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Zoning for Dummies Part III: Impact

by Rob Hollander

Previously in this series:

  • Zoning For Dummies I - So You Want to Understand Contextual Zoning
  • Zoning For Dummies II: What's Affordable Housing?

    Contextual zoning is intended to minimize impact -- it preserves the context. IZ within a contextual zone should therefore be harmless, as long as the contextual zoning features are strictly retained. But the 120-foot-height zoning plan for Houston and Delancey and Avenue D is contextual in name only. The Houston/Delancey/D context is not currently 120 feet high. So the plan contemplates a substantial change on these three streets.

    There's no question that IZ is controversial. Many complain that 20% affordable housing is too little to offset the impact on the community of 80% luxury; others complain that while the luxury units are sure to be built, the affordable units may never get built: developers sometimes don't bother to take the IZ bonus. IZ upzoning, intended to attract affordable housing by allowing larger developments, could turn out to be merely a give-away to developers and an invitation to overdevelopment. And if renovating existing affordable housing counts as building affordable units, it seems like the whole program is, at best, treading water.

    IZ in itself -- without the bonuses -- is a disincentive to development; IZ steals away 20% of the developer's luxury profits. It's the incentive give-aways that accompany IZ that pose a problem to the future of the neighborhood context. The incentives can be an open invitation to developers to transform neighborhoods wholesale. That's what happened to Williamsburg. There were many sites available to develop, especially by the East River; huge towers rose, the demographic shifted and now they are dealing with a lot of "secondary displacement" -- residents and businesses being moved out as a result of a radically shifting neighborhood, rising real estate values, aggressive landlords and encroaching development. The big question for the LES: can Williamsburg happen here?

    Soft Sites

    "Soft sites" is jargon for lots that are available for development. They would include abandoned lots, parking lots and community gardens. But they also might include one-story storefront structures.

    Consider Katz's Deli: very large storefront, nothing built above it, no rent stabilized tenants to evict, no rent control tenants who are nearly impossible to evict and have to be bought out at the price of their choosing; Katz's Deli, a developer's dream site. But, you say, how could we lose Katz's Deli -- it's historic, it's famous, it's unique, it's high quality, everyone loves Katz's?!?

    Well, look around, the Second Avenue Deli is already gone.

    Houston Street east of Second Avenue is full of such single story storefront sites. Take a look at Houston between A&B east of Red Square. A string of one story storefronts.

    That's why this part of the DCP plan has some of us worried. The LES west of the projects is a neighborhood still vulnerable to secondary displacement. And if real estate values rise, the projects themselves will be threatened. The area of the historic LES sandwiched in between 120 foot developments on Delancey and Houston will likely be transformed.

    In comparison with Williamsburg, the LES offers far fewer soft sites, and the height limits in the LES plan are in general more restrictive. But beware: the original Williamsburg plan did not include the huge towers that are destroying their neighborhood and community. That was the city's idea and the City Council approved. It's to prevent such manipulations from above that I'm trying to get you, the public, involved in the process. The CB all alone cannot leverage the dark politics of our City Council, with its pro-development Council Speaker. Only a watchful, informed, vocal public can.

    Avenue D

    The inclusion of Avenue D in the DCP plan raises a red flag. Since the affordable units don't have to be built on-site, it is conceivable that all the luxury units could be stacked on Houston and Delancey and all the affordable units on D, facing the projects. That looks like red-lining -- ghettoizing Avenue D. Whether or not this was DCP's intention -- there's no way of knowing -- it could be the result.

    On the other hand, the city may have a very different intention in zoning D for IZ. This may be their attempt to gentrify the projects' area. But gentrification is a double-edged sword: it brings needed money and safety, but once a neighborhood is identified as monied and safe, the pressure is on to displace the old community with upscale residents. People are willing to pay up the wazoo to live in Manhattan -- developers will look at the projects the way they are looking at Stuy Town now, and government commitment to projects is waning.

    Tenant Protection

    Tenant protections have eroded dramatically over the last five years. Albany is largely responsible. Unfortunately, our soon-to-be governor promises to be no better than the last on this count. Spitzer openly favors eminent domain -- allowing the government to appropriate property for the benefit of private development -- and that's about as pro-development as you can be.

    Today, rent stabilized tenants are easier than ever to evict. The new 2003 rent laws destabilized tenancy with luxury decontrol, the arbitrary revocation of preferential rents and the end of triple damages:

    Preferential Rents

    Suppose you moved into your rental during the Clinton recession of the early 90's. Your rent stabilization ceiling rent -- the legal limit your landlord could charge -- was way above market rate (what anyone would be willing to pay). So he gave you a "preferential rent" -- a mark-down to market-rate, say, $900 for three rooms, although by the stabilization ceiling he could have charged you, say, $1100.

