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Housing catch-up
City of Yes will bring 80,000 new homes, but New York needs 560,000 units by 2030 to keep up with population and job growth. PAGE 11
Three projects on the rise. PAGE 13
Commentary: Addressing NYC’s housing crisis. PAGES 14-17
How City of Yes got done. PAGE 3
Family battle threatens real estate and fashion empire in SoHo
Albert Malekan accuses his younger brother of trying to steal his business
By Aaron Elstein
When the bachelor on “ e Bachelor” got down on one knee in 2012 to propose to the season’s villain, Courtney Robertson, she was wearing a black dress with elbow-length gloves designed by Alberto Makali. at same year, Jennifer Lopez co-hosted “American Idol” wearing a highneck Alberto Makali trapeze
dress with ivory beads. e publicity wave was a high-water mark for Alberto Makali founder and designer Albert Malekan, who over 25 years had turned his Garment District startup into a global brand with outposts in Madrid and Dubai. Malekan plowed his pro ts into real estate and acquired at least ve SoHo and Midtown commercial properties worth a combined
$60 million, according to city records. Tenants included Donatella Versace, Jill Stuart and the venture capital rm run by Paris Hilton’s husband.
Now it’s all at risk of coming apart thanks to an escalating brawl between him and his brother playing out in state court. Recent lings say that the
See BATTLE on Page 21
&
City is closing 25 migrant shelters as crisis ebbs.
2
GOTHAM GIG
Condo developer nds a sweet spot in the middle of the market
PAGE 23
The Alberto Makali store in the Garment District | BUCK ENNIS
City is closing 25 migrant shelters as crisis ebbs
By Nick Garber
New York City will close 25 of the emergency migrant shelters that it rapidly opened over the last two years, as the number of asylum seekers entering the city continues to decline, Mayor Eric Adams said Dec. 10.
The closures, which have already begun and will continue through February 2025, include the huge 2,000-person relief center opened last year at Floyd Bennett Field in Queens. Several hotels-turned-shelters have closed in recent weeks, such as the Voyage Hotel in Long Island City and Quality Inn JFK in Queens, although their post-shelter future is uncertain. Dormitory buildings formerly used by Hunter College and the Upper West Side’s American Musical and Dramatic Academy will also cease to be used as shelters.
Declined for 22 weeks
The number of asylum seekers in city shelters has declined for 22 straight weeks, and the current total of 54,900 is the lowest it’s been in 17 months, the mayor’s office said. The dropping numbers are a result of new border policies enacted by President Joe Biden, as well as the Adams ad-
ministration’s caps on shelter stays that began last year.
“Thanks to our smart management strategies, we’ve turned the corner, and this additional slate of shelter closures we’re announcing
(Dec. 10) is even more proof that we’re managing this crisis better than any other city in the nation,” Adams said in a statement.
In the week between Dec. 2 and Dec. 8, more than 1,600 migrants
Upper East Side hospital blows budget for new 12-story tower
By Ethan Geringer-Sameth
The hulking husk of what will one day be a 12-story hospital tower suspended over FDR Drive is coming in close to a third over budget.
The 94,000-square-foot expansion of Hospital for Special Surgery on E. 71st St. known as Kellen Tower will cost a projected $293 million when it opens to the public in early 2026, according to a recent state filing. The figure represents a $68 million increase from the $225 million price tag the hospital anticipated when it first proposed the tower in 2019.
Since then a pandemic hit the city followed by several seasons of rising construction costs.
The pandemic delayed construction by 18 months, causing the hospital to rack up expenses including on a $95 million portion of the new building that will be dedicated to medical treatment, the filing shows. That number has grown to $124 million, said spokeswoman Tracy Hickenbottom. “Hyperinflation” also boosted the cost of construction, the filing stated.
The filing states parts of the operating and capital budgets and financing mechanisms have changed since the original proposal due to the delays.
The cost of material and labor grew, as did indirect costs associ-
ated with new safety regulations and supply chain disruptions, according to Hickenbottom. In particular, the cost of steel rose 7% annually in 2021, she said.
More than 4 years
What was originally slated to be a 30 month development, is now projected to take more than 4 years when it is fully completed. The project has blocked off a stretch of the East River Esplanade in the east 70s to the chagrin of local pedestrians. The footpath will remain tied up at least through the summer of 2025, local Upper East Side newspaper Our Town reported last month after a Hospital for Special Surgery representative informed the local community board of the timeline.
The exterior of the building is expected to be completed by the end of this year with the interior being developed through 2025, according to the latest filing. The hospital has said it would help refurbish the esplanade after the tower is completed.
The new building sits on a platform over FDR Drive and will be connected to the main ambulatory building by a bridge. Three of its floors will be dedicated to single-bed patient rooms to increase the hospital’s number of private inpatient rooms, according to a previous filing with the state Health Department. Seven more floors will be reserved for physician office space and the remaining floors will house imaging services and mechanical equipment, the filing states.
The huge relief center at Floyd Bennett Field is among the planned closures.
in places like Albany and Buffalo, where New York City has been footing the bill. Adams previously announced that the large relief center on Randall’s Island will close on Feb. 28.
News of the closures comes as Adams has shifted his rhetoric on how the federal government should treat migrants in the city. In recent days, the mayor questioned whether undocumented immigrants accused of crimes were entitled to due process, and said he was considering using his executive powers to change the city’s sanctuary laws and enable more cooperation with federal authorities.
left the city’s shelter system while 500 people entered it, mayoral spokeswoman Kayla Mamelak Altus said.
The city is also closing at least 10 shelters outside of New York City,
Over 150 hotels across New York City have been shuttered and converted to shelters since the migrant crisis began in 2022, and more than 225,000 people have passed through the city. What will become of those hotels is an open question, although some in the industry say the buildings will likely revert to hotels rather than undergo residential conversions.
SL Green may acquire, redevelop Roosevelt Hotel, analyst predicts
By Aaron Elstein
SL Green’s next office tower could rise up on the site of the Roosevelt Hotel, a JPMorgan analyst predicted Dec. 10.
The Roosevelt is a shelter and migrant-intake center whose owner, the Pakistani government, has enlisted JLL to sell the building. It’s being marketed as a teardown. Located on a full block between East 45th and 46th streets and Madison and Vanderbilt avenues, the Roosevelt is close to the strong Park Avenue office corridor and Grand Central Terminal.
“It has essentially been a placeholder for a major office tower for many years,” JPMorgan analyst Anthony Paolone said in a client note Dec. 10, and “one site we
think could naturally be on [SL Green’s] radar.”
SL Green declined to comment about the Roosevelt.
But Dec. 9 CEO Marc Holliday told investors he expects to acquire a large-scale development site next year and is eager to build a new tower on the heels of his firm’s success at 1 Vanderbilt Ave.
“We’re going on offense,” Holliday said. “Every decade you get one, maybe two shots to take advantage.”
The big Roosevelt site would fit a tower that could rise even higher if a developer acquired air rights from nearby churches, just as JPMorgan did when it began developing its supertall headquarters building at 270 Park Ave.
The Hotel Merit in Hell’s Kitchen is among the 25 emergency shelters that are closing in 2025, Mayor Eric Adams said. | BUCK ENNIS
Migrants outside the Roosevelt Hotel in Midtown | BUCK ENNIS
How the City of Yes plan got done: Inside New York’s two-year housing battle
By Nick Garber
To many experts, New York’s City of Yes housing plan is modest — a set of zoning changes designed to induce gradual growth in low-rise neighborhoods. But to the people who spent two years shaping the plan and navigating its fraught politics, its passage on Dec. 5 was nothing short of a “miracle,” in the words of one City Council staffer. Crain’s spoke with 10 people closely involved in crafting the package and negotiating the last-minute compromise in the council, which produced a deal that will allow some 82,000 homes to be built over 15 years — paired with $5 billion in new spending for infrastructure and affordable housing. Despite ferocious opposition and the criminal indictment of the mayor who proposed it, New York’s most significant housing action in decades got across the finish line thanks to unlikely alliances, some political courage and unexpectedly steadfast support from Council Speaker Adrienne Adams, insiders say.
“We understood the complexity of advancing a citywide proposal,” said Dan Garodnick, director of the City Planning department, “because it had never been attempted in the city’s history.”
A blank-slate mayor
The core ideas of City of Yes — legalizing cottage apartments and small multifamily buildings in low-rise neighborhoods, scrapping parking mandates that deter housing, and permitting bigger buildings in dense
areas — did not spring fully-formed out of Mayor Eric Adams’ head before he released the plan last year.
The genesis of City of Yes, most people agree, was the 2020 Where We Live NYC plan, produced by Bill de Blasio’s administration to comply with a federal fair housing rule. The blueprint recommended changing zoning to add density and building more in low-rise neighborhoods that have contributed little housing — a sea change from recent trends, in which a handful of neighborhoods like Williamsburg, the South Bronx
and Manhattan’s West Side had been transformed by development while other areas sat untouched.
Once Adams took office in 2022, rankand-file staff at the city’s Housing and City Planning departments were fresh off completing Where We Live — and had just pushed through two difficult rezonings in SoHo and Gowanus that notably targeted white, wealthier neighborhoods that had accommodated little new development.
“You ended the [de Blasio] administration with a certain amount of momentum,”
said Annemarie Gray, executive director of the pro-development group Open New York, who served at the time as a City Hall land use staffer. “For the first time, you also had outside forces talking about those issues in a new way.”
Adams arrived as something of a blank slate on housing, although one City Planning staffer said bureaucrats latched onto Adams’ 2021 pronouncement that the city should look skeptically at “sacred cows like SoHo.” Dan Garodnick, who took office as Adams’ City Planning director in February 2022, spent his first month brainstorming with staff about “a big swing” the agency could take. Those plans evolved into three sets of zoning reforms targeting business growth, climate-friendly projects — and housing.
“We made a decision that we were going to propose something that was both extremely ambitious in the aggregate but also very respectful to individual communities,” said Garodnick, who previously represented Manhattan in the City Council. “We did not want to propose something that was too aggressive, that would just leave it to the council at a later date to chop in half.”
