Monday, February 28, 2005


Subject: BLIGHT BY LAW (from a writer with a blighted mind)
Date: 2/28/2005 2:23:35 P.M. Eastern Standard Time
Sent from the Internet (Details)

This article is late to the argument being made (we made this two years
ago), but also misses the point. (it's also mostly about Hudson Yards,
which is arguably a moot point).

It's not the zoning, but the threat of re-zoning, since 1993 (when Cuomo
first proposed a stadium), that has frozen development on the WS. People
will invest in low-density neighborhoods if given a REASONABLE market and
CERTAINTY, which is why we have so many service-related businesses there
now. What has prevailed on the WS is UNCERTAINTY. No one will build or
enter into long-term leases not knowing the future of the area's zoning.
Hence, many properties are frozen.

While the article argues the WS and other locations are badly zoned, this
writer (as she so often is and given the Manhattan Institute pedigree) is
misinformed. Most zoning exists from the 1961 Zoning Resolution (which in
turn came from the 1916 efforts) and reflected for the most part existing
uses. While the WS had more industrial uses in 1961 than it does today, it
still does have many industrial properties (Fedex and parking lots fall
into this category and despite those who inherit Christine Latengano
disease, they do serve an important purpose in the health of the city).

What she describes as a renaissance of development is more accurately seen
as neighborhood destabilization and displacement of existing residents and

NY Post

February 28, 2005 -- ONE important fact has been overlooked in all the
brouhaha over the West Side stadium: The area is now a wasteland because
the city government has long mandated that it be so ­ and we don't need a
stadium to change that. And Manhattan's far West Side is far from the only
part of town to suffer from government-mandated blight.

New Yorkers tend to think of the city as an exceptionally dense place,
where every parcel of land is developed to its highest and best use, with
no property left over for new houses or apartment buildings. In fact, New
York is full of vacant land, including highly desirable property on the

The problem: This land is zoned improperly ­ or held off the market
altogether by government entities like the Port Authority or the city's
Department of Sanitation. That's the main reason why, even when New York as
a whole is booming, most of our waterfront is derelict or grossly underused.

The Bloomberg administration, which has paid more attention to the
waterfront than any administration in memory, believes the Jets stadium it
wishes to build over the MTA rail yards is the best way of reviving
Manhattan's West Side. But the sprawling rail yards are a blight because
the city's zoning restricts the property to low-scale manufacturing ­ an
economic use that doesn't actually exist in New York.

If New Yorkers learn nothing else from this mess they should learn this:
City government withholds or confers value on property through its zoning.

The city's basic zoning measure is the Floor Area Ratio (FAR) ­ the total
floor area that will be allowed on a lot, divided by the lot size. The MTA
property is zoned to an extremely low FAR of 2, which allows a building of
20,000 square feet of floor area on a zoning lot of 10,000 square feet. The
Jets plan calls for an extraordinarily high FAR of 12.

To put these figures in perspective: The main boulevards of the West Side,
like 86th Street and Broadway, are basically zoned to a FAR of 10, which
allows for towers and high density.

No developer is going to bid for property with a FAR of 2 ­ because it has
no value. The value of the MTA property lies entirely in the presumption
that the city will rezone it. If the city refuses ­ which it can indeed do
­ the property will have no development value. (The state could also step
in via its Empire State Development Corp. and rezone the property over the
city's objection ­ though it says it would not do that.)

You can see the problem faced by MTA Chairman Peter Kalikow. As a
developer, he knows all about market value ­ but which market value should
he be demanding for his agency? Market value at a FAR of 2 or a FAR of 12?

But here's the more important part: It's not just the Hudson Yards.

Look around. Any time you see a swath of derelict property near a good
neighborhood (which these days is most of New York), you can pretty well
figure that nine times of 10 it's badly zoned.

Every borough has a neighborhood held down by zoning: Red Hook in Brooklyn;
Sherman Creek in Northern Manhattan; Dutch Kills in Long Island City,
Queens; the North Shore of Staten Island; most of the Bronx waterfront.

Worse, often the mis-zoning goes hand-in-hand with government use ­ thus
Brooklyn's waterfront is simultaneously held down by its manufacturing
zoning and by the dominant ownership of the Port Authority, which simply
stockpiles property and lets it languish.

After all, government agencies don't pay carrying costs and aren't
constrained by any lack of income, so they can persist in the mis-use of
property that should be highly valued. This is why government can
cavalierly make location decisions without regard to market value.

Take the Bloomberg administration's decision to site a huge waste-transfer
station on the Hudson River at 59th Street. If it were valuing this
property correctly, it wouldn't dream of putting a garbage dump on prime
property, up river from the cruise ship piers it intends to renovate ­ and
smack dab in the middle of the West Side renaissance.

Nor would the Port Authority maintain the dilapidated Pier 40, which it
uses for parking, just north of Battery Park City. No one would call
parking a proper waterfront use.

In other words, government land-use policy often promotes twin evils:
First, holding down the value of property by maintaining the wrong zoning
and second, siting undesirable government uses in or adjacent to those same
wrongly zoned properties, holding values down further.

The Bloomberg administration knows this, and has proposed the most
extensive rezoning since the disastrous Wagner administration rezoning of
1961, which extended manufacturing zoning inland from the waterfront.

But for every neighborhood that City Hall proposes to rezone, an adjacent
neighborhood stalls. The city is rightly rezoning the waterfront North of
the Brooklyn Bridge. But it's also leaving neighborhoods like Red Hook,
below the bridge, trapped by industrial zoning.

The dead hand of industrial zoning prevents residential development,
despite historically high demand, and forces would-be developers into the
city's convoluted, expensive and time-consuming appeals process through the
Board of Standards and Appeals. Even properties that are successfully
appealed ­ like the residential conversion of an old warehouse at 160 Imlay
Street on the Red Hook waterfront ­ can then be halted by litigation.

Last week's Olympics Committee visitors surely asked themselves: How can
New York's waterfront be such a mess? Our Olympic competitors, London and
Paris, have gorgeous waterfronts. But theirs aren't held down by our
peculiar combination of non-residential zoning and egregious government uses.

Julia Vitullo-Martin is a senior fellow at the Manhattan Institute.

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