The City of Yes: 5 Numbers Every NYC Landlord Needs to Know 🏙️

Written by R&E's Davis J. Rosenberg.

The City of Yes: 5 Numbers Every NYC Landlord Needs to Know 🏙️

New York City’s City of Yes for Housing Opportunity zoning amendment is a significant shift in addressing the housing crisis. It introduces major reforms to zoning, incentivizes affordable housing, and unlocks opportunities for landlords and developers. However, the initiative is not without challenges—economic and administrative hurdles persist, complicating the road ahead.

This comprehensive breakdown covers the key elements of the City of Yes and what it means for NYC’s real estate landscape.

What We’re Serving Up

The City of Yes is about numbers—and these five capture its core reforms and impact:

1. 🏡 82,000 New Homes: Ambitious but far from the 500,000-unit goal.
2. 💸 $5 Billion Investment: Infrastructure and staffing improvements to support the plan.
3. 🏗️ 1,600 Office Buildings Eligible for Conversions: Major potential to repurpose underutilized spaces.
4. 🚫 Reduced Parking Mandates: Cost-saving changes in key areas.
5. 💡 20% Additional FAR Through UAP: Incentives to build affordable housing.

Let’s break these numbers down further.

The 5 Numbers That Define NYC’s City of Yes

1. 82,000 New Homes: A Step Forward, But Not Enough

The City of Yes aims to create 82,000 homes over the next decade. While substantial, it’s only a fraction of the mayor’s goal of 500,000 new units. The reforms address post-WWII zoning mistakes that contributed to the housing crisis:

• Parking Mandates: Eliminated in transit-rich areas, reducing costs and freeing up space.
• Multifamily Zoning in Low-Density Areas: New provisions allow multifamily developments near transit hubs, though with geographic and affordability restrictions.
• Accessory Dwelling Units (ADUs): Permitted up to 800 sq. ft. in one- and two-family zones, though restricted in historic districts and flood zones.

The Limitations:
While promising, these changes are hindered by economic barriers like high construction costs, interest rates, and tariffs. For projects on the margins, these factors can still make development financially unfeasible.

2. $5 Billion Investment: Supporting Housing Growth

The initiative includes $5 billion in funding to improve housing infrastructure and support city agencies like the Department of Housing Preservation and Development (HPD). This funding is crucial for:

• Adding staffing to reduce administrative delays.
• Streamlining processes for tax incentive programs like 485x and 467m.

The Challenge:
As of now, the guidelines for key tax programs haven’t been finalized, adding significant delays to projects relying on these incentives.

3. Office-to-Residential Conversions: Unlocking Potential

Buildings constructed as late as 1990 are now eligible for residential conversions, expanding the previous pre-1977 cutoff. This change could unlock housing potential in NYC’s underutilized office spaces.

• 1,600 office buildings in NYC represent conversion opportunities.

The Roadblock:
HPD’s land-use approval process for projects requiring financing can take up to five years, threatening project viability.

4. Reduced Parking Mandates: Big Cost Savings

Parking requirements have been significantly reduced or eliminated under a new three-tiered system:

• Inner Transit Zone: No parking mandates for new developments.
• Outer Transit Zone: Parking requirements reduced by 12-35% for market-rate units; waived entirely for affordable units.

The Savings:
Developers can save up to $100,000 per parking space eliminated, depending on the project’s scale and location.

The Trade-Off:
While these savings are substantial, delays in approvals and other administrative hurdles could offset financial benefits.

5. 20% Additional FAR Through UAP: Incentivizing Affordable Housing

The Universal Affordability Preference (UAP) offers up to 20% additional Floor Area Ratio (FAR) for projects that include permanently affordable units.

Key Requirements:

• Affordable units must be capped at 60% Area Median Income (AMI).
• Projects must comply with the new citywide framework, replacing the patchwork of Inclusionary Housing Designated Areas.

The Catch:
Developers relying on this incentive still face delays as HPD finalizes guidelines for implementing the UAP program.

How This Affects the Market

The City of Yes has the potential to transform NYC’s real estate market, but it comes with both opportunities and challenges:

Opportunities

• Increased Housing Supply: Easing the housing shortage in high-demand areas.
• Higher Property Values: Upzoning and transit-proximity could boost demand and value.
• Office Space Repurposing: Conversions offer a profitable way to address NYC’s vacant office crisis.

Challenges

• Economic Obstacles: Rising construction costs, interest rates, and tariffs still threaten projects on the margins.
• Administrative Delays: HPD’s slow approval processes remain a bottleneck, with land-use projects taking 5+ years to secure financing.

By the Numbers 

• 82,000 potential new homes: Expected to be created over the next decade. (NYC Council Press Release)
• $5 billion investment: Funding earmarked for housing and infrastructure improvements. (NYC Planning Documents)
• Up to $100,000 savings per parking space: Developers stand to save significantly under the new rules. (Parking Costs Study 2023)
• 1,600 office buildings: Estimated in NYC, representing significant conversion potential. (NYC Planning Data)

The Takeaway

The City of Yes is NYC’s most ambitious zoning reform in decades. While it opens doors for landlords and developers, the path forward isn’t without hurdles. Economic challenges, administrative delays, and funding bottlenecks remain significant obstacles.

To fully capitalize on these changes, landlords must act decisively, navigate the complexities, and adapt to NYC’s evolving real estate landscape.

💡 Need guidance? Contact Rosenberg & Estis today to ensure your projects align with these reforms and avoid costly delays.

Founded in 1975, Rosenberg & Estis, P.C. is widely recognized as one of New York City’s pre-eminent real estate law firms. R&E provides full-service representation and advice in every aspect of real estate, from performing due diligence and evaluating financing, to handling joint ventures, acquisitions and leasing, construction and design team agreements, property tax exemptions and abatements, land use and zoning matters, Real Property Income & Expense (RPIE) filings, real estate tax certiorari, co-op and condo offering plan filings and board representation, distressed situations workouts, foreclosures and bankruptcies, trust and estate planning, as well as the litigations and negotiations which sometimes ensue when deal-making. R&E’s wealth of experience in New York real estate makes it the ideal thought partner for owners, developers, not-for-profit corporations, educational institutions, sponsors, equity investors and lenders in both real estate transactions and in all court venues.