Still, Garodnick was inclined to go bold on some policies. Presented by his staff with a few different options for parking mandates, Garodnick chose the most aggressive: to eliminate the constraining rules citywide, rather than reducing them based on a neighborhood’s transit access, as officials were also considering. City Hall officials
Mayor Eric Adams spoke at City Hall on Dec. 5, after the council voted to approve the City of Yes housing plan. | eD reeD/mAYOrAL PHOTOGrAPHY OFFIce
Mayor Eric Adams discussed the City of Yes for Housing Opportunity plan in September 2023, alongside then-Deputy Mayor Maria Torres-Springer (left) and City Planning Director Dan Garodnick (right). | mAYOrAL
Michelin-starred restaurant in the former Trump SoHo hotel looks to take a bite of a nearby park
By C. J. Hughes
A Hudson Square hotel that is no stranger to controversy may be flirting with it again.
The Dominick, a 46-story spire at 246 Spring St. that for years was known as Trump SoHo, has asked the Department of City Planning to approve its takeover of a slice of a next-door park for a restaurant expansion, new filings show.
The 470-square-foot addition would allow the hotel’s seafood eatery, Vestry, to tack on a 10-table, 26-chair outdoor seating area, according to the application filed Dec. 5 by hotel owner and operator CIM Group.
In addition, the area could enhance “the visual interest of the plaza, thereby drawing additional users to the public space,” the application says.
But because the expansion would eat into an 8,600-squarefoot public space, which the hotel’s developers had to create in order to qualify for a 20% zoning bonus, it may not be an easy sell to neighbors.
In fact, a nearly identical proposal in 2020 was roundly slammed by Manhattan Community Board 2, which voted 42 to 0, with 1 abstention, that year to oppose it.
Helmsley
Although the new seating area would claim about 5% of the park, Hudson Square’s post-industrial streetscape is “starved for open space” and so any loss would be too much, according to a letter submitted by the board to City Planning at the time. “The proposed café offers no public amenity to enhance this plaza.”
The narrow space, which extends through to Dominick Street,
Building owner says residential conversion still in cards
By Aaron Elstein
The Helmsley Building’s owner said converting part of the tower into apartments is still in the cards even as the Midtown landmark begins foreclosure proceedings.
Foreclosure “is part of the process,” said Scott Rechler, CEO of RXR Realty. “And then you finish up the process.”
Lenders including Morgan Stanley filed a foreclosure lawsuit Dec. 3 against the building that’s just 70% leased and in default on its $670 million mortgage. Rechler’s remarks to Crain’s about
on a panel with leading developers including Marty Burger, Maryanne Gilmartin, and Bill Rudin.
Rudin is developing a brand new asset. His firm has teamed up with Vornado Realty Trust to construct a new building at 350 Park Ave. with financial institution Citadel as anchor tenant.
“We’re feeling good now, definitely,” Rudin said.
All conceptual for now
Foreclosure is “part of the process. And then you finish up the process.”
Scott Rechler, CEO of RXR Realty
the foreclosure came after speaking at a New York University real estate conference that touched on the difficulties faced by older office buildings.
“Institutionally, it’s not an investable asset class unless you are a brand new asset,” Rechler said
Rechler, whose firm owns 26 million square feet of space, wants to build anew too and three years ago the city approved his plans for a 2 million square-foot tower at 175 Park Ave. He hopes to break ground next year but because he hasn’t signed up an anchor tenant, it’s all conceptual for now.
“Are you at liberty to talk about any of that?” the panel moderator asked Rechler, who said he could.
“He’s looking for a tenant,” Rudin chimed in, “of course he can talk about it.”
Most developers have struggling office buildings in their
is dotted with benches and planters spouting trees.
Officials in 2021 ultimately did approve the plan. But Vestry, which has earned a coveted Michelin star, didn’t open till 2023. And the original park permit expired this past spring, which is why CIM is back before city officials, filings show.
The City Planning Department must approve any changes to
portfolio these days, including Rudin, who owns 32 Sixth Ave., a tower that’s nearly 40% vacant. Some older towers that can’t be readily converted into apartments “will eventually get torn down,” Rudin said.
That fate won’t befall the Helmsley, which is protected by its landmark status. Conversion to residential seems likely but won’t come cheap and lenders might prefer another developer handle the project. One possibility would be SL Green, which is converting 750 Third Ave. and is special servicer for the Helmsley.
In his remarks from the conference stage, Rechler noted that at certain properties the economics simply don’t work anymore.
“Our view is things aren’t coming back. And so we’re not going to put good money after bad,” he said. “Any solution can’t be just kick the can down the road. This new normal is here to stay.”
publicly owned private spaces, or POPS, which prevail in Manhattan’s business districts.
Magnet for criticism
Even before Bayrock Group, Tamir Sapir and the Trump Organization co-developed the hotel in 2010, the 391unit tower, which takes up the entire block between Spring and Dominick streets, along Varick Street, was a magnet for criticism.
Opponents initially blasted Trump SoHo’s strategy to sell its rooms as “condo hotel” units that could be used only part of the year as a brazen effort to skirt zoning laws that banned housing in a manufacturing district, as Hudson Square was at the time.
Buyers of some of those units later sued the developers for puffing up sales figures to put a favorable spin on a lackluster project, which forced Trump Organization, the hotel’s operator, and landlords Bayock and Sapir to return nearly $3 million in
sales deposits.
Then in 2014, Bayock and Sapir defaulted on the CIM-issued mortgage backed by the hotel and eventually lost the property to foreclosure, paving the way for Trump Organization and CIM to take the reins.
But after Donald Trump was elected president in 2016, a boycott of some of his properties by people against his policies also created headaches. Restaurant Spring & Varick, which opened at Trump SoHo in 2017, closed just a year later after business slumped. As with other Trump-branded properties, the hotel lost its original name in 2018 and got a rebrand as the Dominick.
CIM has reportedly tried to market the hotel for sale twice, once in 2014, after it took possession, and again in 2022, though in 2023 the Los Angeles-based company refinanced its debt at 246 Spring in an $83 million deal.
Jeff Mulligan, the development specialist with the law firm Kramer Levin handling CIM’s application, declined to comment, and a spokesman for CIM did not return an email. The owners of Vestry could not be reached by press time, and an email sent to Board 2 was not returned.
Calvin Klein opening SoHo flagship store
By Eddie Small
Fashion brand Calvin Klein is heading to SoHo for a new flagship store.
The company plans to open an outpost at luxury developer Michael Shvo’s 530 Broadway by the end of next year, according to a Shvo spokeswoman and a transcript of Calvin Klein parent company PVH Corp.’s latest earnings call. The store will span about 7,300 square feet.
PVH CEO Stefan Larsson referred to SoHo as “one of the best brand-building and foot-traffic locations in the world” on the earnings call for the third quarter of 2024 and said the company would share more details about the store in the coming months, according to the transcript.
A partnership led by Shvo closed on 530 Broadway for $382 million in March 2020, just a few days before the pandemic completely upended life in the city. The partnership included Deutsche Finance, German pension fund BVK and Turkish developer Bilgili Holding, but Bilgili is no longer an owner, according to a Shvo spokeswoman.
The firms bought the building from Jeff Sutton’s Wharton Properties and Joe Sitt’s Thor Equities, which had spent years considering a sale of the property before
pulling the trigger.
The building dates back to 1898 but was renovated in 2023, according to commercial real estate database CoStar. It stands 11 stories tall and spans 198,000 square feet with office and retail space, CoStar says.
Revenue at PVH, which also owns the Tommy Hilfiger fashion brand, decreased year over year during the third quarter of 2024 by 5%, dropping to about $2.3 billion, according to the company’s latest earnings report. Revenue for Calvin Klein dropped 3% year over year, to about $994 million, and revenue for Calvin Klein North America dropped 9% year over year, to about $342 million. Revenue from PVH’s stores, however, was up about 1% year over year, at $760 million, according to the report.
The city’s retail sector was struggling even before the pandemic hit, and Covid initially only made those struggles worse. However, the sector has more recently enjoyed a remarkable recovery. The amount of available space fell to its lowest level on record during the third quarter of 2024, and in SoHo specifically, the average ground-floor asking rent rose to $301 per square foot, and the availability rate fell to 11.5%, according to data from JLL.
RXR Realty CEO Scott Rechler BUCK ENNIS
246 Spring St., Hudson Square | BUCK ENNIS
New bus lanes have slowed to a crawl under Adams admin
By Caroline Spivack
Mayor Eric Adams’ administration is expected to end 2024 having painted the fewest miles of new bus lanes in all three years of the mayor’s tenure. e progress made is nowhere near the 30 miles the city must roll out annually to comply with the Streets Master Plan law. O cials with the Department of Transportation celebrated painting just two miles of road with bus lanes on 96th Street on the Upper West Side earlier this month. e e ort is among few projects for new priority bus lanes to improve tra c ow and speed up service to come to fruition this year (the city’s buses are the slowest in the U.S.). With new lanes also painted on Second Avenue and Pike Street on Manhattan's east side, the three projects will bring the tally of newly created lanes to just over ve miles for the entire year.
Streets Master Plan
e 30-mile milestone comes from the Streets Master Plan, which became law in 2019 and requires 150 miles of dedicated bus lanes in ve years. DOT has struggled to meet the mandates, creating 15.7 miles of newly-created bus lanes in 2023 and 11.9 miles in
2022. e Adams administration has bowed to pressure from concerned local businesses and scaled back or outright canceled street safety upgrades.
“It comes down to political will,” said Ti any-Ann Taylor, vice president of transportation at the Regional Plan Association, who formerly worked in the Department of Transportation and the Economic Development Corp. under the de Blasio administration.
“We have to share the road and make sure that it's not just all about me, me, me and my commute,” said
during a spring City Council hearing that the agency could likely do more if it got the green light from the mayor to implement projects despite staunch opposition. Such was the case for the 96th Street bus lane, which faced opposition from some residents and City Council member Gale Brewer who argued that the redesign would create more congestion and cause headaches for drivers. e Adams administration has often shown resistance to go against city lawmakers and concerned businesses and residents.
Projects planned for 2025
Taylor. “It's about the ‘we,’ right? How can we make sure folks who are using other modes of transportation can also get around?” Taylor added that bus lanes also complement other tra c investments, like street changes that better serve delivery vehicles and tra c reductions anticipated with the Jan. 5 launch of congestion pricing.
ough some business leaders believe that bus lanes spell sacriced parking spots for potential customers, Taylor noted that the lanes tend to create greater opportunity for local businesses by mak-
ing it easier for would-be shoppers who use mass transit to get to stores.
