Beyond Zoning: Meaningful Changes Needed for Affordable Housing
New York City Mayor Eric Adams recently announced his vision to streamline the process for business expansion and adaptive reuse of empty office buildings to affordable housing.
This is a good first step.
The real challenge, however, is not so much the zoning regulations, but more so the time and expense required to develop these properties. These challenges include outdated electrical, plumbing, facade work and environmental issues due to the use of dangerous materials such as asbestos and lead.
To facilitate real change, the vision needs to go beyond the regulatory aspects and look into incentivizing developers to make it economically viable for them to take on an conversion project for affordable housing.
If cities such as New York helped to take some of the economic risk off the table, this would go a long way to accelerate the development of affordable housing and address the empty storefronts and offices. Creating a public-private partnership where the city provides a guaranteed return for the developer is a strong option that has worked in other municipalities to address both affordable housing and the blight that goes along with empty buildings.
For example, if these abandoned properties go into default, the city can purchase at auction for a steep discount, then issue an RFP to developers to develop and convert to affordable housing. While the developers wouldn’t pay the city upfront for the property, the city can recoup their investment via a ground lease.
This plan could go a long way to realizing the outcome of more affordable housing while creating a system that makes it economically viable for all concerned.
