The North Shore of Staten Island appears poised for a massive transformation. Five years in the making, the New York Wheel is slated to open next year. The Empire Outlets mall, right outside the Staten Island ferry terminal, is nearing completion. URBY, the high-end rental development on the nearby Stapleton waterfront, is at least 50 percent leased. And on top of all that, the de Blasio administration’s proposed neighborhood rezoning of adjacent Bay Street is very soon to enter the seven-month public review process required for approval by City Council.
The “forgotten borough” is receiving a new level of attention from developers after years of disinterest. Staten Island’s prior reputation as a sleepy town is not just a function of the ferry commute. Its low-density zoning has also kept developers away. In 2004, the borough status as the city’s suburban status was further safeguarded with a massive, borough-wide rezoning that established the island as the city’s first “Low Density Growth Management Zone,” with strict regulations to curb development. That rezoning was meant to help preserve Staten Island’s suburban character, prevent a Brooklyn-style overcrowding, and ease stress on Staten Island’s infrastructure.
The “downzoning uprising” as the New York Times called it in 2005, referring not only to Staten Island but to similar initiatives in neighborhoods throughout the city that sought to curb development, had its critics. Brad Lander, then director of the Pratt Center, suggested that given the city’s growing population, Staten Island ought to do its fair-share of absorbing the growth. Some critics saw downzonings—which took place frequently, but not exclusively, in white, upper-income neighborhoods—as efforts to exclude immigrant newcomers.
How the downzonings would affect property values was not well understood then, or now. The Times reported that property tax revenues might fall in the short term as land prices fell. As the thinking went, density limits would prevent developers from receiving a desired return, and they would no longer be interested in new construction. Yet, the Times reported, property values might also rise in the long term because the regulations would protect the character of desirable neighborhoods.
Research by MIT master’s student Leo Goldberg on the impact of the Bloomberg-era rezonings like Staten Island’s indicates that the impact of a zoning change on a neighborhood depended very much on what kind of new regime was put in place. Upzonings—which created higher density—were followed by an increase of wealthier people paying higher rents. Mixed zonings, which allowed higher density on some blocks while imposing lower limits on others, were followed by the same trend, with even greater decreases in low-income, non-white residents. Downzonings, however, were followed by slower rent growth, a declining median income and an increase in the number of non-white residents.
Staten Island’s 2004 Low Density Growth Management Zone wasn’t a downzoning in the typical sense; it changed a number of design regulations, not the allowable Floor Area Ratio (the proportion of permitted floor area to the size of a lot). But City Limits found that many of the typical post-downzoning trends—a declining median income, and relatively stagnant rents—occurred in Staten Island in the years following the zoning change there, though the island’s real estate market has been affected by many other factors beyond zoning.
All that could be changing with the revitalization of the waterfront and the de Blasio administration’s proposed rezoning of Bay Street. While that rezoning might seem to accomplish what critics wanted—ensuring Staten Island does its fair share of adding to the housing supply—it’s concerning that the North Shore, the community targeted for a rezoning, is Staten Island’s poorest, where the median income is $42,893 and only 20 percent of the population is white. By comparison, Staten Island’s median income is $72,569 and 78 percent of the population is white. The gentrification risks that come with rezonings will be born by Staten Island’s much poorer North Shore.
And the rest of Staten Island isn’t going to get upzoned any time soon. In fact, the 2004 rezoning is heralded by many as a great success—and with the impending development on the waterfront, constituents are still pushing for more downzonings.
No room for the baby carriage
The 2004 downzoning has its origins in the development boom of the 1990s. It was real, and not just by Staten Island standards: of all New York City neighborhoods, the suburban South Shore had the fourth largest numerical increase in housing stock from 1996 to 1999, with the creation of 4,618 units. From 1990 to 2000, the borough’s population increased by 17 percent, the largest proportional increase of the five boroughs (though, in raw numbers, other boroughs added more). There were concerns about overcrowded schools, subway traffic, and stresses on Staten Island’s sewer and storm water infrastructure, which was not built to handle larger populations.