During a Dec. 3 news conference, DOT Commissioner Ydanis Rodriguez said that planned expansions to help the agency meet the Streets Master Plan's requirements were foiled by community squabbles. For instance, after complaints from area businesses, the Adams administration axed plans for a busway on Fordham Road near the Belmont neighborhood in the Bronx.
Margaret Forgione, DOT’s rst deputy commissioner, conceded
TREATING “UNTREATABLE” HEARTS ACROSS 65+ LOCATIONS AND 8 COUNTIES
Danny Pearlstein, the director of policy and communications at the Riders Alliance, an organization that advocates for bus and subway riders, said the city must not falter on a handful of bus lane projects planned for 2025, including a busway on 34th Street in Manhattan, bus lanes on Flatbush Avenue in Brooklyn and a busway along the Bronx’s Tremont Avenue, if o cials want to gain trust with the city’s bus users. “ e loudest voices advance the status quo and they do it often on false premises,” said Pearlstein. “At the end of the day, all bus riders want is for the mayor to live up to his promise to get stu done.”
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A city bus traveling on a Manhattan street | BUCK ENNIS
Adams’ flirtation with the Republican Party makes political sense for a second term
In
recent days, when pressed, the mayor has not ruled out a switch instead of facing crowded
Will Mayor Eric Adams seek re-election as a Republican?
In recent days, when pressed, Adams has not ruled out a party switch. ough he’s spent his entire career in elected o ce as a Democrat and once declared himself the “Biden of Brooklyn,” there’s logic to Adams’ new irtation with the GOP. Indicted on federal corruption charges in September, Adams seems to be actively courting President-elect Donald Trump in the hopes that he’s eventually pardoned. His complaints about the Biden Justice Department that indicted him have echoed Trump’s own.
tion, Adams needs to nd a way to build a coalition that can help him reach 50% of the vote. Rankedchoice voting rewards the contenders who are less polarizing and show up on a wide swath of ballots.
Beyond staying out of prison, Adams may want to keep his options open for another reason: Winning the Democratic primary next year is going to be extremely tough for him. He is deeply unpopular citywide and is facing down a crowded eld of Democrats in a ranked-choice voting primary. Whereas a split eld, under the old system, may have saved a beleaguered incumbent with universal name recogni-
Adams, at this point, seems likely to be left o many ballots, especially with a corruption trial set for April, in the heat of the primary. Adams wouldn’t necessarily be an awkward t in the GOP. He was a registered Republican in the 1990s. He has complained, of late, that Democrats, especially progressives, are too soft on crime. He spent much of his term railing against the Biden administration’s immigration policies.
Some Republicans, certainly, would welcome him with open arms if he decided to defect. It’s not di cult to imagine a post-City Hall career as a Fox News pundit. e network loves ex-Democrats and political apostates. Tulsi Gabbard and Robert F. Kennedy Jr., once Democrats in good standing, are now very popular with the Trump base.
None of this means Adams can
win next year as a Republican. For one, he’d actually have to compete in a Republican primary and win it against actual Republicans. Curtis Sliwa, the Republican mayoral nominee in 2021, could run again, as well as several others contenders.
30% of the vote
Even if Adams won that GOP primary, he’d have to triumph in a general election against a Democrat. Yes, New York City has reddened in the 2020s, and Trump had the best showing of any presidential candidate here since 1988. But that still amounted to 30% of the vote, and no candidate has won citywide on the Republican line since 2009. at Republican, Michael Bloomberg, had e ectively left the party, and also spent $100 million to win his third term. Adams does not have that money to spend. And there probably won’t be many super PACs that are going to be propping up such a scandal-scarred candidate.
Adams could, theoretically, run as a third party candidate and win that way. In 1969, John Lindsay won re-election on the Liberal Party line. A liberal Republican, he had lost the primary to a conser-
Council sues mayor over solitary con nement ban he blocked
By Nick Garber
e City Council is suing Mayor Eric Adams to force him to implement a law banning solitary connement in city jails, months after he issued executive orders blocking it from taking e ect. e lawsuit, led in Manhattan state court Dec. 9 by the council and Public Advocate Jumaane
selves for longer than four hours, and put other restrictions on the use of restraints like shackles.
“ e democratic process of lawmaking cannot justi ably be declared a state of emergency, and Mayor Adams’ emergency orders are an unlawful and unprecedented abuse of power,” Council Speaker Adrienne Adams said in a statement Dec. 9. e suit comes just days after the speaker and her colleagues handed the mayor a victory by approving the City of Yes housing plan, although the speaker notably avoided publicly thanking or mentioning the mayor.
The mayor’s executive orders were supposed to be “a temporary pause,” but his administration has continued to extend the emergency declaration every 30 days since July.
Williams, argues that Adams improperly used his emergency powers when he issued the executive orders in July, just one day before the law was supposed to take e ect. First passed by the council in December 2023, the policy would prohibit jail sta from holding a person in a cell by them-
Led by Speaker Adams, the council is now waging two legal battles against the mayor. e body is also suing Mayor Adams over his refusal to implement laws that expand a costly housing voucher program; a judge sided with the mayor in August, but the council has led an appeal.
Mayor Adams vetoed the solitary bill in January, siding with correction o cers’ unions who argued it would jeopardize the safety of jail sta and detainees. e mayor has maintained that solitary con ne-
ment does not exist in city jails, pointing to a 2019 state law that already sought to ban it.
But the council voted weeks later to override Adams’ veto of the solitary bill, along with another bill he vetoed that requires police to disclose more low-level stops. Supporters of the solitary ban have said the practice still exists — a 2023 report by the Columbia University Center for Justice found that hundreds of inmates are stuck in what amounts to be solitary con nement on a given day — often for as many as 23 or 24 hours — between punitive segregation, emergency lockdowns and so-called “de-escalation con nement.”
A mayoral spokeswoman on Dec. 9 repeated Adams’ contention that solitary con nement is already banned in city jails, but said the administration would review the lawsuit.
“To continue to protect public health and safety in Department of Correction jails, the mayor issued a narrowly-tailored executive order focused on reducing violence in our jails,” spokeswoman Amaris Cock eld said.
As of September 2022, there were 117 people in solitary con-
eld of Democrats
vative, John Marchi, and entered the general election against both Marchi and the Democratic nominee Mario Procaccino. Lindsay, though, had several advantages Adams lacks. ough he was increasingly unpopular in a city with rising crime and signicant economic challenges, he had been a national political star who retained some goodwill with both white liberals and Black voters. Marchi and Procaccino were outwardly conservative, with the
Democrat, in an in ammatory matter, trying to court the white working class.
Adams, as an independent, could hope the Democratic and Republican nominees beat up on each other, allowing him to sneak through to a second term. It’s highly unlikely this happens, but given his weakened standing in the Democratic primary, he may not have much else to fall back on. Ross Barkan is a journalist and author in New York City.
nement across the city’s jail system, then-Correction Commissioner Louis Molina testi ed at a City Council hearing.
e council’s lawsuit says Mayor Adams abused his authority on July 27, when he declared a state of emergency in city jails and used it to issue the two emergency orders blocking the law — which he wrote would “pose a direct threat to the safety of incarcerated individuals and sta .”
Previously, the Adams administration had signaled it might ask a federal judge overseeing conditions at the Rikers Island jail complex to block the law from taking e ect, since a court-appointed monitor had found the law might
jeopardize safety at Rikers. But the city never made that motion with the federal judge, and the council now argues that Adams unlawfully “took matters into his own hands.”
Mayor Adams described his executive orders as “a temporary pause” shortly after he issued them in July, but his administration has continued to extend the emergency declaration every 30 days since then.
“We just want the judge to have time to analyze the law and decide the proper way to implement it without bringing harm to the inmates and bringing harm to the correction o cers and civilians who are assigned,” the mayor said in July.
Ross Barkan
Mayor Eric Adams delivers remarks at the Police Association League holiday party on Dec. 7 in Harlem. ED REED/MAYORAL PHOTOGRAPHY OFFICE
City Council members and advocates rallied in 2022 to support ending solitary con nement in city jails. The council is now suing Mayor Adams over his refusal to implement new restrictions on jail practices. | NYC COUNCIL MEDIA UNIT
City of Yes is big accomplishment — but only first step to stem housing crisis
New York City’s political leaders should be applauded for nally getting o the bench in a meaningful way to address our worsening housing crisis. e common-sense reforms in the City of Yes plan, though somewhat watered down by suburban-minded interests on the Council, are expected to spur housing development across the city to the tune of an estimated 80,000 units over the next 15 years.
But as Jets fans can attest, breaking a losing streak doesn’t mean you’re headed to the Super Bowl. New York’s a ordable housing crisis has been decades in the making and will require meaningful change on multiple tracks to remedy.
e new units expected from City of Yes, NYC’s biggest zoning overhaul since the 1960s, represent a drop in the bucket of the 560,000 housing units needed by 2030 to keep up with population and job growth, REBNY estimates. e vacancy rate for rentals stands at 1.4%, the lowest the city has seen in decades, with the median rent an eye-watering $3,400.
In many ways New York is playing
PERSONAL VIEW
catch-up to cities around the nation that have already implemented similar zoning changes like increasing housing density near transit hubs, eliminating o -street parking mandates and relaxing rules around accessory dwelling units, as Valerie Block reports this week in our Crossroads package on a ordable housing on Page 11. e upshot is reforms similar to City of Yes are working in other cities from Minneapolis to Austin to New Rochelle. It’s a great start, but a lot more must be done. Among other state and local moves showing promise: New incentives to boost o ce conversions, a 421-a replacement, and the use of public properties for new housing including most recently an NYPD parking lot in the
East Village.
