METROPOLITAN COUNCIL ON HOUSING TENANT/INQUILINO NOVEMBER 2006

Will Lower East Side Rezoning Stop Gentrification?
By Rob Hollander

The Lower East Side/East Village is about to be rezoned. The plan, proposed by the Department of City Planning, is intended to preserve affordable housing and the neighborhood's character-but it also invites luxury development.

Under the neighborhood's current zoning, developers can build huge towers here, way bigger than the old historic tenements, which only rise to about 80 feet in height at most. Not only are these towers transforming the character of the neighborhood and its demographic, but such lucrative development opportunities are an incentive for developers to empty buildings of low-rent tenants and demolish existing housing to build these huge money-making towers. The more such towers are built, the more real-estate values surge as gentrification consumes the neighborhood. Chain stores and chic restaurants and bars follow, pushing out the mom-and-pop stores and all the local services that give the neighborhood its character and residential viability. It's a broad and deep threat to the community. The new zoning plan is designed to prevent this kind of out-of-scale development and keep developers at bay. But the new plan is not without controversy.

The plan represents two principles: community preservation and affordable housing. The preservation part of the plan provides a height cap on new development: an 80-foot maximum through most of the district. That would put an end to the super-tall towers, to the abuse of the community-facility bonus (if you include a space for community use-could be just a doctor's office-you are allowed to build higher) and the purchase of air rights (if a building nearby isn't as tall as it could legally be, you can buy their "air rights" and use their unused space to build your building even higher).

The affordable housing part of the plan provides a radical upzoning of Houston Street, Delancey Street, and Avenue D, with an incentive to build affordable housing. A developer can build a large, dense building (up to a floor-area ratio-FAR, the measure of building size-of 7.2) up to 120 feet high if 20 percent permanently affordable housing is included. The affordable housing doesn't have to be on the site of the development; it can be anywhere in the district and, if the development is at the border of the district, even a half mile outside the district. Alternatively, the developer can renovate existing housing and place it into permanent stabilization-that would also count as creating affordable housing. But if the developer doesn't build or create the 20 percent affordable housing, then they would be allowed to build only up to 5.4 FAR-a much smaller building. So the increased FAR provides an incentive for developers to devote 20 percent of their housing to affordable housing.

Both aspects of the plan raise questions. 80 feet is still much higher than a lot of buildings in the Lower East Side and East Village. There are three- and four-story buildings and lots of five-story tenements. Some people are worried that a landlord might want to empty a five-story tenement of tenants in order to demolish and develop an eight-story condo. And some critics have pointed out that it is harder to build tall buildings north of Houston Street under the current zoning than it would be under the new plan. Under current zoning, the developer must cobble together many lots-tall towers simply can't be built north of Houston on one or two lots. But under the new zoning, a developer can build eight stories as of right-without getting community board or city permission.

Currently, the East Village is zoned for a FAR of 3.44 without the community facility bonus. The new plan would allow a FAR of 4, which basically works out to one extra floor more than 3.44. But suppose you live in a small four-story building with a FAR of 3. Under current 3.44 zoning, it wouldn't pay for a developer to demolish your building just to add half a story. But in the proposed zone that allows a FAR of 4, your building could well become a target for redevelopment.

On the other hand, the new plan eliminates the community-facility bonus, which encouraged major developers to merge many properties wherever they could, buy air rights, and build to the sky. It is these large developments that are prevented by the new plan.

The affordable housing component is controversial for many reasons. In order to get the 20 percent affordable housing, the neighborhood must accept new buildings with 80 percent luxury housing. That radically alters the character of the neighborhood. Gentrification has already brought us nightlife strips which have driven out local services and mom-and-pop stores. Bars can pay higher rents than any other establishment save a bank, and banks and bars turn out to be very popular in chic neighborhoods full of new money. Gentrification also raises real-estate values, which adds to the pressure to evict low-paying tenants.

Under currently available programs, affordable housing is a kind of deal with the devil: Give developers what they want under the condition that they throw the locals some crumbs. But when you play with the devil, it's the devil who usually wins. The neighborhood gentrifies, more tenants are evicted, and more buildings are demolished. The result can be not a gain in affordable housing, but a net loss of affordable housing.

Community Board 3 has demanded of the city that the plan include anti-harassment and anti-demolition measures. But the Department of City Planning has so far refused, and such measures are far from perfect.

What we really need to save our neighborhoods are rent laws that protect affordable housing and a government that is willing to create or subsidize affordable housing directly without relying on developers to do the work that government is supposed to do itself. But we live in an age of triumphal capitalism where downsizing and privatization of government are in vogue and people are afraid to say that the emperor has given all his clothes to the developers.