“I had just been elected borough president,” says James Molinaro, who was Staten Island’s chief from 2003 to 2013. “I said: it’s enough.”
He says townhouse developers were exploiting outdated land-use regulations, cramming up to 52 apartments on three acres of land.
“If this policy was kept, what we were building, these would be the slums of tomorrow, because the kids have no place to play,” he recalls arguing. “There are these hundreds of town houses, and they were actually playing in the street, because there was no backyard—the backyard, without exaggeration, was four feet. You couldn’t put a baby carriage back there.”
Molinaro, who grew up in a tenement on a street bustling with factories in the Lower East Side, had moved to Staten Island in the 1960s “just to have a piece of land.” He remembers when the borough was called the “farm to the city” and was eager to protect its suburban character. He invited then-Mayor Bloomberg to take a tour, and Bloomberg followed up by sending his planning chief Amanda Burden to co-chair a task force with Molinaro to consider a rezoning. Current Borough President James Oddo also played a key role.
The task force’s work lead to the creation of a new zoning category called the Lower Density Growth Management Area. Staten Island was then designated the first such area, with Bronx Community District 10 (Throgs Neck) designated soon after. The regulations applied mostly to low-density residential areas and instituted regulations pertaining to parking, trees, roof design, yards, open space, roadways, and suburban design. Molinaro says it required 30-foot backyards, and reduced the number of homes you could effectively build on three acres from 52 houses to 19. He says it also updated Staten Island’s land-use regulations for the modern Staten Island family, where the mother works and each family needs more than one car: the new regulations required two off-street parking spaces for every one-family home.
While it is generally believed that Bloomberg granted the 2004 rezoning to Staten Island in order to win the borough’s reelection vote, Molinaro says Burden and Bloomberg both understood just how badly
Staten Island needed the downzoning to protect its overtaxed infrastructure. And Molinaro says it wasn’t popular with all Staten Islanders: Some landowners were furious that they could no longer develop at the same density levels.
Molinaro also continues to defend the downzoning against those, like Lander, who argued Staten Island could have done more of its fair share of absorbing population density. Although the city has invested hundreds of millions of dollars over the past couple decades to upgrade the borough’s sewer infrastructure, Molinaro says that prepping the borough for a larger population would require a fortune more—to upgrade sewer and gas infrastructure, widen streets to comply with fire fighting codes, put power lines under ground, and create a more robust transportation system.
“When you don’t know the total problems, then there’s merit to it,” he says of Lander’s argument.
But he says he’s always recognized that the North Shore, which is well served by the ferry and has always been more pedestrian-friendly, provided opportunities for growth. Knowing that the New York Wheel and Empire Outlets were in the cards, he worked with Burden to explore opportunities for development in the area. One of the outcomes of their work was the 2008 Special St. George District Rezoning, affecting a small part of the North Shore. It allowed modest density increases designed not to block the views of the harbor from residencies on the hills, with new regulations to encourage commercial storefronts on ground floors and a friendlier pedestrian environment.
Saving the birds and the trees
In the years that followed the 2004 downzoning, Staten Island’s growth did slow down, though it’s hard to tell exactly how much was caused by the rezoning.
Staten Island’s population grew only 5.6 percent over the following decade, but the city’s overall growth rate slowed down greatly as well, and Staten Island’s growth rate slowed down only slightly more than the others, and was still the highest among the five boroughs.
The data on housing units is a little more notable. While in 2000 there were over 3,000 certificates of occupancy issued for Staten Island, the second highest among the boroughs, in 2015 there were less than 500 issued, leaving Staten Island by far the most quiet.
City Limits spoke with six Staten Island residents, among them three real estate industry professionals, two neighborhood association presidents, and a former community-board chair, who spoke of the 2004 rezoning as a necessity and as a success, though some noted that there were still some areas with outsized development that, in their opinion, needed better controls. (And some neighborhoods, like Westerleigh, did get a somewhat more reluctant Amanda Burden to grant them an even stronger downzoning.) Many saw the rezoning as having a good effect on the property values of Staten Island homes.
