On December 5, 2024, the New York City Council approved the City of Yes for Housing Opportunity, a significant city-wide zoning amendment aimed at adding 80,000 housing units over the next 15 years. This bulletin provides an overview of the plan and what it might mean for future development in the city, as well as how the plan interacts with other city and state tax incentives to spur affordable housing.
Key aspects of City of Yes for Housing Opportunity
Here are some of the provisions that the New York City Council included in its housing incentives package:
Increased Floor Area for Affordable Housing Projects
The plan introduced the Universal Affordability Preference (UAP), which provides a 20% density bonus to projects where the additional space is dedicated to permanently affordable housing. The affordable units must, on average, be affordable for households earning 60% of the AMI, with no more than three income bands and no band exceeding 100% of the AMI. For developments with 10,000 square feet or more of affordable floor area, at least 20% must, on average, be affordable to households earning 40% of the AMI. The UAP replaces the City’s current Voluntary Inclusionary Housing program.
Mandatory Inclusionary Housing (MIH) Reform
The plan allows City Council to require “deeper affordability” units as part of proposed projects during rezoning. This means the council can mandate that 20% of the units be set aside for households earning an average of 40% of the AMI, with income bands not exceeding 130% of the AMI.
Transit-Oriented and Town Center Development
The plan permits the construction of three- to five-story apartment buildings in low-density residential districts located near public transit. For such projects with 50 or more units, at least 20% of housing must be permanently affordable to households earning at least 80% of the AMI. The same requirements apply to town center developments, where two to four stories can be added above commercial space in low-density districts, except for certain areas zoned for single- and two-family homes.
Floor Area Ratio (FAR) Reform
The plan enables the creation of two new residential districts (R11 and R12), which will permit residential FARs of 15.0 and 18.0, respectively. However, areas still must be rezoned to these new districts to permit the expanded construction size.
Parking Requirements
The plan creates three zones for parking requirements in the city. In Zone 1, parking requirements are completely eliminated (includes most of Manhattan, Long Island City, and portions of Western Queens and Brooklyn). In Zone 2, parking requirements are reduced (includes much of the rest of the city well-served by public transportation). In Zone 3, current parking requirements remain intact (includes outlying portions of the outer boroughs less well-served by public transportation).
Accessory dwelling units (ADUs)
The plan legalizes the construction of accessory dwelling units (ADUs) throughout much of the low-density zones in the city with the following exclusions: (i) ground floor and basement ADUs in coastal flooding areas or inland areas prone to flooding, and (ii) detached and backyard ADUs in historic districts or in R1A, R2A, and R3A (low-density contextual) zoning districts unless those areas are also located in the "Greater Transit Zone."
Office to Residential Conversions
The plan relaxes some of the restrictions on office-to-residential conversions. Now, buildings built before 1990 can be converted to residential purposes throughout the city.
What tools can owners and developers use in conjunction with City of Yes?
Developers planning on constructing under the Universal Affordability Preference (UAP) may wish to utilize the tax exemption under 485-x. By constructing buildings under both programs, developers can qualify for tax breaks by meeting the affordability requirements under 485-x with the units created by the density bonus under the City of Yes initiative, provided all affordability requirements are met under both programs. Please refer to ”The Developers Guide to Affordable Neighborhoods for New Yorkers, AKA the 485-x tax exemption” for more information on 485-x.
For developers planning on converting non-residential space to residential space, the Affordable Housing from Commercial Conversions (AHCC) program provides real property tax exemptions for those converting non-residential buildings into residential housing if a portion of the new units are affordable. By integrating these programs, new construction, and the conversion of existing buildings, meeting the demand for affordable housing is possible. Please refer to the “New York State budget incentivizes conversions of non-residential space to affordable housing” for more information on AHCC.