The need for new housing, especially affordable, in these high-opportunity neighborhoods is much more acute than the need for more commercial space. 

Adi Talwar

The E.V. Haughwout building stands with its two cast-iron facades on the corner of Broome Street and Broadway in SoHo, Manhattan.

Through the vast majority of his two terms in office, the only neighborhood rezonings proposed by Mayor Bill de Blasio were in lower-income neighborhoods of New York home to a majority of people of color, like Inwood and East New York. Now, in the last year of his term and pushed by housing and integration advocates, the administration is finally moving to rezone SoHo and NoHo, majority-white and exceedingly wealthy neighborhoods—a rezoning that, if passed, would create much-needed new housing and begin to integrate our city, which by one measure is the second-most racially segregated major city in the nation.

The benefits of allowing more people to live in SoHo and NoHo are clear: the two neighborhoods are served by a variety of subway lines, are walking or biking distance from major job centers (and SoHo is itself New York’s third-largest job center, after Midtown and the Financial District), and are in Community School District 2, which includes some of the best-performing schools in the city. They are, by any definition of the term, high-opportunity neighborhoods—exactly where a city claiming to be progressive should be creating more affordable housing and allowing more people of all races and income levels to live. Furthermore, in addition to the income-restricted affordable housing a rezoning would create, even the market-rate housing could help alleviate gentrification and displacement in neighborhoods like Chinatown and the Lower East Side by “absorbing” higher-income households who would otherwise move to those neighborhoods.

However, these broad benefits of the rezoning are at risk if the city moves forward with a critical part of its current proposal: increasing the allowable commercial FAR (“floor area ratio,” the measure governing how much square footage is allowed for a particular use) alongside an increase in residential FAR.

Addressing the area’s outdated commercial zoning and its reliance on ad hoc approvals might be an improvement over the status quo, but New York City can—and must—do better than simply easing the process to build new office buildings in SoHo and NoHo. The need for new housing, especially affordable, in these high-opportunity neighborhoods is much more acute than the need for more commercial space. The de Blasio administration’s original proposal for the rezoning would increase commercial FAR to 10 and residential FAR to 12 in designated opportunity areas while making commercial FAR 6 and 5 compared to 9.7 and 6 for residential in the rest of the rezoning area. Though the residential FARs are slightly higher than commercial in the administration’s proposal, not all land uses are valued equally—and even if they were, the affordability mandate in MIH, though worthy, makes residential development less profitable relative to commercial development, which has no such requirement.

At this moment in time, the prospect of more office space being built anywhere in the city may seem remote, but the attractiveness of SoHo and NoHo already has office developers salivating. The lot at the southwest corner of Bowery and East 4th Street, for example, is already being developed as an office tower, despite the possibility of increased allowable residential development if the rezoning passes. This site also provides numeric proof of the peril of increasing commercial FAR in the rezoning area: the ground lease that was executed on the site in 2019 valued it at over $600 per buildable square foot for commercial use—a lot more than the $244 per buildable square foot paid for a lot on East 33rd Street that is one of the few MIH development sites that have been approved in a wealthy neighborhood. Given this difference, the de Blasio administration should much more decisively incentivize residential development, either by raising the allowable residential FAR in the rezoning to the state-imposed cap of 12 in areas where that is not already part of the proposal, or by lowering the commercial FAR to 2 throughout the rezoning area. 

While the city’s housing needs are immediate and pressing, allowing both high-density commercial and residential development may simply encourage developers and building owners to take a wait-and-see approach to the office market’s recovery. Even if residential development makes more financial sense for the next year or two, we can’t afford developers taking that sort of time to determine what they want to build. While the city can’t dictate what each individual lot’s owner does with their land, it can change these incentives overall by making residential development a more attractive option than commercial uses like office space, ensuring that the rezoning results in the affordable housing we need.

The SoHo/NoHo rezoning could be an important step forward for housing equity in New York City. After a long seven years of focusing on low-income, POC neighborhoods, the mayor has listened to housing advocates pushing for more housing in white, wealthy neighborhoods like SoHo and NoHo. But without a more targeted approach to creating new housing, the de Blasio administration could miss out on the promised benefits of the rezoning and risks letting its last, best chance to create a more integrated, sustainable, and fair city go to waste.

Casey Berkovitz is a board member at Open New York, a grassroots pro-housing organization, and a senior associate at The Century Foundation, a progressive think tank.