In actuality, median sales prices for single-family homes did rise, but pretty much on pace or even less than they did citywide. According to data from the NYU Furman Center, in 2000, the average Staten Island home sold for about $302,000, while the average New York City home sold for $314,000. By 2015, that average Staten Island home sold for $403,000, while the average New York City home sold for $460,000. This is fairly consistent with historical trends, too: Staten Island’s housing prices grew at a slower pace than the rest of the city during the 1980s housing boom too. And there’s a variety of factors beyond zoning that could have made an impact here: Staten Island had to survive the devastation of Hurricane Sandy. A national trend toward urban living may also have increased the demand for more centrally located homes in other boroughs.
David Gerts, a Staten Island resident and real-estate broker who sells homes in several boroughs, says he believes downzoning does have the effect of keeping a lid on housing prices, with land values falling as multifamily developers lose interest. It’s the sacrifice, he says of getting to “see trees and hear birds and even once and a while have a deer pass by.”
The costs of a slow down
There are costs to downzonings, however, that not everyone talks about.
The Reverend Janet Jones of Rossville AME Zion Church on the South Shore recalls her church’s efforts to develop affordable senior rental apartments on a parcel of vacant land owned by the church.
This was in 2008, after the 2004 borough-wide downzoning, but existing zoning for the plot still allowed the African Methodist Episcopal church to build a four-story residential building. The church still needed some approvals for construction, however, and were faced with virulent animosity from other South Shore residents that sometimes took on racial overtones, with one man calling the proposed senior housing “projects” and some people asking, Jones recalls, “what kind of people are going to be living in these buildings?” The South Shore is 93 percent white, according to the 2010-2012 census.
In 2010, State Senator Andrew Lanza, accusing the church of harboring greed for profit, sponsored another downzoning for the neighborhood that prohibited townhouses, putting the kibosh on the church’s project. Jones still mourns the loss of an opportunity to meet the neighborhood’s need for affordable senior housing. While she sees that downzonings, like the 2004 Low Density Growth Management Zone, can be a useful tool to limit overcrowding and traffic, she says the church’s project would have included off-street parking and would not have burdened the neighborhood.
In the broad picture, it’s hard to say how much Staten Island’s multiple downzonings might have contributed to the city’s affordability crisis. Not every townhouse that never got built would have been affordable, but some argue that reducing the overall supply of housing in the city creates competition for existing units, raising prices in the city overall. On the flip side, it’s possible, though not proven, that the downzoning actually helped to slow rent growth in Staten Island. According to data from the Furman Center, from 1996 to 1999, median monthly rents for Staten Island’s three community districts grew between $20 and $50. Again from 1999 to 2002, Staten Island’s median rent increased by $13, roughly on pace with city averages. Yet from 2006 to 2014, Staten Island’s median rent decreased by $19, while increasing $162 in the city as a whole.
Still, that doesn’t mean that the borough couldn’t have used more subsidized, affordable rental housing. In fact, in part due to an increase in low-income residents, even though Staten Island rents remained relatively stagnant, the number of families paying more than 50 percent of their income toward rent rapidly increased. On a ranking of neighborhoods by the number of severely rent-burdened households, Staten Island’s North Shore went from 34th in 2000 to 12th in 2015.
Goldberg says the increase of non-white, low-income residents in downzoning areas may be in part due to the displacement of such residents from upzoned areas of the city. Gerts, the real estate broker, also thinks that the increase of low-income people in Staten Island might be attributable to people getting priced out of other, gentrifying boroughs. Yet while Staten Island’s rents might have been more affordable than other parts of the city, they were still high for the incoming low-income population.
For some, the downzoning meant more than just a loss of opportunity for the creation of rent-restricted housing. According to North Shore entrepreneur Bobby Digi, the downzoning also meant that the immigrant community in the North Shore was not receiving the investment or the attention it needed.
Digi, the son of a Nigerian car-dealership owner, grew up in the North Shore. After getting his education and travelling abroad, he returned only to find “so much that hadn’t changed in the ghetto” and became strongly invested in improving his neighborhood. As an entrepreneur, he invested in two properties on Water Street, which intersects with Bay Street, with the intent to redevelop them. Then came the 2004 downzoning, which forced him to downsize his project.
