The “New” New York Proposal and What It Could Mean for Commercial Real Estate

Source: Real Estate Weekly — 

Last December, a panel of New York Ciity and State advisors led by Governor Kathy Hochul and Mayor Eric Adams published the “New” New York Panel for New York City: Making New York Work for Everyone. In what they deemed a new era of collaboration between city and state, the ambitious proposal sets forth three major goals, which are comprised of 40 detailed initiatives:

1. Reimagine New York’s Business Districts as Vibrant 24/7 Destinations
2. Make it Easier for New Yorkers to Get to Work
3. Generate Inclusive, Future-Focused Growth

This roadmap for the City’s future addresses a variety of concerns, ranging from the need for more flexible zoning in business districts, the ever-looming housing crisis, the affordability of childcare, and overall city safety and cleanliness. While this is undoubtably a pivot in the right direction, the real challenge lies in bringing these aspirations to life.

In the three years since the pandemic began, New York City has largely reopened and continues to recover to near pre-COVID levels. According to Avison Young’s data, office visitor volume in Manhattan continues towards stronger in-person visitation, reaching just over half of 2019 levels and surpassing Q3 2022 (51%).

In some submarkets such as Midtown Core, Chelsea, and Times Square, the numbers are even more positive at 67.4%, 68.2%, and 69%, respectively. However, through this process, the rigidness of the existing zoning governance has been underscored.

Many Class B/C offices sit partially or entirely vacant and current zoning laws make it challenging to convert to a residential use, particularly in and around Midtown Manhattan. The code states that any office in a zoning district that allows residential use can convert if it complies with bulk regulations.