The Atlantic Avenue rezoning got done with virtually no drama — a big win for the real estate industry.
In this case, a deal with no drama is actually quite dramatic. To understand why, you need to know the history and the stakes.
Rezonings are crucial to multifamily development and easing the housing shortage, but the city’s politics turned against them in the 2010s.
The seeds of resistance were planted in the 2000s when Fourth Avenue in Park Slope, Downtown Brooklyn, Long Island City, and Greenpoint and Williamsburg were rezoned, all without affordability requirements.
Despite the appearance of a construction boom, demand for apartments still outstripped supply, triggering a rise in rents and gentrification. Progressives falsely blamed development, and rezonings became politically difficult.
Protesters plagued the de Blasio administration’s 2016 rezoning of East New York. Plans to rezone Bushwick and the South Bronx were withdrawn. Rezonings of Inwood, Gowanus and Soho got done, but took years longer than they should have.
It looked like Atlantic Avenue, which as you can see from these photos is woefully underdeveloped, would meet similar resistance when the area’s primary Council member, Crystal Hudson, started drawing lines in the sand. But her equally progressive colleague Chi Ossé, who represented a piece of the area to be rezoned, began beating the drum for more housing. The tide turned, and progressives embraced abundance.
Hudson (and Ossé) ultimately approved a plan that doesn’t demand any more affordability on private sites than is already required of upzoned sites by the 2017 Mandatory Inclusionary Housing law. (A minor caveat is developers must use MIH’s Option 1: one-quarter of units affordable to households at 60 percent of the area median income, on average.)
Hudson likely recognized that developers are already struggling to build apartments under the state’s 485x tax break, and that requiring more affordability than MIH would result in nothing being built.
Instead, she negotiated with the city for 900 taxpayer-subsidized units across seven public sites. That allowed her to declare that 40 percent of the 4,600 units generated by the rezoning would be affordable.
Ironically, the all-affordable projects might be more lucrative to build than the mixed-income ones. And perhaps their developers won’t have to wait the usual five or six years for the city subsidies to come through.
What we’re thinking about: Will the Trump administration’s immigration raids at construction sites have any noticeable effect on the cost or pace of development? Send your thoughts to eengquist@therealdeal.com.
A thing we’ve learned: Someone has published a book called “Spouse Hunting: Using the Rules of Real Estate to Find the Love of Your Life.” Like, having a title agency check whether your girlfriend or boyfriend is already married?
Elsewhere…
Success has a thousand fathers — and mothers, too. Take the bill that prevents brokers retained by landlords from charging tenants for their services, a measure that is popular with progressive voters.
Campaign literature from City Council member Shahana Hanif says she “passed the law banning broker fees.” Hanif might have sponsored and voted for the bill, but her Brooklyn colleague Chi Ossé is the member who introduced, championed and passed it.
Hanif is trying to fight off a challenger in the June 24 Democratic primary, which might explain the credit-grab and the exaggeration. (The bill doesn’t ban broker fees; it requires they be paid by the person who hires the broker.)
Mayor Eric Adams did not sign the bill but let it become law by not vetoing it. However, it is being challenged in court by the Real Estate Board of New York and has yet to take effect.
Closing time
Residential: The top residential deal recorded was $13.9 million for a 4,063-square-foot, sponsor-sale condominium unit at 500 West 18th Street in Chelsea. The property was listed by Deborah Kern and Steve Gold of the Corcoran Group.
Commercial: The top commercial deal recorded was in Homecrest, Brooklyn. Health Insurance Plan of Greater New York sold the 36,000-square-foot medical office at 3245 Nostrand Avenue to Yeshivat Darche Eres for $8.75 million.
New to the Market: The highest price for a residential property hitting the market was $30 million for a co-op unit at 4 East 66th Street in Lenox Hill. Mary L. Fitzgibbons and Martha Kramer of Brown Harris Stevens have the listing.
— Matthew Elo