Will Rezoning Cause or Resist Displacement? Data Paints an Incomplete Picture

At a hearing in East Harlem this December, a local activist voiced opposition to the de Blasio administration’s proposed rezoning of the neighborhood, arguing that allowing developers to construct new buildings, some as high as 35 stories, would result in the wholesale displacement of existing residents.

“We know because this process has already begun, started by the 2003 rezoning of East Harlem, which continues today with accelerated higher rents and fewer truly affordable apartments,” said Roger Hernandez of El Barrio Unite, referring to a Bloomberg-era rezoning of the neighborhood. “This has caused the disappearance of 20 percent of our Hispanic and African American community…That’s one out of every five neighboring friends and families.”

In neighborhoods throughout the city, concerns about the de Blasio administration’s rezoning strategy often sound like his: We saw what happened after the Bloomberg administration rezoned Williamsburg, Long Island City, downtown Brooklyn, these residents say. Familiar faces—black and brown faces—disappeared. So did the old bodegas. Developers tore down rent-stabilized tenements to build luxury apartments. And what Mayor de Blasio has in mind doesn’t sound too different.

The De Blasio administration, for its part, stands firmly by the idea that its neighborhood plans—rezonings tied to a variety of other community improvements—will not only revitalize communities that have long suffered from disinvestment, but will in fact alleviate the city’s affordability crisis. Officials argue that boosting the housing supply through growth will ease demand pressures on the rental market; that the administration’s new subsidy program and new mandatory inclusionary housing policy, which requires developers benefiting from an upzoning to rent a portion of units at below-market rates, will ensure the creation of low-income housing; that additional investments will preserve existing affordable housing.

How did we end up here—with everyone professing the same goal of affordability, and such radically divergent opinions of the strategy? Upzoning advocates blame the public’s misunderstanding of what causes displacement, while critics contend the administration is beholden to real estate interests.

Drilling down, it’s clear one of the central disagreements revolves around whether an upzoning can have a destabilizing effect on the existing housing in a neighborhood. Activists, and many urban planning experts, too, contend that both the attention brought by a rezoning and the actual development that follows can transform a neighborhood into a destination, increasing demand for housing in that neighborhood and prompting landlords to raise rents. As Lisa Bates, a professor of urban studies at Portland State University and a leading displacement scholar, puts it, “It’s like: ‘announcement, this is a place, everyone! Take your money, come over here.'”

Low-income renters who cannot easily adjust to increases in housing prices would thus be at risk of eviction. Because the de Blasio has followed the precedent of Bloomberg in selecting predominantly low-income neighborhoods of color as spots to increase density, some activists believe the mayor’s rezoning strategy is putting the city’s most vulnerable residents at risk.

The administration, however, refutes the assertion that market-rate housing could itself be a cause of displacement, and questions whether available data really confirms that Bloomberg’s rezonings uprooted families. At the same time, it disputes comparisons to the Bloomberg-era rezonings, arguing that its neighborhood plans are comprehensive in nature and include unprecedented investments in the preservation of existing affordable housing.

Data shows dramatic neighborhood demographic change following Bloomberg-era rezonings, but scholars disagree about whether this data proves a causal relation between the rezonings and displacement. And there’s also questions about to what extent de Blasio’s new housing and zoning policies could mitigate those effects. For some advocates, the administration’s dismissal of even the need to hold a conversation about such assumptions is a cause for concern.

What do experts say about the impact of adding market-rate housing?

Without the support of the federal government and with a limited budget, city officials argue, the city has to use the tools at its disposal to address the affordability crisis, which means harnessing the private market to create both market-rate and affordable housing.

 “We knew we could never subsidize our way out,” de Blasio told The Nation in November. “We needed a certain amount of private-market activity—with new ground rules, with new stipulations—to put up the maximum number of apartments. It might have been a legitimate or, in some ways, more pure position to just do fewer affordable apartments. What’s the more moral and correct thing to do? I came to the conclusion the goal was a huge number of apartments, and to maximize the number we could for the lowest-income families, because I thought we had an affordable-housing crisis that was reaching across the board.”

In other words: tackle the crisis by boosting supply across the board, which will reduce competition for older housing and ease demand pressures, while also using the new mandatory inclusionary housing policy and subsidies to ensure some units go to low-income families.

It’s certainly a reality that population is growing—so far, at twice the pace of the city’s 2010 predictions, having surpassed 2020 estimates in 2015. It’s also true that New York has not been able to secure funding from the feds to even maintain its aging public housing stock, let alone create new public housing (and who knows what will occur under HUD-appointee Ben Carson). But the administration isn’t just playing the cards it was dealt: it’s also making choices that favor a private market approach—for instance, to support the renewal of the 421a tax credit, which incentives the development of (usually high-end) rental buildings with a tier of rent-restricted units. That tax credit has cost the city more than a billion dollars annually in the past, and research suggests that the credit increases land values, which could make low-income housing more expensive to subsidize and potentially drive up rent levels in market-rate housing.

