Policy Pro: Outdated code sparks Council clash 

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

• An outdated rule is standing in the way of affordable housing on Eastern Parkway. A City Council bill could clear the way — but a neighboring lawmaker is not a fan.
• The city is eyeing mortgage rate buy-downs as a way to expand homeownership.
• Strict sidewalk shed rules are now in effect.

In this edition we mention: Council member Sandy Nurse, Council member Darlene Mealy, Department of City Planning Brooklyn Office Director Alex Sommer, Department of Housing Preservation and Development Commissioner Dina Levy and others.

We Heard

• Code clash: Brooklyn Council member Sandy Nurse is moving to scrap an outdated city rule along a more than mile stretch of Eastern Parkway that she says is standing in the way of a new affordable housing development in Bushwick. Nurse introduced legislation that would eliminate a code requirement mandating a 30-foot setback for buildings along Eastern Parkway between Ralph and Bushwick avenues. The proposed change is intended to clear the way for Coconut Properties’ 379-unit affordable housing project at 2031 Eastern Parkway. The project is expected to break ground next year. “We want to see the housing get built,” said Nurse during a Tuesday Council committee hearing on the bill. But the stretch of Eastern Parkway affected by the proposed change includes the neighboring district of Council member Darlene Mealy, who raised concerns that the code tweak could drive up her constituents’ property tax bills. “If you give someone 30 extra feet on your property, if you think your taxes will not go up later when it’s reassessed, something is wrong with you,” said Mealy, who is asking that the Bedford-Stuyvesant portion of Eastern Parkway be carved out of the change. The Department of City Planning, meanwhile, supports applying the change across Eastern Parkway. In written testimony, Alex Sommer, director of the Brooklyn office of DCP, called the setback rule “an antiquated part of the code that no longer serves a clear public purpose” and said several buildings along the corridor are already out of compliance. Sommer added that the provision could actually “discourage new development” because lenders are reluctant to back projects that would be technically noncompliant once completed. “This is a straightforward change: it removes a regulatory obstacle that provides no offsetting public benefit today, while opening the door to more affordable housing in Central Brooklyn,” said Sommer.
  
• Smarter subsidy? The city wants to stretch its homeownership dollars further by helping buyers lower their mortgage rates instead of simply writing larger down payment checks. Department of Housing Preservation and Development Commissioner Dina Levy said Wednesday that the agency is exploring upfront subsidies to buy down certain homebuyers’ interest rates, a strategy she said is more cost-efficient than building new homes while helping New Yorkers to build generational wealth. “What that does is allow us to go direct to consumers with a subsidy that is typically less than it costs to build a new unit that gives them the edge to be competitive in the open market,” Levy said during an event hosted by the Center for an Urban Future. The biggest hurdle is scale. Over the past decade, the city’s HomeFirst program — which helps first-time buyers cover down payments or closing costs — has helped roughly 1,100 New Yorkers purchase homes, assisting more than 100 homebuyers each year. Mayor Zohran Mamdani aims to pick up the pace, setting a goal of assisting up to 300 homebuyers each year in his May housing plan. Meanwhile, a bill introduced by Queens Council member Selvena Brooks-Powers would require the city to help at least 600 first-time buyers annually. Buying down mortgage rates, Levy said, is one model the city could use to stretch limited dollars further while reducing borrowers’ monthly payments.

• Shed squeeze: The Department of Buildings adopted tougher sidewalk shed renewal rules, higher fees and new penalties as part of a push to curb the proliferation of long-standing scaffolding. The changes implement part of a package of five City Council bills passed last year that form the basis of the city’s “Get Sheds Down” initiative. At an April hearing, sidewalk shed installers warned that the new rules could create bureaucratic hurdles that slow their businesses. The DOB pushed back in its notice to adopt the requirements as proposed, saying that the concerns regarding filing requirements and the role of registered design professionals indicate a misunderstanding about the changes. DOB said it intends to clarify its rules, which are required by law to implement the Council’s legislation, through outreach. The agency’s final framework spells out some key milestones and consequences for missing them. For initial sidewalk shed permits issued on or after Jan. 12, building owners must adhere to a series of deadlines for façade repairs. They have five months to file complete construction documents, eight months to submit a complete permit application and two years to complete all permitted façade repair work. For the five- and eight-month milestones, the city can grant an extension in 180-day increments to meet the requirements, among several other renewal rules. Buildings that fail to comply will pay up. Fines range from $2,500 for an inadequate renewal progress report to $20,000 for failing to complete required façade repairs on schedule. DOB’s rules spell out several other documentation requirements, along with filings needed for extensions, challenges and waivers. Sidewalk sheds are one of the few building spaces where the Mamdani administration is adding red tape rather than cutting it — a move aimed at pushing owners to take down sheds that have overstayed their welcome.

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

Bill Tracker

The Catch-Up

The Department of Buildings briefly posted a public record saying structural issues at the former Pfizer HQ were caused by a “failure to provide steel reinforcement as per approved plans,” then removed the finding and said its investigation is ongoing, reports Crain’s New York Business.

City Comptroller Mark Levine launched a sweeping audit of nearly $250 million in no-bid migrant shelter contracts awarded by the city to BHRAGS Home Care, a nonprofit whose leaders have been indicted on corruption charges, reports The City Reporter.

Mayor Mamdani appointed the city’s first-ever “public utility advocate,” a role that will be charged with pushing for renewable and affordable energy for New Yorkers, reports Gothamist.

The Kicker
“Affordability is the key to making this complex ecosystem work,” writes Carlina Rivera, president and CEO of New York State Association for Affordable Housing in an op-ed on a city expansion of the Fair Fares program.

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