The Daily Dirt: Housing shortage’s other culprits

Besides zoning, factors include overzealous agencies, arcane processes and understaffing

New York City’s Housing Crisis Has Many Fathers

(Photo Illustration by The Real Deal with Getty)

To solve the housing problem, let developers behave like animals.

Not carnivores, though. Herbivores — the ones that breed until they are overpopulated and can’t sustain themselves. That is a takeaway from the Sun Belt real estate disaster: Investors built so many apartments that rents dropped and they began defaulting on loans.

“If you let developers build, what will they do? They’re going to build, build, build until they overbuild,” brokerage CEO Kyle Matthews said on a recent edition of The Real Deal’s Podcast “Deconstruct.”

New York’s problem is the opposite — underbuilding. It’s not because developers are less aggressive here. Nor is it harder to find investors and lenders. Everyone knows demand in New York is high.

An obvious culprit is archaic zoning. About 70 percent of the city is zoned for low-scale buildings, and in the other 30 percent, developers would build even higher if the city and state let them.

But that’s not the only problem. Several other complicated processes prevent developers from keeping up with demand — or, better yet, exceeding it, which is needed to bring prices down.

Rezonings take years, add a huge expense and don’t always pass. The Citizens Budget Commission calculated that rezoning typically takes 2.5 years and can inflate the cost of an apartment tower by $45 million. Understaffing at the Department of City Planning has been an issue as well.

In a historic district, development is even harder. The Landmarks Preservation Commission person who gets your application might be reasonable but has a good chance of being stubbornly obsessive. It’s the luck of the draw.

One developer told me she had to change the facade of a building to an odd configuration because Landmarks found an old photo of what it used to look like. Not only did that add time and expense, but it made the building susceptible to water damage — which was the reason the facade had been changed in the first place.

The consequences can even be tragic. In 2019 a worker was crushed to death by a crumbling synagogue that Landmarks insisted on saving despite warnings from structural engineers, The City reported.

The agency consists entirely of people dedicated to historic preservation. It is biased by design. Imagine if all criminal court jurors and judges were cops. What chance would any defendant have? That’s how applicants feel at Landmarks.

Other projects go through the Board of Standards and Appeals, which is sometimes easier but still no picnic. As with rezonings, you’ll need a team of lawyers and consultants and deep enough pockets to pay interest on project debt while waiting to get to the starting line.

The BSA typically handles more than 350 zoning variance, special permit and appeals applications every year. It also adjudicates appeals of denials by the FDNY or Department of Buildings.

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Those departments provide yet more friction. The Fire Department takes two or three months to decide if a new or renovated building is safe to open — a delay probably unique to New York City. Controversy erupted last year when it came to light that some projects skipped the line, but the real problem is that the line is so long.

The Department of Buildings has become more efficient, but real estate firms still routinely use expeditors to deal with it. That’s like using a travel agency to book airline tickets.

What we’re thinking about: Besides the BSA, LPC, DCP, DOB, FDNY and Ulurp, what agencies or processes slow down development? Email me at

A thing we’ve learned: Bergen Street, Boerum Place and Lefferts Place are named after slaveholders. So are Sands, Hicks, Suydam and Van Dyke streets, as well as dozens of others in Brooklyn, according to Council member Shahana Hanif. She is exploring ways to rename them “to ensure landmarked spaces in our community honor New Yorkers of note, not those with a slave-owning past.”

Elsewhere in New York…

— The city has not seized a decrepit Bronx building from perennially delinquent landlord David Kornitzer, who owes $25 million in property taxes, because the third-party transfer program has been suspended since 2019. Tenants want the property at 2201-2205 Davidson Ave handed to a responsible party, Gothamist reported, but the transfer program was stopped in response to criticism that it was unfair to small, clueless owners.

— Safe-streets advocates are lobbying to extend and expand the state law allowing red-light cameras in the city, but automating ticket-writing has met resistance in Albany from the outset. Coverage of the issue sometimes notes that opponents view red-light cameras as a cash grab, which is true, but an underlying premise of their opposition is that only cops should be policing drivers. Assembly member David Gantt of Rochester championed this opposition, citing privacy concerns with some exceptions, until his death in 2020.

— Gov. Kathy Hochul acknowledged on “The View” Wednesday that missing the deadline to pass a state budget last year was no accident. “I held the budget up one month late,” she said. “I wanted to be on time — you can brag about being on time. I was not going to be on time because I had more leverage after April 1.” The delay helped Hochul water down the legislature’s bail reform.

Daily Dirt Data

Residential: The priciest sale recorded Thursday was $21 million for a 10,000-square-foot townhome at 8 East 63rd Street in Lenox Hill.

Commercial: The most expensive commercial closing of the day was $14 million for two adjacent properties at 142 West 106th Street and 23 West 106th Street in Manhattan Valley. They total 24,500 square feet.

New to the Market: The priciest residential property to hit the market on Thursday was $14.9 million for a 2,500-square-foot condominium unit at 15 Central Park West, 15K, on the Upper West Side.

Breaking Ground: The largest new building filing of the day was a 52,800-square-foot commercial building in Homecrest, Brooklyn. Permits were filed by Angelo Ng and Anthony Ng Architects. — Matthew Elo