To his credit, Mayor Eric Adams quickly followed the passage of City of Yes with a new push to rewrite the City Charter to boost housing, forming a commission composed of respected business leaders
Don’t kill DEI, evolve it: A path forward for inclusion to achieve shared success
The debate over diversity, equity, and inclusion has reached a boiling point. Companies like Microsoft, Harley-Davidson and, most recently, Walmart have dismantled their DEI o ces, and universities are following suit. Now, the Dismantle DEI Act of 2024 seeks to end federal DEI initiatives altogether. Elon Musk’s bold declaration that “DEI must DIE” re ects a widespread sentiment: DEI as we know it has failed. at frustration isn’t misplaced. DEI initiatives too often alienated employees — particularly white leaders — by relying on accusatory frameworks instead of building bridges across di erences. ey emphasized optics over outcomes, fostering resentment rather than collaboration. In doing so, DEI often eroded trust in the very principles it sought to uphold: fairness and merit. e Dismantle DEI Act is a reaction to these failures, but its current form risks creating a void where inclusion once stood. Without a better plan, we will lose not only the progress we’ve achieved but also the innovation and collaboration that diversity cultivates. New York City, one of the most diverse
D. Ireland is the founder and CEO of the consulting rm Belong
cities in the world, re ects both the promise of DEI and its shortcomings. Consider the advertising industry in New York, where a recent study revealed that people of color remain signi cantly underrepresented despite decades of diversity pledges. is lack of representation highlights why DEI e orts must evolve. Meanwhile, e New York Times reportedly declined to publish a study showing that certain DEI training programs can foster hostile environments, fearing internal backlash. is incident underscores the challenges of navigating DEI initiatives in a way that fosters trust and unity rather than division. Yet, some New York-based companies demonstrate how DEI, when done thoughtfully, can work. Datadog, a Manhattan-based software company, integrates DEI into every aspect of its operations. Its leaders emphasize small, actionable steps to foster inclusion, ensuring DEI isn’t conned to an HR checklist but embedded in the company’s culture. Similarly, Capital One, with a signi cant presence in New York, actively supports mentorship programs for diverse women leaders in tech, showing how inclusion can directly em-
power underrepresented groups while bene ting the broader organization. ese examples show what’s possible when DEI focuses on building bridges rather than drawing lines. Here’s how we can move forward.
First, DEI training must become voluntary, engaging and free of blame. My post-doctoral research at the University of Cambridge focused on how to make diversity training enjoyable and empowering for white leaders, who often hold the keys to organizational transformation. E ective training programs avoid accusation and focus on self-re ection, shared stories and authentic dialogue. For example, I studied a diversity session where a Latino man shared his experience with police brutality in raw, honest terms. His vulnerability softened the resistance of colleagues who had entered the room defensive and disengaged.
Second, DEI must focus on outcomes, not optics. Too often, programs prioritized surface-level metrics, like diversity headcounts, while neglecting deeper issues such as workplace culture and team performance, which undermined trust in DEI’s ability to reward merit and skill. Inclusion initiatives must prove their worth through measurable outcomes, such as improvements in employee retention, in-
and former City Planning directors. e group could target changes to the Uniform Land-Use Review Procedure, the city’s tedious seven-month review process for zoning changes. Naturally, council members who enjoy considerable power over new developments in their districts are sco ng at the move. ey too must accept that the status quo isn’t working.
“New York City hasn’t produced 50,000 new units in a year since 1964. And it took a lot of e ort to get to today’s average of 25,000+ units a year,” observed Ted Houghton in an op-ed that’s part of our Crossroads package. In other columns, New Rochelle Mayor Yadira Ramos-Herbert says that cutting red tape and speeding up approvals for developers is critical. e city must also invest in maintaining and improving NYCHA units, Simon Bacchus adds.
City of Yes is a big step forward and has the potential to kick o a winning streak for NYC — adding thousands of units that are a win-win for the economy and local businesses. But it can’t be the only playbook.
novation and collaboration — or be restructured to achieve those goals. One promising approach is Cultural Portfolio Management, a framework that integrates diversity into broader organizational objectives by tying inclusion e orts to measurable performance metrics. ird, we need to move beyond DEI’s divisive rhetoric to embrace cultural intelligence. Cultural intelligence equips leaders with the skills to navigate cultural differences effectively, emphasizing empathy, adaptability and collaboration. Unlike traditional DEI frameworks, which often rely on rigid narratives of privilege and oppression, cultural intelligence focuses on shared goals, mutual respect and actionable strategies for teamwork. It shifts the conversation from division to unity.
e Dismantle DEI Act is a wake-up call. DEI doesn’t need to die — it needs to grow up. By amending the Dismantle DEI Act, we can secure a future where inclusion is not just a buzzword but a cornerstone of our shared success. e time to act is now.
The City of Yes housing plan is a signi cant accomplishment, but city and state leaders cannot stop now on pushing for more housing. ED REED/MAYORAL
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David
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NYU Langone Health has critical impact on our communities as top quality, safety ranking shows
THE RECENT ARTICLE about NYU Langone's financial performance and charity care seriously mischaracterizes our commitment to accessible health care. Strong financial performance enables us to deliver superior care efficiently and to the extraordinary benefit of our patients, regardless of their socio-economic status. The critical impact NYU Langone Health has had on the communities we serve is evidenced by our top quality and safety ranking nationally.
enrollment. Our $2.1 billion in underfunded governmental payor care speaks to our helping patients receive greater coverage, not limited access.
The article's very narrow focus on direct charity care overlooks crucial context: New York leads the nation in Medicaid spending per capita, with comprehensive benefits and high enrollment. This robust program, covering 25% of our patients, means fewer people need direct charity care because more have coverage. NYU Langone remains an industry leader in Medicaid
Elizabeth Golden is the executive vice president for communications, marketing, government and community affairs at NYU Langone.
The article also bases its claims on a KFF report that cites an average 2.6% of total operating expenses that nonprofit hospitals spent on charity care in 2020. The article fails to point out, however, that this COVID year was a complete anomaly, with many organizations likely including pandemic-related expenses in their charity care numbers (based on observed increases from 2019 and 2021), even as NYU Langone did not.
Finally, and perhaps most importantly, NYU Langone is one of the most efficient institutions anywhere, with 30% less administrative costs than our peers as a fully integrated health system. This is evidenced by our length of stay and cost-adjusted discharge rates,
which are much lower than our peers locally and nationally. These factors not only make us profitable, they allow us to have a greater impact across all of the communities that we serve. This includes NYU Langone Hospital—Brooklyn, where we have invested more than $1.7 billion and continue to substantially improve access to safe, quality care and a range of
specialty services in a borough with one of the highest proportions of Medicaid recipients in the nation. Our investment there in fact saved the state up to $150 million annually in support for the former Lutheran hospital.
Suggesting NYU Langone is not doing its share to support our communities is not just incorrect, it’s irresponsible.
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There’s a reason why New York City is losing residents under 40, is losing families... And that reason, I think, first and foremost, is affordability, and housing affordability in particular.”
Eli Dvorkin, Center for an Urban Future
New York’s housing reforms paid off for other cities
By Valerie Block
Minneapolis did it years ago. So did New Rochelle, Austin and Charlotte. Now New York has finally approved zoning changes to boost its short supply of housing. Evidence from other cities shows that the changes can move the needle.
City of Yes for Housing Opportunity, Mayor Eric Adams’ signature plan to help ease New York’s critical housing shortage passed the City Council on Dec. 5. The new rules are expected to reduce barriers to housing growth, adding an estimated 80,000 units over the next 15 years, according to city officials. The need is dire. The vacancy rate for rentals stands at 1.4%, the lowest the city has seen in decades, with the median rent at $3,400.
However, while City of Yes is a good step, New York will need to build 560,000 housing units by 2030 to keep up with its expected population and job growth, according to a 2022 report from the Real Estate Board of New York.
The city is not even close to reaching that goal. Still, the City of Yes plan represents the biggest change to New York’s zoning law since the 1960s.
“It’s a huge win for New York City when you can forecast that there will be at least 80,000 new units of housing created over a 10- to 15-year period, and that we’ll be able to build in many more places and increase the supply of housing in general,” said New York City Department of Housing Preservation and
Development Commissioner Adolfo Carrión Jr. He notes that for affordable housing, the real vacancy rate is about zero. “If you increase supply, prices will get pinched, and that’s good for the consumer.”
New York is in many ways playing catch-up to cities around the nation that have already implemented similar zoning changes like increasing housing density near transit hubs, eliminating offstreet parking mandates and relaxing rules around accessory dwelling units, aka backyard and basement apartment rentals.
Minneapolis is one city that used zoning changes to increase housing units and stabilize rents. In 2020, Minneapolis creat-
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ed a comprehensive Minneapolis 2040 Plan, and then enacted zoning reforms that, among other measures, eliminated parking mandates, created density minimums near public transit stations and eliminated single-family zoning citywide. It also increased investment in affordable housing projects, both public and private.
“We were the first city in the country to wholesale eliminate single-family zoning,” said Minneapolis’ Planning Director, Meg McMahan. “No one was talking about this 10 years ago. The crisis hadn’t become such a household topic til more recently.”
From 2017 to 2022, the city with about 425,000 residents increased its housing stock by 12% while rents grew by just 1%, according to a report from the Pew Chari-
The Willets Point construction site is home of the largest 100% affordable housing project to be built in the city in 40 years. bUcK eNNIS
| AFFORDABLE HOUSING
HOUSING
From Page 11
table Trusts.
“I think [Minneapolis has] moved the needle, because this is a collaborative city. And I’m not saying New York is not collaborative, but the structure there is so different, it makes collaboration harder. It’s just really more political,” said Greg Russ, a principal at Pine Street Partners in Minneapolis. Russ is a former CEO of Minneapolis Public Housing Authority and more recently CEO and board chair of New York City Housing Authority.
Strategic blueprints lead to more homes
Creating a blueprint that creates a strategy for growth over decades is a critical piece of the puzzle that many cities have adopted successfully. Austin, Texas, approved a strategic housing blueprint in 2017 to create 60,000 units of affordable housing over 10 years. And Charlotte, N.C., launched a community-based Comprehensive 2040 plan to manage growth in that fast-growing city.
Closer to home, New Rochelle adopted a strategic blueprint in 2015 and used it to jump-start a dramatic revitalization.
New Rochelle had fallen on hard times, with a downtown marred by urban blight. Seven city-owned parking lots stood empty, as retail evaporated, and buildings fell into disrepair. To spur renewal, city leadership in 2015 launched a comprehensive plan to rebuild, getting buy-in from the community, the city council and developers. Approvals for most projects from apartment buildings to retail were shortened from months or years to just 90 days as long as they adhered to a generic environmental impact statement. Zoning changes just like the ones New York City adopted this month helped entice developers to pour millions into new high-rise apartment buildings and retail.
“It really just unlocked the potential of the private sector to sort of transform a space,” said Adam Salgado, New Rochelle’s Development Commissioner. “And given the certainty that was inherent in the downtown overlay zone and the
CONSISTENT GROWTH
framework that was communicated through the generic environmental impact statement, it allowed private property owners to really reimagine their spaces and unlock the pure value that was inherent.”
