Unintended Consequences Predicted for de Blasio's Inclusionary Zoning Policy

Rebecca Baird-Remba reports on a loophole in a mandatory inclusionary policy announced in July by New York Mayor Bill de Blasio. First, to summarize the policy, Baird-Remba writes that the city "will require market-rate developers to set aside at least 25% of their units in each new building as affordable housing."

The loophole, however: "New buildings with 10 units or less won’t have to abide by the new mandatory affordable rules." That creates a problem in East New York, where the policy will first be rolled out. That's because, according to Baird-Remba, in East New York "virtually all new market-rate construction is three or four-story masonry structures with fewer than 10 apartments."

The reality of the market that, according to Baird-Remba, render the inclusionary zoning policy ineffective on that side of town: "Taller steel-frame buildings cost more to build and are more to challenging to finance, particularly if they have subsidized units. Rents in the area simply aren’t high enough to justify the cost." According to New York YMIBY's archive, in fact, just one market-rate building above that threshold has filed permits in East New York all year long.

The article then explains how the East New York rezoning process will proceed, with a major release expected on September 21.

Sally Goldenberg reported on the critical component of this developing story, Mayor Bill de Blasio's proposal for mandatory inclusionary zoning, at the end of July.