NYC Planning Head Dan Garodnick On 'Very Positive' State Housing Deal, City's Zoning Push

Almost 150 miles north of New York City, state lawmakers are hashing out the details of the conceptual $237B budget agreement Gov. Kathy Hochul announced Monday.

A key part of that budget is a potential housing deal — including a replacement for the 421-a rental housing tax abatement, an incentive for office-to-residential conversions, higher density limits and new tenant protections.

But while Hochul struck a victorious note, New York State Assembly Speaker Carl Heastie warned Tuesday that the housing deal was far from sealed. As of Wednesday evening, no progress has been announced.

The stakes are high. If negotiations fail, this will be the state’s second consecutive year without any measures to alleviate the housing crisis. Over the past two years, NYC has broken multiple records for apartment rents, and vacancy is at its lowest point in nearly 60 years. Since the expiration of 421-a, new housing permits have all but disappeared.  

Bisnow sat down with Dan Garodnick, director of the New York City Department of City Planning and chair of the City Planning Commission, on Wednesday afternoon to talk about progress in Albany, as well as what NYC’s own government can do through Mayor Eric Adams’ City of Yes initiative if the state fails to reach a housing agreement. 

Prior to his appointment by Adams in 2022, Garodnick worked as CEO of the Riverside Park Conservancy and spent three terms as a city council member for the east side of Manhattan, during which he negotiated affordable housing deals for Stuyvesant Town and Peter Cooper Village and oversaw a rezoning plan spanning 78 blocks. He also worked as a litigation associate at Paul, Weiss, Rifkind, Wharton & Garrison before his political career. 

This interview has been lightly edited for length and clarity.

Bisnow: Let’s start with what’s going on in Albany right now. I’m told that senators have been hunkered down in a room all afternoon and could be there all night. What’s the latest you’ve heard?

Garodnick: It seems that they’re hashing out the details of a plan around which there is broad agreement. We’re looking forward to seeing the final outcome.

Bisnow: Any idea what’s going to be in there?

Garodnick: No more than you! I have a sense of the broad brush, but we’re waiting on the details.

Bisnow: The Adams administration has been up in Albany pushing for this housing deal. What’s the latest you’ve heard on negotiations?

Garodnick: We’re really encouraged by the possibility of a tax incentive to help deliver the housing that New Yorkers need, the opportunity to lift the antiquated cap on residential development in New York City, and the incentive associated with office-to-residential conversions. All of those significantly enhance our own housing program in NYC.

Bisnow: We could get a housing deal at any moment, but elected officials said yesterday that there are still a lot of details to be worked out. What’s your assessment of the housing deal that was announced by Gov. Hochul on Monday?

Garodnick: We feel positive about where this appears to be landing. We need movement from Albany on these policies, and it appears we’re getting it, so we’re encouraged. We think based on what was announced publicly that this is a very positive outcome for our ability to create housing in New York City.

Bisnow: The proposed deal has been the subject of a lot of criticisms from developer lobbyists, landlord groups and tenant advocates. They say it won’t produce adequate levels of new housing, won’t help rent-stabilized landlords and will diminish tenant protections. It seems like neither side is happy. Is that a sign that this is a good compromise or that it’s a bad deal?

Garodnick: We'll look to see where it all shakes out, but we are generally encouraged by the fact that Albany is taking action on a key priority for the city, and we look forward to getting into the details.

Bisnow: Some groups have gone as far as to say that no deal whatsoever would be better than the deal that’s currently on the table. What's your reaction when you hear opinions like that, especially considering the state of the city's housing crisis?

Garodnick: We are in a difficult moment for housing in New York City, and one that needs action at all levels of government. It is an important moment for the state to act, and we are encouraged by the fact that they appear to be taking real steps.

Bisnow: You’ve mentioned the proposed 421-a replacement, 485-x, changes to the floor-to-area ratio cap and the incentive for office-to-residential conversions. Which of those do you think would have the most impact on New York City’s housing supply as a singular measure?

Garodnick: I think top of the list here has to be the 421-a successor program, which is a key incentive for the creation of housing in New York City and one that we have been advocating for. New York City has relied on this incentive for many years to deliver housing — and, in particular, affordable housing — in higher-income areas. Without it, we are at risk of stalling out. We are eager to have it back in place.

Bisnow: Have you been surprised by how quickly the development pipeline has fallen off since the expiration of 421-a? 

Garodnick: This is a key tool for housing creation in New York City. The fact that the absence of a program would have a direct impact is not a surprise. It is exactly the reason why we need to bring it back.

Bisnow: You say it’s not a surprise, but state lawmakers chose not to bring it back last year. Do you think lawmakers in Albany are aware of just how dramatically 421-a impacts the development landscape in New York City? 

Garodnick: We're encouraged that it appears that the state legislature and governor are bringing this program back this year. It's an important tool for us in New York City. I think that state legislators understand the dynamic that we are in, and we're really appreciative that it appears they're making big moves for housing this year.

Bisnow: The Real Estate Board of New York has criticized 485-x, the 421-a replacement, saying that it wouldn’t produce anywhere near enough housing units. Do you think that the proposal should be tweaked at all to incentivize more development?