Since 2015, the city with about 85,000 residents has approved 11,000 units in the downtown area, which are in varying stages of development. At least 20% of them are considered affordable at varying income levels.
Salgado said it was essential to confer with the community before any development took place.
“We spent a tremendous amount of time engaging the public and collecting community feedback … and themes like affordable housing came very forward. There was a need for dynamic streetscapes, more open space downtown. There was a cry for cultural uses, so one of the first things that we were able to achieve in our partnership with [developer] RXR was
the creation of a black box theater,” which is expected to open later this year, he said.
Of course, in New York the need is exponentially greater, space is at a much higher premium, the regulations are daunting, and financing is far more complicated.
“The need is overwhelming,” Carrión admits.
New York’s affordable housing crisis has been decades in the making and will likely take decades to fix even as the reforms in City of Yes give developers and homeowners more flexibility. Many experts agree that the city needs to develop half a million homes in the next decade to ease the backlog. “It’s a crisis that’s been a long time in building,” said Sarah Gerecke, principal at Bronx-based SSG Community Solutions and an urban planning expert. “That’s a problem with the real estate market not being able to produce housing at a cost that people can afford. It’s a problem of regulation where affordable housing isn’t preserved, and it’s a crisis of demand,
where you just literally have more people living here who want to live here than can afford the cost of housing to live here.”
Housing affects economic growth
Many experts consider the affordable housing shortage one of the top economic issues facing New York, driving workers and families out of town.
“New York City’s greatest economic challenge, arguably, is its affordable housing crisis,” said Eli Dvorkin, editorial and policy director at the Center for an Urban Future, a New York-based think tank. “There’s a reason why New York City is losing residents under 40, is losing families — in particular, working and middle-class Black families from neighborhoods like central Brooklyn. And that reason, I think, first and foremost, is affordability, and housing affordability in particular.
“At the same time, housing affordability poses a real challenge to businesses that are looking to grow here,” he added, “that are looking to attract people to work in their companies here. Getting significantly more housing built is probably the most important thing the city can do to strengthen its economic future.”
Carrión said the city has been laser-focused. You want blueprints, we have them, he says. Each mayoral administration launches one. Mayor Michael Bloomberg had PlaNYC, which Mayor Bill de Blasio adopted. Mayor Eric Adams launched Housing our Neighbors at the beginning of his administration. In 2022, he launched Rebuild, Renew, Reinvent: A Blueprint for New York City’s Economic and “Get Stuff Built”, a plan to build 500,000 housing units over 10 years. Add City of Yes to the pile. To be fair, New York has consistently added to its housing stock every year since 2010, with 2022 seeing a massive bump as developers rushed to lock in an expiring tax break known as 421-a.
Through its New York City Housing Authority, the city controls 177,569 low-income housing units in hundreds of buildings. It has implemented tax breaks to incentivize affordable development, invests billions in public-private partnerships and receives billions in state and federal funding.
The programs have not been enough to
New York City Department of Housing Preservation and Development Commissioner Adolfo Carrión Jr. | BUCK ENNIS
meet the demand. With the City of Yes, Carrión says, New York may be able to finally get ahead of the problem as the zoning changes spur more development from the private sector.
“The hope is that [City of Yes] will unleash a lot of development,” he said.
One measure, the universal affordability preference, will allow developers to add 20% more units if the additional homes are designated affordable.
City of Yes will make it easier to convert office buildings to housing, which will be a boon to commercial landlords suffering high vacancy rates post-pandemic. City of Yes will legalize conversions for buildings erected through 1990 (the prior cutoff was 1961) and expand eligibility to anywhere in the city that residential uses are allowed.
Another zoning change will make it easier for churches or campuses to develop housing on adjacent space now dedicated to parking lots, creating income streams and improving the communities they serve.
In a big win, the zoning reforms include a $5 billion investment – $4 billion from the city and $1 billion from the state — which will be used for a housing-related capital fund as well as infrastructure improvements, open space development and flood monitoring. In total, Mayor Eric Adams has earmarked $26 billion for housing over a 10-year period.
But the final plan did not give City Hall everything it wanted. Minimum parking requirements have been eliminated in certain areas, but not in some of the more suburban districts after council members objected in Queens and Staten Island. Accessory dwelling units and transit-hub density policies were also watered down.
But as they say, Rome wasn’t built in a day. Take it from Minneapolis’ McMahan. She notes that lawsuits have slowed the process in Minneapolis and other cities that are trying to modernize zoning rules. “It’s a Yimby versus Nimby fight from folks who like low-density neighborhoods,” she said. “Changes are perceived as threats to our American way of life. It’s emotional for people. You can expand later when people realize the sky didn’t fall if you allow duplexes.”
AFFORDABLE HOUSING |
Three affordable housing projects are on the rise
NEW RULES
Here are some of the zoning reforms in mayor eric Adams’ city of Yes plan approved by the city council in December:
ENACT ZONING CHANGES such as allowing low-rise apartment buildings near transit hubs in certain areas, but not in single-family districts.
EASE RESTRICTIONS that limit building size if developers include apartments for lower- or moderate-income residents.
END NEW HOUSING PARKING mandates in certain neighborhoods.
ALLOW backyard cottage and basement apartment units in certain neighborhoods.
COVER CAPITAL EXPENSES over the next five years for sewers, flood protection, streets and “open space” investments.
ADD MORE TENANT PROTECTIONS and flood monitoring.
DEDICATE MONEY to housing-related capital funds.
Source: crain’s reporting
By Valerie Block
New York City’s Department of Housing Preservation and Development has been spearheading several projects that are scheduled to be completed in the coming years.
Willets Point is the largest 100% affordable housing project to be built in the city in 40 years and will include more than 150,000 square feet of new public open space, over 20,000 square feet of retail space, a hotel and a soccer stadium. When finished, Willets Point will provide 2,500 affordable housing units.
At the site of the former JFK Hilton in Queens, Slate Property Group and RiseBoro Community Partnership will convert the one-time hotel into 318 apartments for low-income and formerly homeless New Yorkers. The partners purchased the hotel for $63 million last year with financing help from HPD.
In Hell’s Kitchen four tenements at 351357 West 45th St. that harken back to the area’s bad old days are currently under reconstruction to be converted to affordable housing. HPD recently financed the acquisition of the deteriorating tenements, which the nonprofit Services for the Underserved bought in June for $20 million. Once completed, 70 units will be reserved for homeless families, and the remaining 10 will be occupied by current residents.
massive construction project in April. The reimagining of the Queens neighborhood, once crammed with auto body shops, has been decades in the making. The first phase of the project will be completed in 2026, according to the city.
Infrastructure upgrades
“Some of our new construction projects provide infrastructure upgrades, or they may provide open space for the community,” said Kim Darga, deputy commissioner for the office of development at HPD. “The biggest project like that, that we closed in the last year, was the first phase of Willets point. You can begin to see the transformational impact that that project is going to have within that area.”
Darga pointed to the reconstruction of the former JFK Hilton, which began in 2023, as another transformational project.
“We financed that project about a year ago,” Darga said. “That kind of hotel-to-residential or adaptive reuse, those are, I think, great projects in this moment.”
It’s tough to create affordable housing in Manhattan, but the project in Hell’s Kitchen will do just that. The four tenement buildings were once owned by notorious landlord Steve Croman, who was jailed in 2017 for mortgage and tax fraud and harassing tenants.
“The fact that we can come in and support the acquisition and renovation of buildings like that, I think, is really impactful work,” Darga noted.
“We’ll get more regulatory tools, the zoning tools, budget tools,” Carrión said. “And now it’s really just time to roll up our sleeves and get to work to make this successful.”
The city’s plan, with all its exemptions, may avoid some of those lawsuits. For those in government leading the housing charge, the future is looking a little brighter.
“I’m encouraged to see what I think is a growing sense of support for more housing in New York City as an absolute imperative for the city’s future,” said Eli Dvorkin, editorial and policy director at the Center for an Urban Future, an independent, nonpartisan policy organization. “So that’s encouraging. What’s not so encouraging are the numbers today. We need to do so much better in terms of housing production than we are right now.”
HPD officials point to Willets Point as one example of how the city is making progress while also building community.
With the first phase already under construction, the City Council approved the second phase of the
Construction at Willets Point in Queens | bUcK eNNIS
A model for public-private partnerships in housing
When examining the housing crisis in New York, many rightfully focus on the need to build more housing. There is a shortage of new homes across the city, particularly homes that are truly affordable. However, addressing this housing crisis requires not only adding to our housing pipeline but also preserving our existing affordable units.
Nowhere is the need for preservation more important than in the city’s public housing portfolio. Altogether, the New York City Housing Authority provides low-income homes for 1 in 17 New Yorkers. More people live in the city’s public housing than in the entire city of Cleveland.
results and secure long-term funding. The process has changed some since its launch, but it begins with NYCHA identifying certain developments in need of repairs and then holding a resident vote on whether to enter into the PACT program. As a public-private partnership with NYCHA, vetted developers then oversee the repairs and management of the homes and community spaces.
Bacchus is the managing director of development at The Arker Companies.
After decades of disinvestment and neglect, apartments and entire communities that our fellow New Yorkers rely on have deteriorated and become unsafe. For NYCHA to address the capital needs at each of its more than 177,000 apartments across 335 developments, it would need to secure $78.3 billion.
In the face of such a seemingly insurmountable budget gap, NYCHA and its partners have needed to get creative to secure the necessary financing to repair as many homes as possible while preserving affordability and tenants’ rights. That’s where NYCHA’s Permanent Affordability Commitment Together, or PACT, came in. PACT has been a tremendous resource for public housing residents, as well as an opportunity for affordable housing developers and management teams to deliver
PACT allows nearly all residents to stay in place within their units while their homes and shared spaces receive the overdue repairs they need; residents retain the rights and protections they deserve. Based on an Obama-era HUD policy, NYCHA’s PACT program has now seen success under Democratic and Republican administrations. At its core, PACT unlocks the resources to fund capital repairs. That’s because NYCHA’s traditional public housing is financed by the federal government through a funding source known as Section 9, which has strict rules around debt that effectively make it very difficult to finance capital work. PACT transitions the funding source from Section 9 to the more flexible Section 8, which allows private development partners to access financing and pay for the capital repairs. This conversion opens up more funding and brings long-term stability to these communities, especially given the bipartisan support for funding Section 8 — which is leveraged by more than 2 million renters across the country — in Washington.