    It used to be that when he renewed your lease he could raise your rent only by the Stabilization Board's increase. Your rent went up maybe 5%. Your ceiling quietly went up 5% too. But that didn't matter because as long as you stayed there he couldn't charge you the ceiling+5%. He could charge only the preferential rent+5%.

    The new rent laws allow him to revoke the preferential rent when you renew. So you might be paying roughly $1500 after ten years of 5% increases or thereabouts, but your ceiling has risen to roughly $1800. Suppose he wants to empty your apartment. He can now raise your rent from $1500 to a new rent based on the $1800 ceiling. Instead of the usual 5% increase over your current rent, he can raise your rent to 5% over the ceiling -- to $1890, a 26% increase. And he can impose this raise just to get you out or just because he doesn't like you: after you leave he can turn around, if he wants, and rent the apartment for the same rent you were paying before you left.

    Luxury Decontrol

    Suppose your rent ceiling was $1200 in 1986. After ten years of 5% increases, your ceiling is now over $2000 and the apartment is now decontrolled. Your landlord can raise your rent to anything he wants. Sky's the limit.

    Triple Damages

    Used to be that if your landlord overcharged you, you could take him to court and win triple damages -- he'd have to pay three times what he owed you in ba ck rent. That's not so anymore. The landlord no longer runs any risk in falsely overcharging tenants. He has nothing to lose by illegally overcharging you.

    Anti-Harassment

    So you see, tenants rights have eroded. To prevent aggressive landlords from evicting tenants unfairly, HPD has implemented an anti-harassment program. If anti-harassment measures are included in the zoning plan, HPD will not issue any construction or demolition permit to a landlord who has a record of harassing tenants on the premises. Harassment includes failing to make repairs, failing to respond to complaints, allowing the property to decline, failing to protect the premises from loiterers and drug dealers. Front doors, for example, that fail to close or lock invite drug trade and can be construed as harassment.

    But revocation of preferential rent or demanding a luxury decontrolled rent way above market rate are not considered forms of harassment, so not all measures of vacating a building are prevented by anti-harassment measures. Also, enforcement of anti-harassment measures is not easy and is not adequately funded. But even if they could be enforced, will frightened tenants report harassment? (I'm one of the only tenants in my building who ever calls 311.) Do all tenants know their rights? (Virtually none in my building does.) The greater the likelihood of a negative answer to these questions, the less effective anti-harassment measures.

    Worse still, emptying a building of tenants has become easy in our neighborhood quite independently of the erosion of tenant rights. Consider my building, an Old Law "dumbbell" tenement from 1889, 6 floors and a basement, 26 apartments altogether, sharing a boiler with an identical sister building next door. 80% of the tenants here are students and recent graduates who moved in on September 1st and will be gone by August 1st. Only the presence of a handful of rent controlled tenants prevents the landlord from emptying the building next September and developing luxury housing here. Rent controlled tenants are extremely difficult to evict.

    (For those of you who resent your rent controlled neighbors for their low rents, consider that they are keeping the wrecking ball away from your home. And, btw, if you think that your rent would go down if their rents went up, think again. The market for rentals is so tight that their rents would rise to market level without lowering your rent at all. The only difference would be that instead of your stable old neighbor -- who will disappear, who knows where -- you'll have a couple of new students across the hall every September and it will be all the easier for the landlord to evict the lot of you. As the old Leadbelly song goes, "We in the same boat, brother.")

    Summary

    We're looking at a lot of potential development on eastern Houston and Delancey in the new plan. There's no sure way to determine what developers will do, but overdevelopment on Houston could adversely impact the LES especially between Houston and Delancey, raising real estate values and residential and commercial rents.

    There is no guarantee that we will see any new affordable housing developed under this plan. Developers may merely renovate existing low income housing; developers may buy IZ bonuses from affordable housing that might have been built anyway under some other subsidy; developers may simply choose not to bother with the IZ FAR bonus.

    Tenant protections are not strong enough to prevent displacement. The only protection from displacement is protection from overdevelopment. A 120 foot height cap on Houston, Delancey and D is an invitation to development. We don't want the affordable housing gained under IZ to be less than the affordable housing lost to primary and secondary displacement brought on by development and gentrification. If the IZ incentives result in a net loss of affordable housing, then there is no justification for the incentives.

    I hope some of you find this useful for understanding current zoning discussions. It was originally published on my blog Save the Lower East Side

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