Garodnick: I saw that criticism. I’m not prepared to be able to go into depth because I have not looked at the precise contours yet myself.

Bisnow: Do you think that New York state needs stronger renter protections?

Garodnick: I think it's important to marry strong supply initiatives with tenant protections. I spent much of my career advocating for tenants and tenants’ rights, and I think it's really important for us to have strong tenant protections on the books. This is a new protection that is being enshrined into law. We're encouraged by the fact that the state is taking action here.

Bisnow: The housing crisis has only worsened since Hochul's proposal fell apart last year. How much pressure do you think is on both lawmakers, the governor and also the mayor to ensure a significant deal is passed this time around? 

Garodnick: We have a 1.41% vacancy rate in New York City, which by any account is a housing emergency and our lowest vacancy rate since 1968. The human consequences of housing scarcity are real. The price of rents, displacement, pressures, homelessness and the imbalance of power between landlords and tenants — this is a moment that demands action, and we're encouraged that it appears we are getting it. I think policymakers understand that we are in a critical moment that demands a response.

Bisnow: Rent-stabilized landlords have been among the loudest voices in this debate, and they claim that they are basically at risk of going bankrupt en masse. A lot of them blame the 2019 tenant protection laws. Do you think the program needs some sort of reform? 

Garodnick: It was an important moment for strong protections to be implemented, and I was encouraged by the fact that the state acted in 2019. I also think that they're responding now to concerns that had been raised in the subsequent years about the ability to do apartment renovations. That's part of the job here: to take a look at what you do and to reflect and make changes as necessary.

Bisnow: There are also tenant advocates who say that any changes at all to the 2019 law will undermine renter protections. I’m curious as to your opinion on that.

Garodnick: It is fair for the state to take a hard look at the impacts of prior laws and regulations that they had passed and to consider the consequences, and that's what it looks like they're doing here.

Bisnow: A year ago, we also had talks for a housing deal fall apart pretty close to the finish line. What can the city actually do if there is no deal passed at a state level?

Garodnick: We have our own legislative body and our own dynamic in New York City. We have proposed the largest housing supply initiative in the city's history. It would take a real bite out of our housing crisis and is all within the city's control.

This includes density bonuses and incentives for affordable housing,  reintroducing missing-middle apartment buildings on the margins of low-density areas — either above commercial corridors or near transit — allowing for modest accessory dwelling units in one- and two-family homes, allowing more flexibility for office-to-residential conversion, and eliminating our costly parking mandates, which too frequently are competing with and coming at the expense of housing creation in New York City. It will be referred out to community boards and borough presidents imminently.

Bisnow: What about legalizing basement dwellings?

Garodnick: We cannot do that without the state. All we can do in the context of accessory dwelling units is enable it within zoning, which is what we're doing, to allow for up to 800 SF in a one- or two-family home. We cannot legalize basements. The state would need to do that.

ADUs can be in the basement, but they would have to comply with the state’s multiple dwelling law. ​​But there are many in-basement apartments, which today do not comply with that law. State action would be needed to legalize them.

Bisnow: In the past, we’ve seen community boards voice serious opposition in certain parts of the city to building more housing, as well as to having more housing density. What are the risks of that this time?

Garodnick: We have a real imbalance in New York City on the creation of housing. In 2022, nine community board districts produced as much housing as the other 50 combined. We need to enable a little more housing in every neighborhood of New York City. We believe that we have crafted a proposal that is respectful of neighborhoods.

We're looking forward to this conversation with community boards, borough presidents and council members. We will gladly accept community board recommendations, right up to the point of the vote of the state planning commission. We understand this is a big proposal and one that needs careful consideration. We will be serving as a resource to community boards as they make their way through it. 

Bisnow: How receptive are you to pushback from community boards?

Garodnick: We recognize that some neighborhoods have functionally been completely shut off from housing creation for a long time. We have put forth a proposal that is designed to create a little more housing in every neighborhood while not overly taxing any one neighborhood and while being respectful to existing communities and contexts. We will look forward to having that conversation with community boards and making our case. 

Bisnow: One of the proposals within City of Yes is the Universal Affordability Preference, which would let developers add 20% more housing than otherwise if they set aside all the additional units as affordable housing that average out to 60% AMI. But one criticism of that proposal is that it prioritizes density over deep affordability. 

Garodnick: I actually think that we have landed on a very good spot in lowering AMI levels to a place where we think that they will deliver real affordable housing while also ensuring that we can get the housing built. 

Bisnow: All eyes are on NYC as it implements the nation’s first congestion pricing law. It’s been the subject of backlash from businesses, lawsuits from neighboring states and complaints from New Yorkers. You’ve been a big proponent in the past. What do you believe the impact will be for NYC businesses and for its real estate?

Garodnick: This program is long overdue. Because we're losing $20B a year in economic activity on account of traffic and congestion, it's a moment for us to act. I believe it will be a meaningful step to freeing up our streets to allow for free flow of traffic, mass transit to move, emergency vehicles to get where they need to go — all the while generating needed funds for capital improvements of our existing system. I think that this will be a boost for all New Yorkers who want to see a reliable mass transit system and who are concerned about the economic and human impacts that congestion is having.