“It did slow down development along the corridor, and it was part of why, in my opinion, things slowed down to the pace that they slowed down,” he says. “There was a bit of revitalization going on, but at that point, people then stopped. They were looking elsewhere. They were looking to Jersey.”
For Digi, Staten Islander’s preoccupation with downzoning—with preserving their perfect views from the hill—was one among many things that has stymied revitalization in the low-income North Shore area. Even now, he says, investors are still second-guessing what’s to come. Yet he believes that with URBY and the proposed Bay Street rezoning, something really is finally about to change in the North Shore.
The next Williamsburg?
The declining rents on the island seen from 2006 to 2014 appear about to reverse themselves. According to data from StreetEasy, the median asking rent in Staten Island increased from $1,250 in 2013 to $1,817 in 2015. That’s asking rent for apartments on the market, not median rent for all units, which tends to have a slower growth rate, and other measures show different trends. But there are other signs of change: Real-estate professionals are reporting a rise of bidding wars for investment properties in the North Shore and an increase in demand for rentals.
“Without question, developers have caught on to what we always knew was a dynamic market with some really incredible upsides,” says James Prendamano, of the Staten Island real-estate firm Casandra Properties, which is engaged in leasing URBY.
“There was limited swaths of land in which we had progressive zoning in place,” Prendamano says, explaining that by “progressive” he means zoning that allows for mixed-use, mid-rise buildings. “City Planning has worked very hard to remedy that.”
City Limits spoke to a few neighborhood associations who were concerned about the number of new apartments slated for Bay Street—over 2,500 apartments—and how it could impact Staten Island’s infrastructure. Yet interestingly, we heard a lot of enthusiasm for the Bay Street corridor from people who supported the 2004 downzoning—so long as most of the rest of the borough remains a low-density safe haven.
“This high density area of Staten Island gives you the ability to have your own downtown, so if you want to have Manhattan-style fun on the weekend, you don’t have to go to Manhattan,” says Gerts, the real-estate broker. “You’re going to have the best of both worlds.”
Not only that, but Gerts believes the proposed rezoning and waterfront revitalization may already be causing a small uptick in the values of nearby single-family homes.
A resident of the South Side, Gary Angiuli, is repurposing a warehouse on Minthorne Street, adjacent to Bay Street, with a space for local retailers, and he hopes to one day redevelop a vacant property on Bay Street with multifamily housing. He thinks the 2004 downzoning was important to curb out-of-context development, but is excited about the proposed changes for Bay Street and the waterfront.
“It’s really not because I own real estate here. It’s because it’s a magnificent waterfront with beautiful views of the skyline of Manhattan,” he says. “I think it’s going to become the next, I hate to use the word ‘Williamsburg’ because maybe it sounds a bit cliché…but you are going to see tremendous growth over the next decade and the rents will catch up to the other boroughs.”
Digi has decided to rent out one of Angiuli’s spaces on Minthorne Street and start a pub. He’s been engaged in the Bay Street rezoning planning, is excited to see the city’s streetscaping improvements already taking place, and thrilled the city will be investing in the creation of a new recreation center nearby. He’s also hoping the population influx will help the existing medley of African, Sri Lankan and Latin American businesses on neighboring Victory Boulevard. Yet he also has some serious fears.
“My concern is what will happen to the people who have been here?” he wonders. “What will happen to the fiber of the community, and how quickly will it change?”
He knows the city is investing $500,000 in commercial improvements for existing businesses in the area as part of the Department of Small Business Services’s Neighborhood 360º program, but he wishes the city would provide more support to ensure local businesses stand to benefit, not to get displaced.
“They’re going to [need to] get really creative, develop niche marketing,” he says of local storeowners. “Will they have the inspiration even? You can get overwhelmed.”
What happens to the neediest?
The Reverend Jones is more blunt.
“The powers that be downzone to prevent what they don’t want, and they rezone to get what they do want,” she says. “I think that’s what’s happening here on the North Shore.”
