City Planning Details City of Yes for Housing Opportunity

The City Council may soon be able to mandate deeper affordability as a condition of rezonings.

The City of Yes for Housing Opportunity text amendment proposes changes to the city’s Mandatory Inclusionary Housing program, which would allow City Planning and the City Council to map an affordable housing option that was previously unavailable on its own.

Namely, the city could require 20 percent of a project’s units to be reserved for those making an average of 40 percent of the area median income, with income bands capped at 130 percent AMI. That would be a standalone option, which is called the “deep affordability option.”

That option is available now as something developers can choose, but it can’t be mandated.

As the law stands, the city can tell a developer that they can choose from option 1 and option 2 — where, respectively, 25 percent of units are set aside for tenants earning an average 50 percent AMI, or 30 percent, at an average of 80 percent AMI — or it can mandate one of those options outright. Officials can add the deep affordability option, or another known as the workforce option, as alternatives, but only if they also offer 1 or 2.

City Council Speaker Adrienne Adams first proposed making this change as part of her housing agenda last year.

“The affordability levels in the new text for the Zoning for Housing Opportunity (ZHO) better reflect the growing need for prioritizing deeper affordability, and I welcome these changes,” Adams said in a statement.

The proposal comes as lawmakers consider replacing the property tax break 421a, which expired in 2022. The affordability levels required under the city’s MIH program were designed to complement the affordability requirements under 421a. It is unclear what those mandates will look like under a replacement tax break, but its compatibility with MIH will be key.

For months, the mayor has revealed major aspects of the text amendment, which aims to update outdated zoning rules and encourage housing construction in low-density districts. Previously announced changes include lifting off-street parking requirements for new housing construction and creating new districts that would allow project sites and neighborhoods to be rezoned to allow higher residential density. The latter change, which would allow residential space with a floor area ratio of 15 or 18, still relies on Albany lifting the limit on residential FAR in the city, which is capped at 12.

The draft text amendment, a nearly 800-page document released by the Department of City Planning on Thursday, includes some new information about the Universal Affordability Preference, a density bump that would be available to developers who add affordable housing to their projects.

The program would replace the city’s voluntary inclusionary housing program, allowing developers to add 20 percent more housing to a project, so long as all of that housing is permanently affordable. “Affordable” in this case means the units are made available to tenants whose earnings average out to 60 percent AMI.

The draft also lays out changes that would expand the number of buildings that can take advantage of exempting certain amenity space from the calculation of their residential floor area, meaning more space could be devoted to housing. Under the change, all multifamily buildings could exempt amenity space from their overall floor area calculations, so long as that space does not exceed 5 percent of the building’s residential floor area.

Other changes in the text amendment include allowing office buildings constructed prior to 1990 to be converted into housing, allowing some accessory dwelling units (legalizing basement apartments requires state action) and making it easier to build housing on large lots with existing buildings, like churches or schools.

The text amendment, however, specifically excludes hotels from expanded conversion rules. Kramer Levin’s Paul Selver questioned this decision, noting that hotels can be good contenders for housing conversions.

The proposal also limits the city’s sliver law and makes it easier to transfer air rights from landmarked properties.

The text amendment is part of Mayor Eric Adams’s strategy to meet a “moonshot” goal of building 500,000 homes in the city over the next 10 years. Reaching that level will require a number of changes at the state level, many of which are being discussed as part of ongoing budget negotiations.