Policy Pro: NYC takes next step on ULURP reform, C-PACE updates

This story gives you a peek at the content coming to our new platform, TRD Policy Pro. Sign up to get early access here.

Hi there, let’s get into today’s news at the intersection of policy and real estate:

• City planners are rolling out new rules to speed up housing through the Expedited Land Use Review Procedure and the Affordable Housing Appeals Board.
• The city is giving the C-PACE green lending program a boost to reduce borrowing costs and make it more attractive to lenders.
• The Senate majority leader introduced a bill that would allow Yonkers to impose a tax surcharge on vacant or abandoned properties.

In this edition we mention: Department of City Planning Assistant Counsel William Tutt, Adler & Stachenfeld real estate tax attorney YuhTyng Patka, Senate Majority Leader Andrea Stewart Cousins and others.

We Heard

• Fast lane: City planning officials are putting meat on the bones of two voter-approved charter amendments meant to speed housing production: the Expedited Land Use Review Procedure and the Affordable Housing Appeals Board, better known as ELURP and AHAB. The ELURP process simplifies review of land use changes for fairly modest affordable housing and infrastructure projects, requiring a 90-day public review process ending with the City Planning Commission instead of the typical seven-month Uniform Land Use Review Procedure (ULURP) that culminates with the City Council. For projects in medium- and high-density neighborhoods, zoning map changes would qualify if the site is already zoned R6 or higher and the rezoning increases maximum residential floor area by no more than 30 percent. If the existing zoning does not allow commercial or manufacturing uses, any new commercial or industrial component must remain limited, with a maximum commercial or manufacturing FAR of 2. In lower-density neighborhoods, qualifying rezonings would be limited to residential districts zoned R1 through R5. The city will consider a zoning change an increase of residential capacity if a project does any of the following: increases residential bulk, permits housing where it wasn’t previously allowed or eliminates required residential parking. To determine whether a proposal changes the standard maximum building height, the city will use the height limits for “basic” residential buildings that are already defined in the city’s zoning resolution. The city is also making it clearer what projects are eligible for the appeals board process. Under AHAB, a three-member body made up of the mayor, City Council speaker and relevant borough president has the power to reverse certain Council land use decisions relating to affordable housing. The city charter limits the Affordable Housing Appeals Board to developments that “directly facilitate the development of affordable housing.” Under the proposed rules, a project would qualify if it creates housing and meets one of four criteria: it triggers the city’s Mandatory Inclusionary Housing requirements, is already subject to MIH, is an affordable housing project with a government agency serving as the applicant or co-applicant or is legally required to remain affordable through binding restrictions at the time of land use approval. In a presentation to the City Planning Commission, Department of City Planning Assistant Counsel William Tutt said private applications that “merely incentivize affordable housing” — such as those using the city’s universal affordability preference — but aren’t subject to Mandatory Inclusionary Housing or other binding affordability requirements would not qualify as directly facilitating affordable housing, and wouldn’t be eligible for the appeals board. The City Planning Commission will hold a hearing on the proposed rules on Sept. 9.

• Green reboot: A financing program aimed at greening New York City’s buildings is getting another boost after years of sluggish adoption. The Department of Finance has implemented new rules for the Commercial Property Assessed Clean Energy, or C-PACE, program that are intended to lower borrowing costs and make the financing tool more attractive to lenders by bringing it in line with standard market practices. C-PACE offers developers and owners low-rate financing for green building upgrades through a tax assessment. When the city approved its own C-PACE program in 2019, officials expected the city to become a hot spot due to its large, aging building stock. Instead, the program struggled to gain traction, hampered by restrictive rules that limited its appeal. The city finalized guidance in 2024 to loosen some of those restrictions, and now officials are making more tweaks in an effort to bolster activity. Under the new rules, lenders can disburse C-PACE loans in stages as construction progresses, rather than funding the entire loan at closing. Borrowers will pay interest only on the funds that have been drawn, instead of the full loan amount from day one — a boon for lengthy upgrade projects. The rules also eliminate the requirement that disbursed funds be held in an interest-accruing escrow account. YuhTyng Patka, a real estate tax attorney at Adler & Stachenfeld, said the changes make the program more closely resemble a typical construction loan structure. “I see the most recent changes as the C-PACE program maturing,” Patka said. Her firm represented JEMB Realty in securing an $8.5 million loan from North Bridge earlier this year for upgrades to Herald Towers in Midtown, marking the first New York City C-PACE multifamily loan. “It seems like C-PACE is finally gaining some traction in New York City.” While she does not expect the latest revisions to significantly boost borrower demand, Patka said the standardization could make the financing more attractive to lenders. Still, in its current form the program remains difficult for condo buildings to access, and securing consent from existing lenders remains a stubborn hurdle, she added. Meanwhile, Albany is also pushing to expand the program’s reach. In the final days of the legislative session, state lawmakers passed a bill that would broaden the types of projects eligible for C-PACE financing, if Gov. Kathy Hochul signs the bill into law. Sponsored by state Sen. Kevin Parker and Assembly member Steve Stern, the measure would make resiliency upgrades, water improvements and low-carbon building components eligible for the financing.

• Taxing blight: State Senate Majority Leader Andrea Stewart Cousins introduced a bill that would authorize Yonkers to impose a significant tax surcharge on vacant and abandoned properties. The bill, co-sponsored by Assembly member Gary Pretlow, would allow Yonkers to impose a surcharge of up to twice a parcel’s net property tax — the assessed tax after abatements and exemptions. Currently, Yonkers has 167 properties registered with the city’s buildings agency as vacant or abandoned. In the bill memo, the lawmakers state that a vacancy surcharge would help curb public safety risks created by vacant and abandoned properties that attract vandalism and illegal occupancy, “eventually becoming strains on municipal resources.” In January, a four-alarm fire ignited in a vacant home on School Street in Yonkers, spreading to neighboring buildings and decimating an entire block. 

Have a tip or feedback? Reach me at caroline.spivack@therealdeal.com. 

Bill Tracker

The Agenda

The City Planning Commission will meet Wednesday beginning at 10 a.m. to vote on several rezoning proposals. More details on the agenda and how to join here.

The City Council’s housing and finance committees will hold a Wednesday hearing at 1 p.m. on financial tools for maintaining affordability at Mitchell-Lama housing. More details here.

The Catch-Up
New York City investigators and Manhattan prosecutors have launched a criminal probe into what caused columns inside the former Pfizer HQ to buckle, reports The New York Times.

Before last week’s Midtown office-to-resi conversion fiasco thrust MetroLoft into the spotlight, the developer was already grappling with problems at another high-profile conversion project in Tribeca, The Wall Street Journal reported.

The FIFA World Cup brought an uptick in business to New York City hotels but far below expectations. Meanwhile bars have cashed in on the soccer fever that infected much of the city, reports The City Reporter.

The bipartisan 21st Century Road to Housing Act became law early Saturday, despite repeated efforts by President Donald Trump to stall the legislation, NPR reports.

The Kicker
“No landlord pursues ‘negligence’ in their business plan,” wrote Richard Cadena Jr., a project underwriter and Mamdani supporter. 

Read more

Politics

New York

COGE eyes charter revisions to speed city permits, contracts

Politics

New York

Will the housing measures bring projects back from the dead?

Politics

New York

After refusing to take a position, Mamdani supports controversial housing ballot measures