City Of Yes Gets $5B Funding Boost, Narrowed Scope In State-Backed Deal

A sweeping change to New York City’s zoning regulations for housing took a major step forward Thursday with the announcement of a last-minute $5B funding deal and two New York City Council committee votes. 

But the version of the proposed zoning amendment, known as City of Yes, is diminished from the proposal brought forward by Mayor Eric Adams' administration. 

The proposed zoning clears the path for 80,000 new housing units across the five boroughs, reduces hurdles for bigger housing projects and office-to-residential conversions and allows for accessory dwelling units in some locations.

The last-minute changes introduced following hours of closed-door negotiations include lowering proposed densities close to some transit stops, keeping parking minimums in certain areas and limiting where ADUs can be built.

The modified City of Yes proposal will now advance to a City Council vote on Dec. 5. The measure is expected to pass by a tight margin.

“Thanks to our shared commitment in building critically-needed housing, we have reached an agreement on a historic plan that could open the doors to a little more housing in every neighborhood in our city — with no borough, block, or backyard left behind,” Mayor Adams said in a statement.

The city government committed $4B and Gov. Kathy Hochul — who hadn't previously been linked to the talks — pledged $1B in state funding, subject to budget approval, they announced in a joint statement Thursday evening. 

“New York has a housing affordability crisis and there's only one way out: build more housing,” Hochul said in a statement.

Most of the $5B will be split into $2B apiece for housing and infrastructure funding, Council Member Kevin Riley said during the Subcommittee on Zoning and Franchises vote. The money will be sent to the neighborhoods most in need of infrastructure enhancements such as sewer enhancements, flood mitigation and green infrastructure. 

The remaining $1B will go toward funding agencies for inspection and enforcement actions, including the city’s Department of Buildings and Department of Housing Preservation and Development, as well as to the Department of City Planning for neighborhood planning processes.

Tenant protections, voucher assistance and combatting source-of-income discrimination will also be funded with the city's contribution, according to the mayor's office. 

The Real Estate Board of New York commended lawmakers on passing the measure and thanked Gov. Hochul for pushing the deal across the finish line.

“The zoning reforms in City of Yes for Housing Opportunity passed by the City Council committees are an important step toward addressing New York City’s housing supply crisis," REBNY President James Whelan said in a statement. "While there is much more work that needs to be done to address the housing supply crisis, today is a good day in the effort to produce much needed mixed-income rental housing.”

The council’s Committee on Land Use and Subcommittee on Zoning and Franchises had been due to vote before noon on Thursday but ended up casting votes early Thursday evening. 

The seven-person zoning subcommittee passed the change in a narrow 4-3 vote, with Council Members Kamillah Hanks, David Carr and Lynn Schulman — who represent districts in Staten Island, Brooklyn and Queens — voting no.

The 11-person land use committee passed the zoning change, with eight votes in favor, Staten Island representatives Hanks and Joe Borelli voting against the measure and Council Member Selvena Brooks-Powers, whose Queens district includes Far Rockaway and parts of Jamaica, abstaining.

“This plan’s production is comparable to 10 Gowanus rezonings,” said Council Member Carlina Rivera, referencing the 2021 changes that cleared the way for 8,000 new apartments in the Brooklyn neighborhood. “It’s about time.”

All corners of the real estate industry, as well as housing advocates, have backed the proposal in recent months, which still includes many of its original proposals, like lifting the floor area ratio cap to allow for larger buildings and easing zoning to make office-to-residential conversions easier.

“The agreement announced today shows that our city government has heard New Yorkers loud and clear: we need to build more homes,” Annemarie Gray, executive director of housing advocacy group Open New York, said in a statement. “If passed, this package will represent a historic step toward addressing New York City's housing needs.”

Some last-minute adjustments resulted in some big changes that will likely reduce the impact from the previously projected 100,000 units.

Over the course of negotiations, city council members landed on a plan to create three zones for parking minimums, leaving the requirements in some areas in the outer boroughs almost untouched, The City first reported. In Williamsburg, Harlem and Astoria, parking requirements would be scrapped, while neighborhoods in the South Bronx and central Brooklyn would see minimums reduced. 

The initial plan to remove requirements for developers to build a certain number of parking spaces alongside housing units caused issues at a City Planning Commission hearing over the summer, with members of the public, city council members and borough presidents testifying against the idea.

Building parking is expensive, and developers argue they could spend the cash on adding more units instead.

“Development is all about math,” Eli Weiss, principal at Joy Construction, said at a Bisnow event in August. “If through zoning changes, through reduction of parking, through height, through any type of change, we can bring costs down — that leads to production.”

The deal also changed where ADUs will be allowed to be built, stipulating that new units can't be in areas prone to coastal and inland flooding or areas that may be affected by sea level rises.

“The administration here is putting the cart before the horse,” said Council Member Kevin Riley, referring to the need to ensure that ADUs are not built in areas that might flood.

The subcommittee also introduced a requirement that ADUs must be part of an existing building — for example, in the attic or basement rather than standalone backyard units — of small properties in neighborhoods with a distinct character, unless the properties are closer to transit. 

The changes water down the intended impact of City of Yes, which is to ensure that all corners of the biggest city in the country contribute to building a way out of its housing shortage, Council Member Crystal Hudson said as she cast her vote.

Hudson, who said her Brooklyn district has added over 1,000 new units since she took office and seen a community-led rezoning add the potential for a further 4,000 units on Atlantic Avenue, said that the measure will mean that other neighborhoods have to step up and do their part to fix the housing crisis.

“We can’t keep relying on the South Bronx or northern and central Brooklyn to build us out of this crisis,” she said. “We need everyone to do their part.”