She says that the new housing on Bay Street, even though 20 to 30 percent will be rent-restricted under the city’s new mandatory inclusionary housing policy, will still result in displacement. The so-called “affordable housing” she says, “is not going to meet the needs of the neediest people.”
As City Limits reported in November, in northern Staten Island, 76 percent of households making less than $20,000 are severely rent-burdened, as compared to only 9 percent of families making between $35,000 and $50,000. The city’s mandatory inclusionary housing policy, however, is more aimed at creating housing for families in the latter bracket or who are even better off, though the city could use additional subsidies to reach lower income levels.
Even Angiuli, the Minthorne Street developer, recognizes that the housing created by mandatory inclusionary housing is not targeted at families in the lowest income brackets.
“I think you are going to have some people who are displaced and that’s always a sad and disheartening thing and as a whole, as a society, we could do better with that problem,” he says. Yet he still thinks that overall, the Bay Street rezoning will be a great thing because it will create lower middle-income housing and new economic opportunities.
“It’s a disservice to people living below the poverty-line to allow or encourage that the whole neighborhood be open … only for people making below the poverty-line,” says Leticia Remauro, former Community Board 1 chair and secretary at the Staten Island Downtown Alliance. She argues the North Shore needs more of an economic mix. “There were more churches and liquor stores in a square mile than there were fresh vegetables and grocery stores and anything else that you need.”
But Reverend Faith Togba of Bethel Worship Center on Bay Street says he is already seeing the impact of the attention generated by the rezoning: families are being gentrified out of the North Shore, he says.
“If you cannot live in the North Shore, you cannot live in Staten Island,” he says.
The best, or worst, of both worlds
Much of Bay Street’s fate lies with Councilmember Debi Rose, who will have to sign off on the proposal. The 64-year-old Staten Island native is the first Black elected official to represent Staten Island. Her comments so far have, like Digi’s, reflected a mix of excitement for investment and redevelopment, and concern about the fate of existing residents and businesses.
“Of all the issues that my constituent services team handles on a daily basis, housing-related concerns are by far the most prevalent. The proposed rezoning of the Bay Street Corridor presents us with an opportunity to expand our supply of both market rate and affordable housing, while making needed investments in our infrastructure,” she wrote in an e-mail to City Limits.
“I have thought long and hard about how best to raise the level of amenities and infrastructure while preventing displacement of long-time residents. My priority has always been for market-rate and affordable units to be well integrated—which is the goal of Mandatory Inclusionary Housing. I had asked for the Environmental Impact Statement to look at all options on public sites so that we could do a proper analysis of what would be needed to meet our housing goals and subsequent infrastructure needs,” she wrote, referring to several plots of public land that advocates like Jones want to see used to build 100 percent affordable housing.
Yet even as Rose is deliberating, a number of other rezoning initiatives are beginning to pop up. The neighborhoods of Rosebank, Ford Wadsworth, and Clifton, which are adjacent to Bay Street, are applying to the city for a zoning analysis; they are concerned about “overdevelopment, traffic congestion, school seat shortages, infrastructure incapacity,” among other issues, according to a letter from Rose in support of their application. In addition, Staten Island’s elected officials are working with the College of Staten Island to create an inventory of land parcels that are vulnerable to out-of-context development in order to inform future-land use policy. In other words, the downzoning bug is still very much at large.
There are two ways to see this. Either Staten Island is moving toward an ideal mix of quiet suburbia and thriving downtown, or it’s threatening to pursue a dangerous agenda of downzoning homes and upzoning rental housing that some researchers say triggers the most severe displacement.
In the latter version of the future, the North Shore becomes the next hub for millennial newcomers seeking hipness. As the majority of Staten Island’s housing stock is unregulated, low-income tenants are soon vulnerable to rising rents and, for those who don’t win a housing lottery apartment on Bay Street, displacement and homelessness.
Perhaps the inconvenience of a ferry commute will mitigate the dangers of rapid gentrification. The once-forgotten borough’s future is yet unclear.