The Arker Companies have been fortunate to work alongside more than 8,000 residents who welcomed us into their communities to deliver results through PACT. In Brooklyn, we transformed 2,600 homes, providing comprehensive apartment upgrades, as well as renovated community spaces and infrastructure enhancements, while continuing to address ongoing work and maintenance orders. Our work continues in the Bronx, engaging with another 15 developments containing more than 2,800 households.
PACT strives to assist residents in realizing and manifesting their vision for what their communities can become.
When I first started meeting with tenant association leaders and residents back in 2019, I was met with skepticism and trepidation — understandably so after decades of disrepair and deteriorating living conditions. We put in as much work to create meaningful relationships and consistent lines of communication to gain the residents’ trust as we did in the physical renovations of their homes and communities.
After close to a decade of evolution, relationship-building and results, here’s what the federal government, NYCHA, residents and elected officials can agree on: PACT improves lives.
You can see the physical transformation of these communities. You can hear it talking with residents about their relationships with the new property management, the night-and-day changes to response time for needed repairs, the maintenance of the properties, and the professionalism and respect for the tenancy. You can also feel the growing sense of security and
community that a stable and comfortable home provides. All the while, residents have maintained the same rights they had under NYCHA before.
I understand certain folks’ hesitancy, particularly the residents who have heard the same broken promises for decades. However, hundreds of thousands of New Yorkers live in poor conditions today, and we can’t afford to keep them waiting for funding that is unlikely to come. These New Yorkers need life-changing improvements today. PACT can deliver it.
At a moment of uncertainty at the federal level, local leaders must take advantage of a proven tool to increase quality of life — they must double down on support for NYCHA and PACT. And NYCHA’s work with PACT should be viewed as a model —more of these public-private partnerships will be critical to keeping New Yorkers housed in safe, affordable homes for years to come.
Ways to work with the incoming federal administration
On the heels of the 2024 federal election, advocates are worried about the future of affordable housing. I won’t sugarcoat it — it is indeed worrisome.
During President-elect Donald Trump’s first term, he proposed significant cuts to federal housing funding and full elimination of some Department of Housing and Urban Development programs, along with punitive policy changes such as increased rent burdens for HUD-assisted renters. The tax reform promises he made on the 2024 campaign trail exclude the Low-Income Housing Tax Credit — the main financing tool for affordable housing — while his proposed tariffs will likely increase the already high cost of housing construction.
for more housing supply, protecting existing housing and promoting a housing safety net that includes rental assistance.
While housing can seem like an issue that divides us politically, housing affordability was a key issue for Americans on both sides of the aisle this past November, with approximately half of voters explicitly troubled by housing costs. Now that we’ve heard their concerns loud and clear, it’s time for us to address them at scale.
York Housing Conference.
But we must remember that we have experienced this before, and we came out on the other side. In fact, the New York Housing Conference was formed over 50 years ago to fight back against President Richard Nixon’s housing cuts. Later we fought back against cuts by President Ronald Reagan. And most recently we fought back against cuts during the president-elect’s first term. Each time, we remained united and successfully demonstrated how harmful cuts would be to Americans, and we looked for new opportunities to improve housing, especially at the local level. We’ll do the same this time around — fighting
At the local level, the City of Yes for Housing Opportunity and its accompanying $5 billion investment in housing and infrastructure is a major win and a strong first step in mitigating the dire affordable housing crisis we’re facing here in New York. City of Yes will make it easier to build housing in all neighborhoods, increasing our overall housing supply and adding affordable housing.
This is a clear example of how we can use local power to address our housing crisis. And we must build on this momentum.
In a city with a 1.4% rental housing vacancy rate — where 43% of New Yorkers are rent-burdened — we need an allhands-on-deck approach. Ahead of next year’s mayoral election, we look forward to bold housing plans from all candidates pushing for more affordable housing, fully restoring living conditions for New York City Housing Authority residents and
tackling homelessness.
At the state level, we urge Gov. Kathy Hochul and the Legislature to build on the housing supply wins achieved in Albany this year, most of which benefited New York City. Tax incentives, zoning and capital investment are three drivers of affordable housing creation.
New York is a large state with diverse housing needs, but housing affordability is a challenge in every county. Funding the Housing Access Voucher Program — a state rental assistance program to prevent and end homelessness — is a good start to ensuring our most vulnerable renters are not left out in the cold. As the city passed City of Yes, the state must find strategies to increase housing supply throughout New York.
Finally, at the federal level, it’s critical to preserve public housing and rental assistance to combat the national housing crisis, which is why the incoming presidential administration and Congress must maintain HUD funding. Without HUD programs, millions more Americans will become homeless, unable to afford housing.
The federal government can also play a crucial role in increasing housing supply. LIHTC — a bipartisan tool for creating affordable housing — should be expanded in the tax reform package, and the Accelerated Supply of Affordable Production Housing Act, sponsored by Congressman Ritchie Torres, is one way to do just that. ASAP would turbocharge the production and preservation of affordable housing
over the next decade by counting towards federal limits on state volume cap issuance for tax-exempt private activity bonds.
Additional federal approaches with broad support include the Affordable Housing Credit Improvement Act, which would help increase affordable housing across the nation, as well as Opportunity Zones, which should be better targeted to incentivize the development of desperately needed affordable housing.
We’re faced with a lot of uncertainty, and the reality is, the stakes couldn’t be higher. To tackle the affordable housing crisis head on, every level of government must meet the challenge at hand with the urgency it deserves.
We have made progress locally. The City of Yes for Housing Opportunity is cause for celebration. But make no mistake, if we truly want to solve this crisis, we cannot take our foot off the gas.
Rachel Fee is the executive director of the New
The City of Yes for Housing Opportunity and its accompanying $5 billion investment in housing and infrastructure is a major win, writes Rachel Fee. NYC mAYORS OFFICE/FLICKR
Simon
For NYCHA to address the capital needs at each of its more than 177,000 apartments across 335 developments, it would need to secure $78.3 billion, writes Simon Bacchus. | BUCK ENNIS
By Anthony Shorris and Ryan Luby
The housing shortage in the greater tri-state region is no secret, but too little has been done to quantify the potential consequences of the large gap between supply and demand. The Regional Plan Association, with knowledge partner McKinsey & Co., analyzed the impact of a status quo level of housing production between now and 2035: jobs forgone, lost economic opportunities, ever-higher costs for residents, more homelessness, reduced global competitiveness, and a wider gulf between the wealthy and everyone else.
The tri-state metropolitan region, which includes 31 counties in New York, New Jersey and Connecticut, is the one of the world’s economic powerhouses, its 23 million people contribute more than $2.5 trillion each year to America’s gross domestic product—nearly three percent of the entire global GDP. It’s one of the reasons more people want to live here than can be housed here. By failing to provide access to housing that’s affordable to families that are already here as well as the people seeking to move here, the region—along with the nation —could suffer economically.
If the region builds housing for
the next ten years at its status quo rate—projected to be below the rates of the last decade since interest rates are unlikely to return to their record pre-Covid lows—it could create about 30,000 new units a year. That may miss the mark needed to meet total demand —what it would take for the region to have something akin to the national rates of vacancy and overcrowding —by nearly a million apartments and houses by 2035.
Building those additional million homes would surely be costly. But not building them could be far more expensive to the tri-state area. Our economic analysis shows the regional economy could be nearly a trillion dollars smaller by 2035 than it would otherwise be without those units, with three-quarters of a million fewer jobs. And building those additional homes would keep housing costs from rising by as much as 25% above what they are today in real terms—the most painful outcome of a status quo approach— with as many as an additional 260,000 families in the region most of them low and middle income, paying more than they can afford for housing.
Since housing costs can have 15 times the impact of taxes when people compare costs of living in different
places, rent and mortgage payments can be a key factor for families pressed by high prices into making hard choices about where to live. Driving housing costs up because of inadequate supply compared to demand means more residents may seek to find other
Driving housing costs up because of inadequate supply compared to demand means more residents may seek to find other places to live, and others might not come at all.
places to live, and others might not come at all.
Of course, more families and jobs in the region would require more spending on public services such as schools, roads, and healthcare. But the additional people that more housing
would support could generate over $40 billion in new city and state income and property tax revenues to pay for those services across the region over the coming decade.
Building an additional million housing units in a decade may seem impossible, but if the region builds homes at the pace it did after World War II, it could meet all the expected demand. And if that sounds implausible, consider that if the region built at the pace it did from 1990-2000, it would close almost half the region’s housing gap, raise investment by as much as $300 billion, and potentially create $400 billion in economic growth. In addition, it could also support a third of a million more permanent jobs, and cut the number of families struggling to pay their rent by more than 350,000 compared to the status quo. Creating more housing is not just expense but an investment—for families, of course, but also for communities. Reducing the region’s housing shortage could do more than expand growth, equity, and opportunity. As a global capital, New York competes with other great metropolises for talent and investment. A housing market with inadequate supply affects the region’s position in the world: higher costs mean fewer people would come and stay here,
Standing still: The potential costs of inaction on housing for the tri-state region
Addressing the housing shortage could create three-quarters of a million jobs and nearly a trillion dollars in economic growth across the NY-NJ-CT tri-state region by 2035
fewer businesses would invest here, and the quality of life would degrade for the increasing number of costburdened households.
Addressing the tri-state region’s housing shortage can directly affect its position in the world, its competitiveness, productivity, appeal to global talent, and most of all, its storied history as a magnet for creativity, ambition, and hope.
Anthony Shorris is a Partner in McKinsey’s New York Office, where Ryan Luby is an Associate Partner.
They would like to thank their colleagues Danielle Goldman (Associate), Jimmy Tannoury (Engagement Manager), Jose Maria Quitos (Knowledge Specialist), Fiorella Correa (McKinsey Capabilities and Insights) and Andrew Shearer (McKinsey Communications) for their contributions to this article.
Faith organizations are stepping up to address crisis
New York City is in the midst of its most severe affordable housing crisis in decades. In 2023, the city’s rental vacancy rate fell to a record low of 1.41%, with a stunning 0.39% vacancy rate for units at $1,100 or below. Around half of our renters are rent burdened, or paying more than 30% of their income in rent. There are around 18,000 families with children in the city’s shelter system.
In the face of these harsh realities, and with land at a scarcity in the city, creative approaches to bringing affordable housing to communities are more important than ever. Faith organizations are stepping up to the plate.
Partners’ Faith-Based Development Initiative steps in, providing financial backing and the support required to guide faith leaders through every stage of the development process.
