LAND RICH, POCKET POOR Making the Most of New York City Housing Authority’s (NYCHA) Unused Development Rights Manhattan Borough President Scott M. Stringer August 2008 About Manhattan Borough President Scott M. 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(NYCHA) controls what is probably the last large-scale stock of publicly owned property in the City. Unused development rights on these properties present a tremendous opportunity to meet the City’s affordable housing crisis, to II. provide revenue to address NYCHA’s critical budget needs – or to pursue some combination Background & History of both goals. The New York City Housing Authority An analysis by the Manhattan Borough (“NYCHA”) was created in 1934, after the New President’s Office indicates that under existing York State Legislature passed the Municipal zoning, Manhattan NYCHA properties have a Housing Authority Act. The Act permitted combined total of 30.5 million square feet of municipalities to form local authorities to unused development rights, which can be develop low-cost housing, financed by the sale developed on site or transferred to adjacent of municipal bonds or by federal funds. In properties as-of-right. 30.5 million square feet 1935, NYCHA completed its first development, is equivalent to more than 35,000 units of aptly named “First Houses,” at Avenue A and housing or more than 11 Empire State Buildings East 3 rd Street. 1 However, the City did not – an asset worth potentially billions of dollars. seriously pursue the large-scale production of public housing until the 1950’s, when the This development potential derives in large part Mayor’s Committee on Slum Clearance, headed from the public actions – “slum clearance,” by Robert Moses, championed high-rise “towers eminent domain, and street demapping – that in the park” as a means to expand the supply of the City took when the developments were quality affordable housing. 2 designed. NYCHA is currently partnering with City agencies and private developers to make Towers-in-the-park apartment buildings are use of unused development rights on three of placed symmetrically within well-landscaped its Manhattan properties, at least partly to raise open spaces. Most NYCHA developments revenue to meet its $195.3 million budget gap. follow this characteristic form. To But NYCHA has yet to publicly articulate any accommodate this design, the City cleared overall long-term strategic plan for its unused blocks entirely or in large portion to create large development rights throughout the City. While contiguous development sites, sometimes it is understandable that NYCHA would utilizing eminent domain to condemn existing consider using its assets to meet budget needs, properties. Often, the City also "demapped" we should not begin disposing of a potentially public streets to combine several city blocks, multibillion-dollar asset in a piecemeal manner creating a “superblock” large enough for the to meet short-term needs without first planned buildings and open space. Developers developing a thoughtful, long-term strategy. and planners argued at the time that additional area was needed for projects to achieve the scale The City, and especially the public housing necessary to create a sufficient return on community, should collectively determine the optimal use of these public assets, and determine how to balance NYCHA’s budget 1 “NYCHA Factsheet,” http://www.nyc.gov/html/nycha/html/about/factsheet.sht needs with the need to create new affordable ml , accessed July 31, 2008. housing. NYCHA should immediately 2 Plunz, Richard, “A History of Housing in New York City,” catalogue its unused development rights Columbia University Press, New York, 1990. p 281. 1 investment while maintaining the integrity of For many years, it was unclear whether the tower-in-the-park design. The result was NYCHA would ever seek to utilize the that most NYCHA developments occupy theoretical development potential on their unusually large lots that are very dissimilar from properties. But recently, it has become clear the general pattern of the surrounding that NYCHA does recognize the development Manhattan street grid. When the City approved potential of its properties under the City’s construction of an individual NYCHA zoning, and plans to access the development development, it conducted public studies similar potential of its property in partnership with to today’s process of environmental review, private developers. examining the effects of the new development on community facilities, mass transit, streets and parking, emergency access, and public utilities, and planning accordingly for public facilities necessary to meet those needs. 3 III. In 1961, after almost all of NYCHA’s planned Current Context communities and other developments had already been designed, New York City NYCHA has run significant budget deficits implemented comprehensive new zoning. City since 2001. However, it was not until the spring planners divided the City into zoning districts, of 2006, when NYCHA released its proposed and assigned each zoning district its own Floor budget and a Plan to Preserve Public Housing Area Ratio (FAR) to regulate the density of (“PPPH”), that the scale of NYCHA’s debt and development in each neighborhood. Under the its urgent need to cut spending and raise 1961 zoning, which still prevails today, the revenue garnered widespread public attention. development potential of a site is determined by In the PPPH, a seven-point plan providing multiplying the size of the lot by the zoning solutions for closing the authority’s then-$168 district’s assigned FAR. If the total million deficit, NYCHA briefly offered options development potential of a site exceeds the for diversifying revenue streams, including amount of development currently occupying the revenue gains from the transfer of unused site, the property owner can either add development rights to developers. additional development to the site, or can sell or transfer the excess development rights to In a June 2006 amendment to its Annual Plan adjacent properties.