To some activists, the city’s choice to encourage a mix of market-rate and rent-restricted construction, rather than focus on subsidizing housing for the lowest-incomes, is one that comes with grave risks. Say you live in an upzoned neighborhood, this narrative goes: the 20 or 30 percent of new development that’s rent-restricted might not be actually be affordable to you. The other 70 or 80 percent is so expensive that it’s unaffordable to everyone in the neighborhood. Wealthier newcomers move in, with the disposable income to support new expensive amenities. As the neighborhood becomes increasingly popular, landlords begin harassing rent-stabilized tenants and real-estate brokers hound longtime homeowners with all-cash offers. Soon your landlord is giving you the ultimatum: agree to a whopping rent increase, or move out.

Are these risks real, and if so, is there any justification for trying to boost market-rate supply? Each of the scholars who spoke to City Limits acknowledged that the introduction of market-rate development could raise prices in the surrounding area, depending on the place and time. They had different opinions, however, on whether supply is still an important goal, and on how much to worry about displacement.

Mark Willis, senior policy fellow at the NYU Furman Center, acknowledges that adding new market-rate housing to a neighborhood doesn’t always translate into lower prices nearby, and could even “channel demand into that neighborhood,” raising rents in the short term. Still, he contends that with New York City’s population skyrocketing, boosting the overall housing supply is vital to keeping the lid on housing prices and that “all neighborhoods benefit in the long run if they allow for the production of new housing units.”

In contrast, Tom Angotti, a professor at Hunter College, says that the real problem driving the affordability crisis is the soaring costs of land, in great part as a result of city zoning actions. He’s also not completely convinced the city needs to construct more housing.

“I disagree with this notion that there’s this magical number of a million new people going to arrive in New York City…That’s not a fact, that’s a prediction and it’s not based on any careful, thought-about alternative scenario,” he says, adding that population growth has been driven by large economic development projects, but may begin to fall off in the next ten years. (This of course raises an additional question: how much is welcoming newcomers, particularly young and economically mobile ones, necessary for the city’s continued prosperity?) And even given that you might need some more housing, he says there are other ways to do it besides upzoning, such as renovating existing vacant buildings. Others are exploring solutions that would use space more efficiently, such as allowing “micro-units” and legalizing basement apartments.

Angotti and co-editor Sylvia Morse argue in their book Zoned Out! Race, Displacement, and City Planning in New York City that in some types of neighborhoods, particularly low-income neighborhoods in central locations, allowing market-rate development poses a massive displacement threat. Among other strategies, they call on the city to stop subsidizing developers and instead provide capital funds to construct and maintain low-income housing on community land trusts, as well as use the city’s regulatory powers to keep a lid on the price of land.

Leo Goldberg, in a 2015 master’s thesis for the department of urban studies at MIT, provides further analysis. On the one hand, he finds evidence that limiting growth completely—as in the many middle-income neighborhoods downzoned by Bloomberg—does exacerbate competition for existing units, driving up prices. Yet he also names a number of market distortions that have prevented added supply from working effectively to bring down prices, from the use of New York apartments as stash pads for foreign investors to the extremely high costs of land and construction, which means developers can only produce a return by renting and selling units at extremely high prices.

“Just saying no supply, no new growth is needed is definitely a mistake, but you have to be careful about what kind of growth you do promote,” he says. His solution would be “a more substantial portion of subsidized, low-income housing stock, but also unsubsidized construction in neighborhoods where market-rate units would not be price-prohibitive to low-income families, and in neighborhoods where there might be less risk that the new housing would induce displacement of low-income residents.”

Willis and Moses Gates, director of community planning at the Regional Plan Association, both share Goldberg’s contention that the city should upzone many types of neighborhoods, including wealthy ones. Gates has come up with a list of places with good schools, household incomes of over $50,000 and that are within .6 miles of mass transit that includes parts of the Upper East Side, Bay Ridge, Midwood, Forest Hills and other areas.

The Blasio administration says it is continuing to explore options for other places to promote density, but argues that some of the neighborhoods on Gates’s list would not be appropriate; officials say, for instance, that they’re wary about encouraging the demolitions of existing homes.

Are there stats to prove Bloomberg’s rezonings caused displacement?

Few studies have been undertaken of the overall effects of Bloomberg’s 120 rezonings, and New York City does not collect data about the reasons residents leave their neighborhoods. What we do know is how neighborhood demographics looked before and after rezonings.