Acquiring land is a significant hurdle in affordable housing development. Many faith-based organizations own properties and land that could be transformed into housing, such as parking lots adjacent to their churches. As anchor institutions in their communities, faith organizations understand the affordability crisis facing their parishioners, and they want to be a part of the solution. The challenge is that these organizations often need expertise and resources to navigate the complex real estate development process. This is where Enterprise Community
vice president of programs for Enterprise Community Partners, a national nonprofit organization.
Funding support from the philanthropic sector has allowed this program to show great impact. Grants totaling nearly $3 million, including $1.5 million from Wells Fargo and $1.4 million from Trinity Church in lower Manhattan, are allowing additional faith organizations to get involved. Nationally, the initiative has created or preserved 1,800 units of affordable housing in partnership with houses of worship so far, and we anticipate that over the next five years it will support the development of over 9,600 more affordable homes, offering renewed hope to families who are facing housing instability in the face of rising rents.
As one of the nation’s most expensive and densely populated markets, New York City will benefit from these much-needed new affordable housing options. The FBDI’s success should serve as a model for other cities facing similar challenges, demonstrating the transformative power of public-private partnerships in driving meaningful change.
New York has a housing
It’s time to start treating New York’s housing emergency like an emergency. Sure, everyone’s talking about the importance of housing, and that talk has been backed up by real action lately: The city and state are financing more new affordable housing than ever before, enacting zoning reforms and permanently housing record numbers of homeless New Yorkers. These are substantial achievements worthy of celebration.
But we need to do so much more. New York’s housing crisis is an emergency that has been building to a slow boil for decades, causing immediate and long-term harm not just to the poorest among us, but to all New Yorkers. It threatens our city’s economic competitiveness and future prosperity. It is a disaster that must be treated as one.
We need to create an all-handson-deck, actionable plan that gets us to the scale of production necessary to actually solve our housing emergency.
For over three decades, Enterprise Community Partners has been at the forefront of affordable housing development. Since our New York office opened in 1987, Enterprise has committed approximately $5.6 billion to create or preserve over 82,400 affordable homes across New York state. This dedication includes a focus on undoing the impacts of systemic racism in housing policy, ensuring that all communities, especially those underserved communities, have access to the resources
emergency:
It won’t be easy. New York City hasn’t produced 50,000 new units in a year since 1964. And it took a lot of effort to get to today’s average of 25,000+ units a year: New York City built fewer than 10,000 new units annually in the 1980s and ‘90s, and even when we make considerable efforts to increase it, new housing production is extremely sensitive to market forces, like when the number of units built was almost halved for four years in the wake of the 2008 financial crisis.
Ted Houghton is a housing development consultant with 35 years’ experience working in homelessness and housing in state and city government and the nonprofit sector.
A 10-year housing plan to create the 500,000 housing units experts say we need must have production targets for both publicly financed affordable housing development and privately developed housing. We must monitor annual performance against those targets – and stick to them. We must be ready to adjust on the fly: by streamlining government agency processes, adding staff when necessary, increasing allocations of public capital and expanding tax incentives. We must also preserve the affordable housing we’ve already built, including NYCHA, or we won’t make any progress at all.
The good news is that we have the tools and capacity to expand production substantially. The city and state’s affordable housing agencies and developers are the best in the nation; with additional capital resources and staff, they can finance even more units. Market rate developers have a big role to play as well. Construction of new housing has already resumed in response to the recently passed 485-x tax abatement. It will grow even more when the City of Yes zoning reforms kick in. Expanding access to rental assistance, speeding approval processes, guaranteeing loans and making innovative pension fund investments can give developers the certainty they require to further expand production of housing.
For too long, New York’s affordable housing production has been limited by the availability of federal resources. While the City of New York has always contributed more of its own funds to create housing than other localities, these resources have traditionally been paired with larger allocations of federal capital dollars, operat-
they need to thrive. But none of this work would be possible on our own. For nonprofits like ours, the expansion of the FBDI is a powerful reminder of the importance of collaboration. By leveraging the strengths of faith-based organizations, corporate foundations, and community partners, we will make strides toward solving the affordable housing crisis. Together, we have the opportunity to contribute to a more equitable and financially accessible New York.
Treat it as one
ing funds, Low Income Housing Tax Credits and Section 8 rent subsidies. After waiting in vain for Washington to increase its contribution to meet the city’s growing affordable housing need, in recent years New York has stepped up its investment in housing, with new, locally funded rental vouchers and steadily increasing commitments of city housing capital.
New York City will spend over $2 billion on capital development of affordable housing in fiscal 2025, a massive amount unimaginable just 10 years ago. But it needs to be even larger if we are to meet the need. The state can help, with increased capital investment and the creation of a new state-funded rental voucher under the Legislature’s proposed Housing Access Voucher Program.
The city can further supplement capital spending with the Adams administration’s most innovative new financing tool, the HRA Affordable Housing Services program, financeable long-term contracts that use city-funded rent subsidies to help nonprofits access private lending.
Creating more housing is the best investment we can make in our city’s future economic success: Companies are less likely to move to or stay in New York City if their employees can’t afford a place to live, tourists won’t visit if most of our hotels must be used as shelter, and artists
and entrepreneurs will go elsewhere to make it big if the cost of living here is prohibitive. Stable, affordable housing improves health, education, employment, public safety, social wellbeing and just about every life outcome.
Housing investment is the only way to reduce the size of our $4-billion-a-year shelter system. It will reduce public hospitals’ spending on indigent care. It will make our streets safer and improve children’s chances of breaking out of generational cycles of poverty and homelessness. And it will create thousands of good-paying construction and building operations jobs, because housing offers the best economic multipliers of any investment the city can make.
Our government leaders have done more for housing in the last few years than anyone before them. But they need to think even bigger and make the commitments necessary to solve New York’s housing emergency today, to ensure our city continues to thrive for generations to come.
Baaba Halm is the senior
For over three decades, Enterprise Community Partners has been at the forefront of affordable housing development, writes Baaba Halm. | BLOOmBERG
Housing investment is the only way to reduce the size of our $4-billion-a-year shelter system, writes Ted Houghton. | BUCK ENNIS
New Rochelle said ‘yes to housing’ a decade ago. Here’s what NYC can learn from those efforts.
New York is facing a historic housing crisis that’s pushing residents out in record numbers, with nearly 36% of households considering moves out of state in search of affordable rent – more than double the rate before the pandemic. The heart of this exodus lies in New York City, where housing costs are at their peak. With a rental vacancy rate of just 1.4% — the lowest in over five decades — affordable housing is nearly impossible to find.
But New York City isn’t facing this crisis in isolation. The challenges of affordability, housing supply and equity span the entire tri-state region, tightly linking our communities economically, socially and geographically. Due to the lack of housing supply in New York City and beyond, our region is one of the least affordable and most segregated metropolitan areas in the country.
own version of City of Yes when we overhauled our existing zoning code to expedite the creation of new housing and start addressing such issues in ways that allow for regional solutions.
Unlike many other cities, which approve new zoning for buildings on a piecemeal basis, the New Rochelle City Council created a blueprint to streamline the approval process, forfeiting the power to debate each development individually. In our downtown, we also expedited the environmental review process. Developers in New Rochelle are still required to take the same steps as anywhere else, but here they can do so all at once — allowing them to bypass bureaucratic red tape that often deters new projects.
ing city in Westchester County. Over the past decade, we have welcomed approximately 6,000 newcomers.
Recent housing creation efforts also led Gov. Kathy Hochul to name New Rochelle a “Pro-Housing Community” earlier this year, enabling us to apply for programs that are part of $650 million in state funding to mitigate the statewide housing shortage. We intend to take full advantage of these dollars, using them to spur additional housing creation throughout our city.
While housing is a critical first step to building a thriving city, it’s just one piece of the puzzle.
To increase housing supply, the New York City Council recently passed the City of Yes for Housing Opportunity, which will update its outdated zoning code, allowing more housing creation in every neighborhood while preserving each neighborhood’s character and aiming to meet its unique needs.
While there’s ongoing debate about whether City of Yes will work, I’m here to tell you that it’s been done before, and it will. Nearly a decade ago, my city — the City of New Rochelle — implemented our
Whereas new housing can currently take years to be approved in New York City and other metropolitan areas, under New Rochelle’s form-based code, developers can gain approval in just 90 days. As a result, over the past decade, New Rochelle has authorized more than 10,500 rental units and 500 condos, with nearly 1,500 units of housing opened within the last 12 months. Many of these new units have been brought online through a thoughtful public-private partnership with RXR, our downtown master developer.
Our rapid housing creation has allowed New Rochelle to become the fastest grow-
In anticipation of 15,000 new residents in downtown New Rochelle over the next 10 years, we’re implementing a Downtown Retail Strategy to keep the area lively and economically robust. This includes public realm improvements, retail enhancements, tenant incentives and a fasttrack zoning process for commercial approvals — mirroring our success with housing. We’ll also waive parking requirements for new commercial developments, following the City of Yes model, which removes parking mandates for housing. By embracing smarter land use, we’re freeing up space for additional housing and
strengthening our vibrant urban core. Zoning reforms like New York City’s City of Yes for Housing Opportunity work, and New Rochelle is a living, breathing example of how these changes can transform communities.
By reforming our zoning code and eliminating bureaucratic red tape — first for housing and now for retail — we’re transforming New Rochelle into a more affordable and accessible place to live, work and raise a family, and we’re helping make the region a more diverse and welcoming place for all. But we cannot do this alone. The time is now for cities across the state, region and nation to use any and all options to create more affordable and sustainable housing. New Rochelle is proud to be a Pro-Housing Community, but to address our state’s unprecedented housing crisis and ensure that each New Yorker has an affordable place to call home, every city must aim to become one.
Yadira RamosHerbert is the mayor of New Rochelle.
The city of New Rochelle implemented its own version of City of Yes, writes Yadira Ramos-Herbert. GeTTY ImAGeS
City tax break is back for building repairs, but experts and landlords question its effectiveness
By Nick Garber
After a two-year absence, an important tax break that covers repairs for multifamily buildings will return in New York City following a vote by the City Council on Dec. 5. But some experts and landlords are raising questions about its effectiveness.
