Housing politics in New York City have shifted, but one vestige remains from the days when race dominated the conversation.
A law passed in 2021 requires “racial equity reports” for any rezoning that would add 50,000 or more square feet of residential space. More than two dozen such applications are now in public review and 59 have completed the process.
To put it bluntly, the law aimed to flag and halt development that would draw white people to a community of color.
Since then, awareness of the city’s housing shortage has grown, and earlier fears of gentrification have lost some ground to calls for more urgent housing production. Racial equity reports continue to be filed as required, but have been largely forgotten.
“I never had a client even ask to see one,” one of the busiest land-use lawyers in the city told The Real Deal, requesting anonymity because of the sensitive nature of the subject.
Two other veteran attorneys who represent developers seeking rezonings said the reports have never come up in their negotiations. “It seems to be an appendage to the process that’s not getting much attention,” one said.
Ian Rasmussen’s firm Urban Cartographics has been among the most prolific producers of racial equity reports, completing 22 last year. When contacted for this story, he said, “I’ve been waiting for a reporter to call me about this.”
“Rezonings are about race”
An unknown number of projects are abandoned before a racial equity report is even done. Developers may realize that what is financially viable will be seen as gentrifying by the local Council member, who can stop a rezoning unilaterally for any reason. Getting a plan before the Council for a vote can take several years and cost well over $1 million, so a defeat during the public review can be disastrous.
That might seem like an unintended consequence, given the push today for more housing, but it was the very intent of the bill, which was introduced in 2019 by Public Advocate Jumaane Williams.
Three years earlier, the de Blasio administration had required affordability in projects benefiting from rezoning. Mayor Bill de Blasio hailed mandatory inclusionary housing as a historic land-use policy, but Williams and others deemed it inadequate.
They wanted a “racial impact study” for every rezoning. Churches United for Fair Housing and New York Communities for Change launched a campaign to pass a city law.
(Local 79 of the Laborers’ International Union was the third member of the coalition, but the provision it wanted, mandating disclosure of construction workers’ wages, was later stripped from the legislation.)
“Rezonings are about race,” the top of the campaign’s website declared in huge letters.
Although the measure was enacted (without de Blasio signing it), the reports it required do not actually forecast the racial impact of a rezoning.
Instead, they present demographic information for the local “public use microdata area.” A PUMA has about 156,000 people. Because it is much larger than the neighborhood where the rezoning would be, equity reports often miss the mark.
Take the 244-unit Arrow Linen project proposed at the border of Windsor Terrace and Park Slope, both largely white, upper-middle-class neighborhoods. The racial equity report ropes in Sunset Park, which is populated by working-class Asians and Latinos. The PUMA it evaluates is 37 percent Hispanic, 36 percent Asian and just 21 percent white.
“If I were tasked with designing how these reports should be written, I don’t know if I’d pick the same methodology,” said Rasmussen. “But I’m doing exactly what they ask.”
He said his reports aim to show how a project would advance the city’s housing goals — a required element — and to generate as few comments as possible from the Department of City Planning. Rasmussen credited the agency with creating a straightforward blueprint for the reports and identifying the data sources needed to compile them.
Urban Cartographics charges $2,000 to $3,000 for a report, but one lawyer said he sees amounts closer to $10,000 in project budgets. Either way, the cost is negligible in the context of the larger rezoning process, which one study found adds more than $60,000 per unit to apartment projects.
Rasmussen said the reports almost always show that the population in the study area has grown more than the housing supply, which bolsters the rationale to rezone.
These factors help explain why the real estate industry did not try to block the bill. The Real Estate Board of New York, in fact, supported its premise on the grounds that decisions should be data-driven, and that improving a community does not displace people.
It’s also true that the optics of opposing racial impact reports would have been bad: The measure was passed in the wake of George Floyd’s murder and the peak of the Black Lives Matter movement.
Ultimately, endorsement might have been the right decision for the industry, given the scant attention now paid to the reports and their failure to forecast racial impacts, as advocates initially wanted.
A spokesperson for the public advocate called the law a success, saying it “has already had a significant impact on land use and development in our city, one which will only become more apparent and critical in the years to come.”
“Requiring a consideration of how development affirmatively furthers fair housing has far-reaching implications not only for the individual proposals, but the way the city approaches zoning as a whole, which we saw clearly in the debate around and ultimate adoption of City of Yes,” the spokesperson added.
But the reports did lengthen the laundry list of paperwork needed to build housing at scale in New York City, noted Judge Glock, director of research and a senior fellow at the Manhattan Institute, a free-market think tank.
“The law added yet another unnecessary roadblock to New York City’s already sclerotic rezoning process,” he said.
This story has been updated with a statement from the public advocate’s office.
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