City Council Agrees to City of Yes for Housing Opportunity

The City Council on Thursday agreed to Mayor Eric Adams’ signature housing policy after securing $5 billion in public funding and making changes that will reduce the amount of housing built under the plan.

Instead of generating up to 109,000 units over 15 years, the City of Yes for Housing Opportunity is now expected to add about 80,000 beyond what would otherwise have been built.

The City Council’s zoning subcommittee and land use committee voted in favor of the text amendment after making modifications, most notably preserving parking minimums for new housing construction in some parts of the city. The original proposal had called for eliminating these requirements citywide.

The zoning text amendment will go back to the City Planning Commission for review before it goes to a full City Council vote next month, but those are formalities in light of the agreement reached.

Negotiations dragged on for hours on Thursday, delaying the vote until nearly six hours after the zoning and land-use panels were supposed to convene.

To secure approval, the Adams administration pledged $5 billion for infrastructure and the city’s housing agency. Of that sum, $1 billion will come from the state — a promise secured from Gov. Kathy Hochul just after midnight, according to a source close to the administration.

The commitment includes $2 billion in capital funding for housing, $2 billion for infrastructure and $1 billion for expenses.

The latest version of the text amendment creates three different zones, one in which parking requirements are eliminated, a second where they are partially discontinued and a third where they remain largely intact.

Parking minimums will be eliminated in Manhattan community districts 9, 10 and 11 (areas south of 96th Street were already exempt); districts 1 and 2 in Queens; and districts 1, 2, 3, 4, 6, 7 and 8 in Brooklyn. The city has 59 districts.

The proposal called for more accessory dwelling units but the Council pared it back in the final version, barring ground-floor and basement ADUs in coastal flooding areas and areas vulnerable to flooding inland. The revised version also prohibits backyard ADUs in historic districts and certain areas with single-family homes.

The initial blueprint would have allowed one 800-square-foot ADU on lots with single- and two-family buildings.

The Council added affordability requirements to one measure allowing more housing in commercial districts and to another providing density bonuses to developers who use the extra space for affordable housing.

The details

The elimination of parking requirements and the legalization of ADUs were the most controversial elements of the proposal.

Developers support ending parking mandates, which cut into project budgets and leave less money to build apartments. In the 1980s minimums were waived in much of Manhattan, and in 2016 the city exempted affordable and senior housing near transit. A study by the Regional Plan Association found that the 2016 changes resulted in a 36 percent annual increase in the number of units built.

But some City Council members wanted to keep parking requirements in their districts, believing development without off-street parking would result in drivers circling the block in search of a spot. They were opposed by housing and street-use advocates who said keeping parking minimums would severely dilute the impact of the City of Yes. City planners said developers would voluntarily build parking for projects whose customers wanted it.

The affordability requirements added were for “large” transit-oriented and “town center” developments. The City of Yes would allow three- to five-story apartment buildings near transit and two to four stories of housing above businesses in low-density commercial districts. When such projects have 50 or more housing units, at least 20 percent of housing must be permanently set aside for those earning 80 percent of the area median income.

The Council also shrunk the areas defined by the plan as transit-oriented districts by exempting neighborhoods zoned for single-family homes. Council member Kevin Riley claimed that doing so was in service of preserving a diversity of housing types in the city. Single-family homeowners have been the most vocal opponents of the City of Yes.

The Council also changed rent levels required under the City of Yes’ Universal Affordability Preference for some projects. UAP would provide a 20 percent density bonus to projects if the extra space is dedicated to permanently affordable housing — which developers typically need to qualify for the state’s 485x property tax break.

The initial proposal called for those units to be affordable, on average, to residents earning 60 percent of the area median income. The new version requires deeper affordability for projects where the density bonus exceeds 10,000 square feet: 20 percent of the affordable units must be for households earning 40 percent of the AMI.

Aside from the long delay to the vote, the proposal passed with little fanfare. Before the zoning subcommittee vote, one person stormed into the meeting room and yelled, “We say no to City of Yes. This is bullshit!” before being escorted out.

Staten Island Council member David Carr proposed a motion to reject the text amendment before the subcommittee’s vote, which failed.

“It’s not a no to more housing,” he said. “It’s an opportunity to begin a new conversation on how to address housing the right way.” City of Yes has been in public review for most of this year.

In its original form, City of Yes was projected to add 4,000 to 7,000 new housing units annually through 2039 beyond what would otherwise be built. It is not clear how much the amendments will reduce that projection. Had parking mandates been entirely maintained, the Regional Plan Association found, housing gains from City of Yes would have been cut in half.

Real estate professionals had also warned that requiring too much affordability under UAP would likely result in the program going unused, noting that UAP, as proposed, was already less generous than its predecessor, Voluntary Inclusionary Housing. City Planning Director Dan Garodnick also raised concerns that adding affordability requirements to town center and transit-oriented projects would discourage development.

The text amendment was billed as encouraging “a little more housing in every neighborhood.” Its sweeping proposals to end parking minimums, legalize accessory dwelling units, allow more housing in commercial districts and create the density bonus were cheered by the city’s growing pro-housing movement.

Business interests and organized labor joined in the advocacy effort, as the plan’s champion, Mayor Adams, was busy battling his indictment.

David Rosenberg, an attorney with Rosenberg & Estis, said the changes made by the Council reduced the plan to an incremental approach and will curtail its impact.

“The City of Yes cannot be the City of Maybe Later,” he said. “We cannot possibly get out of this housing crisis if entire communities can simply opt out.”

The amendment also included changes intended to encourage more office-to-residential conversions and to take advantage of a provision in this year’s state budget that lifted the residential floor area ratio cap. City of Yes creates two residential designations that permit construction of residential buildings 15 or 18 times larger than their lot size (an FAR of 15 or 18).

To take advantage of them, however, rezonings are needed. The administration has already indicated that it intends to use the designations in the pending Midtown South rezoning.

Opponents of the amendment predicted it would overwhelm suburban parts of the city with towers and overburden sewers and streets. City Planning countered that the increase in density would be too minor to have a significant impact on local infrastructure.

The administration framed the text amendment as an effort to update outdated zoning rules that have reinforced segregation, enabling affluent communities to avoid adding their fair share of new housing.

The changes to the proposal were not surprising, given concerns raised by City Council members during an all-day hearing last month.

The Council also proposed its own housing plan, dubbed Housing for All, that called for significant capital commitments from City Hall and more affordability requirements as part of City of Yes. Though the plan was not presented as an ultimatum, it became clear that if the mayor did not support it, the City of Yes would not get the 26 Council votes it needed.

Speaker Adrienne Adams indicated last week that the Council was working to incorporate components of Housing for All ahead of its vote on the text amendment. Ultimately, those measures were largely included.