In his thesis, Goldberg divides Bloomberg’s rezonings into three categories: upzonings, hybrid rezonings that limit the redevelopment of residential areas while allowing growth on major commercial corridors, and downzonings, which reduce density and preserve neighborhood character, potentially driving up property values.

Goldberg found Bloomberg upzoned neighborhoods that tended to be industrial or underperforming commercial districts with greater proportions of Black, Latino, and poor residents than in the city as a whole. Downzoned neighborhoods tended to be farther from the city core, with greater proportions of white residents and higher median incomes than the city as a whole. Hybrid neighborhoods—Park Slope, Bedford-Stuyvesant, West Harlem—were somewhere in between, and altogether their demographics aligned with city averages.

Goldberg found that after a rezoning, upzoned and hybrid neighborhoods experienced greater increases in rent, median income, and proportions of white residents than the city as a whole. In addition, the proportion of Latino residents decreased in hybrid neighborhoods and increased by only three percent in upzoned areas, while increasing by 10 percent in the city as a whole. The proportion of Black residents decreased significantly in hybrid neighborhoods, though in upzoned neighborhoods it decreased at about the same rate as in the city altogether. There were also decreases in the proportion of families making below $25,000 in both upzoned and hybrid neighborhoods, while that population increased in the city as a whole.

The reduced presence of Latino, Black, and poor residents was particularly extreme in hybrid neighborhoods, possibly suggesting those rezonings may have been the worst recipe for residential displacement. Angotti says a good example is the rezoning of Park Slope, which included an upzoning of Fourth Avenue and contextual zoning for the surrounding brownstones.

“New development has an even higher potential value because it’s near a brownstone neighborhood,” he explains. Rent-stabilized tenements on Fourth Avenue were demolished to make way for high-rise apartment buildings, allowing new, richer tenants to take advantage of the amenities of Park Slope.

Angotti points to the stark figures in Goldberg’s case study of the 2005 rezoning of Williamsburg as proof that rezonings at least must have exacerbated displacement in neighborhoods that were already ripe for gentrification. According to Goldberg, between 2000 and 2013, median monthly gross rents rose from $949 to $1,603, a 69 percent increase. Meanwhile, the Latino population of Williamsburg declined by 27 percent, compared to a 10 percent increase citywide, while the white population increased by 44 percent, compared to a 2 percent decrease citywide.

But, as de Blasio officials and others point out, neighborhoods that were not rezoned like Bushwick also experienced rapid rent increases and demographic change above city averages. According to the Furman Center’s annual neighborhoods report, from 2005-09 to 2010-14, median rents in Williamsburg increased by 21.3 percent and the Latino population fell by 12 percent, where as in Bushwick median rents increased by 20.2 percent and the Latino population fell by 9 percent—nearly identical rates. Some, however, say that it’s an unfair comparison because of Bushwick’s proximity to Williamsburg, and the possibility that the neighborhood’s gentrification may have also been influenced by the Williamsburg rezoning.

While Goldberg notes that the neighborhoods selected by Bloomberg for an upzoning tended to have similar demographic trends as the rest of the city prior to the rezonings, he says there’s no way to tell to what extent these neighborhoods were already on the brink of change, and to what extent an upzoning or hybrid rezoning exacerbated displacement, if at all.

Amanda Burden, the director of the Department of City Planning (DCP) under Bloomberg, declined a request for comment.

How similar is de Blasio’s rezoning strategy to Bloomberg’s?

Though the de Blasio administration doesn’t believe there’s sufficient evidence that Bloomberg’s rezonings caused displacement, it still fights hard to avoid comparisons.

In the summer of 2015, when City Limits asked Director of DCP Purnima Kapur why the Blasio administration had focused its efforts to promote density in mostly low-income communities of color, she disputed this claim, pointing out that three of DCP’s eight rezoning studies have sizeable middle and high-income populations: Staten Island’s Bay Street, Long Island City, and Gowanus. But the proposed rezonings in low-income neighborhoods have tended to be geographically larger and more densely populated, and an analysis that takes population into account suggests a continuation of the Bloomberg upzoning pattern.

Gates gathered data for each of the Census tracts that match up with de Blasio’s proposed rezoning areas (approximating for Gowanus, Long Island City and Southern Boulevard, as no official rezoning proposals have been announced). He found that in total, 85 percent of the residents in the targeted eight neighborhoods are Black or Latino, and over half of households make less than $35,000 a year. In contrast, the city is 51 percent Black or Latino and 36 percent of New Yorkers make less than $35,000 a year.

