Hochul plan for resi towers is tall order

Long-stymied proposal to lift density cap needs more than governor’s support

(iStock/Illustration by Steven Dilakian for The Real Deal)
(iStock/Illustration by Steven Dilakian for The Real Deal)

Sixty years ago, when state lawmakers decided to rein in residential construction, they likely did not foresee a crop of slender towers soaring above Central Park.

But developers found ways to make the most of rules that restricted floor area. Employing advanced technology and neighboring properties’ unused development rights, they stretched residential space to staggering heights on relatively small sites.

Those projects provided wealthy buyers with pieds-à-terre and breathtaking views, but haven’t done much for affordability in the nation’s most expensive housing market.

Now, Gov. Kathy Hochul is seeking to change that age-old law to boost other types of residential construction, including affordable housing and the conversion of office space into apartments.

This month Hochul pitched removing the cap on the city’s residential floor-area ratio, or FAR, as part of her policy agenda.

FAR determines the maximum square footage that can be built on a given site. For example, a developer with a 20,000-square-foot parcel in an area that allows an FAR of 10 can build something 10 times as large as the lot, or 200,000 square feet.

The metric limits bulk more than height, which helps explain the proliferation of skinny supertall condo towers along Billionaires’ Row, some surpassing 1,500 feet.

State law limits residential FAR to 12 in the city. Commercial FAR can be 15, though density can be greater with zoning bonuses and adjacent parcels’ air rights. But the city imposes its own limits. In its highest-density areas, residential FAR maxes out at 10, or 12 if enough affordable housing is included.

Developers have long called for Albany to remove the cap, arguing that it limits construction of much-needed housing in the city. Skinny supertalls are enormously expensive to build. A luxury developer may see enough of a payoff to construct one because the highest units can fetch tens of millions of dollars — and sometimes more. But pencil-thin towers do not necessarily pencil out as mixed-income rentals.

The idea of removing the residential cap has been floated before, including in 2018 by the state Senate. But the explicit backing of a governor at the start of the budget process could give the proposal the boost it needs.

But passage would not change development in the city overnight. City officials would still need to change local zoning, either through a citywide text amendment or by rezoning individual areas.

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Moses Gates, vice president for housing and neighborhood planning at the Regional Plan Association, a group that has advocated for removing the cap, said he is encouraged by the governor’s support. She made the proposal alongside other initiatives to boost housing production more broadly, which could help its chances.

Previous efforts to lift the cap seemed to single out the city’s higher-density areas, sparking opposition. “There was a little bit of a ‘why us?’ issue,” Gates said.

In 2018, RPA identified 149 census tracts where zoning allows a residential FAR of 10 and where raising it past 12 could trigger the city’s Mandatory Inclusionary Housing requirements. The hope is to encourage the construction of affordable housing in areas with great access to mass transit and job opportunities, such as Midtown, Downtown Brooklyn and Long Island City.

City officials began restricting residential density in the 1940s, when they sought to clear out “slums” and planners idealized suburban communities.

Changes to the state’s Multiple Dwellings Law capped residential floor-area ratio at 12 in 1961, and the city’s zoning resolution started using FAR as the primary tool to control housing density that year, according to Jason Barr, author of “Building the Skyline: The Birth and Growth of Manhattan’s Skyscrapers.”

“This restriction is 60 years old. It seems to me to be very outdated,” said Elise Wagner, a partner at Kramer Levin who focuses on land use. “That doesn’t mean the political will will be there for it to happen.”

Critics have warned that developers would sidestep the city’s land use review process and instead apply for higher density through the Board of Standards and Appeals. The Municipal Arts Society testified against the 2018 proposal and a 2016 Senate bill to repeal the residential cap. The group pointed to the BSA path as just one of the “loopholes” that the city needed to close before making such a significant change.

Another worry is unintended consequences, such as occurred when Downtown Brooklyn was rezoned in 2004 to encourage office construction but developers built apartment towers instead. Similarly, lifting the cap on residential projects could trigger housing where the city wants offices.

But Mitch Korbey, a former city planning official who chairs the land use and zoning group at law firm Herrick, is confident that city officials can account for that.

“It is a question of being strategic about where this is permitted,” he said. He added that setback and height restrictions could assuage concerns about out-of-context projects.

Even if Hochul’s plan is approved through the budget process in March, it will take some time for the city to adjust its zoning to take advantage of the change. Based on past zoning fights, that would be controversial.

“Changing land use is always hard,” Gates said. “There’s always a constituency invested in keeping things the way they are.”