gotten more money if they sold to a developer before downzoning, but builders are going to keep the profit on their own end no matter what the zoning is,” he said.
Shariff disagrees: “R2-A hurts values,” she said. “Builders look to outbid residential buyers, and I know of two instances where builders backed out of buying properties after the new zoning went through and the prices dropped significantly.”
In the last two years, around 40 neighborhoods in the city have been rezoned and many others are considering changes. “When you have out-of-character development going on, people can’t sell their houses,” Avella said. “People should judge the success rate of downzoning by the long list of communities that say they want this, too.”
The goal, he said, is to keep the middleclass from leaving the city. “It’s important to maintain the quality of life in suburban-style areas like Bayside,” Avella said. “If you lose that, people will leave the city and move to Long Island or Westchester. That’s what this is all about; we’re not against development, but it has to fit into the character of the existing neighborhood.”