Shown Gates’ figures, DCP did not dispute that the rezonings targeted areas that were primarily poor and of color, but instead defended its choice of neighborhoods, stressing that their neighborhood plans promote livability, equitable development and affordable housing preservation in areas that have long been ignored. The agency emphasizes the variety of investments the city has made to prevent the displacement of low-income families: The administration has vastly increased funds for legal services for tenants, created new subsidy and loan programs to ensure the creation and maintenance of deeply affordable units, and says it is working more proactively to extend affordability agreements with existing landlords, enforce building codes and prosecute illegal harassment.

Morse acknowledges the administration’s efforts, but, as she is convinced that rezonings exacerbate market pressures, she is skeptical that the investments will be enough to combat the displacement caused by rezonings, given a history of shoddy enforcement of rent-regulation laws and the barriers to applying for subsidized housing.

“I would like to see these investments [in anti-displacement strategies] proven in the neighborhoods first before we move forward with these rezoning policies,” she says.

Barika Williams, deputy director at the Association for Housing and Neighborhood Development, is also concerned that without the adequate tools, a rezoning could exacerbate displacement. She says that while it’s true the de Blasio administration has invested more than many other cities in the creation of new tools to address the affordability crisis, that these tools still do not adequately address actual needs.

“If the mayor’s plan for universal pre-K had left out most low-income children, no one would be calling it a success. But that’s exactly what happens in affordable housing. Nearly one third of New York City households are too poor to qualify for the vast majority of the city’s affordable housing programs,” she says.

Williams says that in some ways the city continues to execute a housing strategy based on the much-lauded, but now dated Koch housing strategy of the 1980s: focused on trying to return investment to the city. But now NYC real estate investment is lucrative, she says, and we haven’t created sufficient tools or policies to address the present day’s primary problem of displacement.

“Much of this [rezoning] is being driven into low-income communities of color without any real understanding of whether it impacts low-income residents in a disproportionately negative way. If we as a City can’t have that honest conversation but these plans move forward, we risk undermining our low-income communities of color and immigrant communities—the essential cultural diversity that make us New York City,” she says.

Is it time for a discussion about relative risk?

The de Blasio administration refutes the suggestion that the introduction of market-rate housing could itself uproot families. This is in contrast to Portland, which concedes that public investments and land use actions can be triggers for displacement.

“Gentrification and displacement, whether the result of large infrastructure investments or the cumulative effect of smaller investments, have disrupted communities and resulted in serious questions about the motivations behind government investments in Portland,” says the Portland Plan, a document adopted by Portland’s City Council in 2012.

Under the plan, the city commissioned displacement scholar Bates to quantify the risks of displacement in each of Portland’s neighborhoods to help the city conduct future planning. According to her report, government actions—whether that’s the allocation of subsidies for housing development, changes to land use regulations, or investments in infrastructure improvements and economic development—can create different risks in different types of neighborhoods. For instance, investments in infrastructure in a deeply impoverished neighborhood is less likely to trigger displacement than investments in already gentrifying areas. Her research has lead to some hard discussions among Portlanders, with no easy answers, about which parts of the city—neighborhoods where most families have already been pushed out, or neighborhoods to which they are fleeing—should be prioritized for affordable housing subsidies.

In New York, there is of course no comprehensive, citywide approach to planning; officials contend the city is too large and complex for such an exercise. The little discussion offered is limited to descriptions of potential “secondary displacement” in the Environmental Impact Statements (EIS) for specific rezonings.

In the EIS for the 2016 East New York rezoning, DCP does concede that the creation of market-rate units could exacerbate rent pressures. Ultimately, however, the agency concludes the rezoning plan will not have a “significant impact” on displacement for several reasons, including that displacement is bound to happen with or without a rezoning. In addition, DCP argues that because development would be restricted to primary corridors in large apartment buildings, the rezoning might create a “distinct market” for housing that would not impact neighboring smaller buildings in existing residential areas (a defense also used in the 2005 Williamsburg EIS). Furthermore, DCP argues that because the market has not heated up yet, the great majority of housing will be built with subsidies.

Keeping Bates’ analysis in mind, that last point may have some merit, assuming the neighborhood heats up at the slow pace the city predicts. But how would upzonings in the hot markets of East Harlem, Inwood or Gowanus affect existing low-income tenants? That question has yet to be confronted, though perhaps it will be addressed in forthcoming EIS.

Morse, co-editor of Zoned Out!, argues that the city should invest resources in studying displacement, as it has a responsibility under HUD’s fair housing rules to determine whether its policies have racially disparate impacts. One could imagine a study, for instance, that tracks movement patterns out of a rent-stabilized buildings in a rezoning neighborhood and in a non-rezoning neighborhood. Of course, even that study would pose the problem of finding comparable neighborhoods.

Absent additional research, Morse says the city ought to place more trust in anecdotes—in the stories of residents who say rezonings have devastated their communities.