New York City’s “City of Yes” rezoning is the most transformative zoning initiative in decades. Designed to unlock the city’s housing potential, it is poised to reshape development opportunities and bring much-needed affordable housing to the market. This initiative modernizes outdated zoning laws and creates new incentives for developers, making it one of the most impactful policy shifts since the original zoning resolution was introduced.
The City of Yes rezoning impacted every aspect of the zoning resolution. For our blog, we will dive into only a few of its details. Specifically, we will discuss Universal Affordability Preference (UAP), Qualifying Residential Sites (“QRS”), and revised parking requirements.
Universal Affordability Preference (UAP) is a new rule in the City of Yes rezoning plan that encourages developers to build more affordable housing. If a developer includes affordable apartments in their new building, they get to build a bigger building than normally allowed. The affordable units must be permanently affordable and must, on average, be priced for households earning 60% of the Median Income Area (AMI). The rule applies citywide, meaning that developers in any part of NYC can take advantage of it. In the most basic sense, UAP offers a clear win-win: Developers gain the ability to build larger projects, increasing profitability, while the city secures permanently affordable housing at scale. This incentive structure has the potential to significantly boost the supply of affordable units across all five boroughs.
Pairing UAP with the 485-x tax abatement is possible and we believe most developers will take advantage of the tax abatement when building a rental with UAP. The 485-x requirements for AMI are 80% for smaller buildings, and 60% AMI for larger buildings. Both requirements would be fulfilled through the UAP square footage in the buildings.
The second topic of conversation for this blog post is the Qualifying Residential Site (QRS). This refers to specific properties within low-density residential zones (R1-R5) that meet certain criteria, allowing for 3-4 story apartment buildings in areas traditionally limited to 1-family or 2-family homes. The objective of QRS sites is to fill a gap between single family zoning and high-density zoning. This is referred to as the “missing middle”.
Here are the key criteria to be considered a QRS:
1. Zoning District – the site must be located within a low-density residential zone, either in a R3, R4, or R5 contextual or non-contextual zoning.
2. Minimum Lot Size – The Property should have a lot size of at least 5,000 Sq. Ft.
3. Site Location on the block – The site must be situated on a wide street (at least 75ft) or the short end of a block (less than 230 ft).
4. Close to Transit: The property falls within the Greater Transit Zone.
By meeting all (4) of these criteria, the QRS can be developed into a larger building than is typically allowed by zoning. The FARs for a QRS can be found on the zoning table.
When the QRS is combined with a Commercial Overlay, there is an additional increase in FAR dedicated to ground floor retail. This additional FAR increase can be found in the zoning table.
The City of Yes initiative in NYC has introduced significantchanges in parking requirements for new housing developments, aiming to boost housing availability and reduce construction costs.
Previously, developers were required to include a certain number of parking spaces for new residential buildings, even in areas that were well served by public transportation. The new rules consider the proximity of sites to transit options to reduce the need for parking in these areas. The requirements are broken down into a Three-Zone System. Below are the three zones.
Zone 1: No Parking Requirements
- Areas: Most of Manhattan (except Inwood), LongIsland City, Parts of Western Queens and Brooklyn.
- Details: No parking requirements.
Zone 2: Reduced Parking Requirements
- Areas Covered: Regions with good public transit but where many residents still use cars. These areas are served by Subways or LIRR/Metro North Stations.
- Details: Developers need to provide fewer parking spaces than before
Zoned 3: Previous Parking Requirements Stayed
- Areas Covered: Neighborhoods with limited public transit options. These areas are not well served by Subways or LIRR/MetroNorth Stations.
- Details: Developers must continue to include the same number of parking spaces as previously required.
The City Planning Commission’s removal of parking requirements aims to reduce construction costs while allowing developers greater flexibility and improving walkability with the goal of increasing housing production.
The City of Yes represents a once-in-a-generation opportunity to reshape NYC’s housing market. By modernizing outdated zoning laws, incentivizing affordability, and reducing unnecessary costs like excessive parking requirements, this initiative paves the way for smarter, more sustainable development. At Landair Property Advisors, we are excited to help sellers navigate this evolving landscape, ensuring that they capitalize on the opportunities created by this landmark rezoning.