The J-51 program may help landlords comply with the major climate ordinance Local Law 97 and allow co-ops to avoid financial crises. The Dec. 5 unanimous vote by the council, overshadowed by the approval of the City of Yes housing plan, comes two years after state lawmakers allowed a previous version of J-51 to expire. The benefit incentivizes repairs and renovations by offering multifamily landlords a break on property taxes. The new version of J-51 would cover as much as 70% of the costs of renovations completed between June 2022 and July 2026 through tax abatements lasting as long as 20 years. Eligible buildings include low-cost rental apartments, co-ops and condominiums. But it’s unclear how much use the program will get. The New York Apartment Association, a landlord group, noted that the city’s Housing Preservation and Development Department still needs to release rules defining what construction costs can be covered by J-51. Previous versions of J-51 were “woefully misaligned with actual prices, meaning housing providers recouped far less than the actual cost of the upgrade,” the association said in a statement Dec. 5.
Some landlords also have a narrow window to apply. Landlords who have already completed ren-
ovations since 2022 now have four months to file for the tax break, but it’s unclear whether HPD will finalize the new rules before that deadline, the association said. And any not-yet-completed renovation must be finished before July 2026, giving landlords just 19 months to carry out projects.
Quick approval was urged
A deputy commissioner at HPD pointed to that tight timeline in May, when she urged the council to approve J-51 quickly — but it took lawmakers another six months to do so. Owners of co-op apartments, who could see relief
from rising operating costs once the program returns, had also pushed for speedy approval.
Pierina Sanchez, the Bronx councilwoman who sponsored the bill, said Dec. 5 that it would reduce costs for some 166,000 families living in co-ops and condos. It will also be key as buildings race to comply with Local Law 97 mandates before the decarbonization law starts penalizing noncompliant buildings in 2025.
“We can upgrade our housing, put money back into the pockets of everyday New Yorkers, and green our city,” she said.
After a previous version of J-51
lapsed in 2022, Gov. Kathy Hochul signed a bill last year that allowed the city to create a new program, whose terms were drawn up by state lawmakers with input from Mayor Eric Adams’ administration. Participation in the old J-51 had declined in the years before it lapsed, but city officials have called the new version an improvement, since it targets tax benefits more narrowly to buildings with low-cost housing.
Rental buildings can only benefit from the new J-51 if at least half of the units are rent-stabilized at between 20% and 80% of the area median income, if they are operated by limited-profit housing com-
The City Council approved a new version of the J-51 tax break, which may help with Local Law 97 projects.
panies, or if the building gets government subsidies through a program like Mitchell-Lama. Homeownership buildings like co-ops and condos must have an average assessed value of less than $45,000 per unit to qualify.
The city will also gain enforcement powers under the new program, with the ability to fine landlords who break the rules by harassing tenants or renting out units on Airbnb.
J-51 has cost the city an average of $270 million per year over the last 15 years, and the new program will cost a similar amount, HPD has said. Usage has historically been concentrated in the outer boroughs, especially Queens and Brooklyn. About 700,000 homes would be eligible under the new rules, of which about 70% are rental units and 30% are co-ops or condos.
Daniel M. Bernstein, a real estate attorney for Rosenberg & Estis, said in a statement that J-51’s return was “long overdue,” although its usefulness is not yet clear.
“The value to owners remains to be seen,” he said. “Without information on qualifying rents and eligible costs, it’s impossible to determine how beneficial the abatement will be for individual projects.”
Outpatient visits drive New York-Presbyterian’s revenue gains
By Amanda D’Ambrosio
New York-Presbyterian has banked on procedures in doctors’ offices and health clinics to buoy its revenues. Its latest financial report suggests the strategy is working.
The Upper East Side-based hospital system brought in $2.7 billion in operating revenue between July and September, $2.6 billion of which came from patient services, according to a recent financial statement. Hospital executives attributed rising revenues to more patients returning to its locations for care, with ambulatory surgeries and mental health clinic visits rising rapidly.
New York-Presbyterian ended the third quarter with a 4.5% operating margin and $122 million operating surplus, increasing profits by 50% from the same time last year.
A hospital spokesperson declined to comment further on the
financial statement.
New York-Presbyterian, like most city hospitals, has seen marginal increases in patient volume each year since the pandemic. Inpatient discharges, which require hospital admission, were up 2.3% from last year and outpatient visits, which do not require an overnight hospital stay, rose 5.5%.
36,000 ambulatory surgeries
Some types of outpatient services saw more drastic increases.
New York-Presbyterian performed more than 36,000 ambulatory surgeries in the third quarter, up 9% from the third quarter of 2023. Mental health clinic visits were up by 25%, exceeding 29,000 visits.
Hospital system revenues in the last decade have become increasingly reliant on outpatient procedures, which are less expensive than traditional hospital services. That’s led to a clinic development boom; there’s more new medical
outpatient construction in New York City compared to any other metropolitan region nationwide, driven by the city’s large network of academic medical centers.
Despite outpatient revenue growth, expenses continued to pressure New York-Presbyterian’s bottom line. Total expenses were $2.6 billion in the third quarter — 8% higher than last year — because of rising labor costs. The health system’s labor costs increased by 12% year-over-year in part because it hired 1,100 additional full-time employees, according to its financial statement. Still, the hospital is poised to end the year with a large profit margin. New York-Presbyterian scored a $355 million investment return to pad its non-operating gains.
New York-Presbyterian has eight hospital campuses and more than 400 outpatient locations across the five boroughs and Westchester.
The J-51 tax break can help co-op owners repair their buildings, like this damaged ceiling in a unit at the Castle Village complex in Washington Heights. | BUCK ENNIS
Cannabis trade group sues New York state for punishing medical operators with $20M license fee
By Debra Borchardt, Green Market Report
The New York Medical Cannabis Industry Association filed a complaint this month against the New York Cannabis Control Board and the Office of Cannabis Management for what it deems is an unconstitutional $20 million fee for an adult-use license. The lawsuit is fighting for the Registered Organizations who were the first licensed cannabis operators in the state that initially launched the medical marijuana program.
How it started
In July 2014, New York state passed the Compassionate Care Act and legalized medical marijuana. The 10 original licensees had to invest millions to create a vertically integrated operation with only indoor grows. They also had to open four stores and hire a pharmacist to remain on duty for patients. The approved conditions were restrictive leading to a small number of patients and resulting in lowered sales for the ROs who were losing millions of dollars. Many of these companies as-
sumed they would be first in line for adult-use licenses to recover from their losses and investments, as this was the path most states followed. Unfortunately, that is not what happened.
MRTA interpretation
The Marijuana Regulation and Taxation Act or MRTA was passed in 2021 creating the CCB and OCM to oversee the creation of the
should be invalidated. On top of that, the complaint says, “New York State has not appropriated a single dollar of the special licensing fee collected to date for “the administration of incubators and other assistance to qualified social and economic equity applicants including the administration, capitalization, and provision of low and zero interest loans.” The lawsuit argues that the OCM and CCB admitted that didn’t come up with the fee based on the social programming and so it had to have been a punitive move designed to hurt the ROs.
adult-use program. This is where the lawsuit digs in as it points back to the language in the MRTA that stated the ROs would be charged a one-time fee for the adult-use licenses. Specifically, the MRTA made clear that this “one-time” fee was supposed to be “assessed at an amount to adequately fund social and economic equity and incubator assistance.” The OCM and CCB decided the ROs would need to spend $20 million for the
fee and could make $5 million installment payments.
The complaint alleges that the OCM and CCB did not decide on the $20 million number based on the social equity programming and only chose that number to exclude the ROs from the market.
Convoluted launch
The lawsuit claims the $20 million fee is unconstitutional and
The complaint says that the OCM and CCB wanted to break up the vertical structure that the ROs were legally forced to create and still keep them out of the market for three years. The pivot for the OCM to shift away from the medical operators to favor the social justice licensees resulted in a convoluted launch beset with problems. This in turn caused the OCM to look towards the ROs to help resolve some of the very problems it created like a lack of processed supply. So, they reduced the three-year moratorium on the ROs entering the market.
Read the full story at GreenMarketReport.com.
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Notice of App of Auth of Story Strategy Group LLC filed with NY DOS on 1/24/2023. LLC juris and date of org: D.C., 12/1/2022. Filed with Dep’y Supt of Corp, 1100 4th St, SW, Washington, DC 20024. DC Office loc: 1620 Eye St NW, Ste 900, Washington, DC 20006. NY Office loc: NY County. NY Sec of State has been designated as agent upon who process shall be served and shall mail copy of process against LLC, to; C T Corp System, 28 Liberty St, NY, NY 10028 Purpose: any lawful act.
Notice of Qualification of AM LENDER LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/14/24. Office location: NY County. LLC formed in Delaware (DE) on 11/12/24. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 122072543. DE addr. of LLC: CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.
Notice of Formation of HARTFORD CT HOLDINGS LLC
Arts of Org filed with Secy of State of NY (SSNY) on 10/7/24. Office Location: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to 156A EAST 83RD STREET, NEW YORK, NEW YORK 10028, USA. Purpose: any lawful act.
Notice of Qualification of REDA 242 EAST 75 LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/13/24. Office location: NY County. LLC formed in Delaware (DE) on 11/06/24. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, John G. Townsend Bldg., 401 Federal St. - Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.
Notice of Qualification of CADIAN SOFTWARE GP, LLC
Appl. for Auth. filed with Secy. of State of NY (SSNY) on 10/23/24. Office location: NY County. LLC formed in Delaware (DE) on 09/25/24. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 12207-2543. DE addr. of LLC: CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with Secy. of State of DE, Div. of Corps., The John G. Townsend Bldg., PO Box 898, Dover, DE 19903. Purpose: Any lawful activity
Notice of Qualification of JFK T4 F&B II, LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 12/03/24. Office location: NY County. LLC formed in Delaware (DE) on 11/06/24. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207-2543. DE addr. of LLC: 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, John G. Townsend Bldg., 401 Federal St., Ste. 4, Dover, DE 19901. Purpose: Any lawful activity.
PUISSANT L.L.C. Arts of Org. filed SSNY 8/22/2024 New York Co. SSNY design agent for process & shall mail to 228 PARK AVE STE #986574, NEW YORK, NY, 10003 RA: US CORP AGENTS, INC. 7014 13TH AVE, SUITE 202, BROOKLYN, NY, 11228 General Purpose
Notice of Qualification of DAVANTI LLC Appl. for Auth. filed with Secy. of State of NY (SSNY) on 11/11/24. Office location: NY County. LLC formed in Delaware (DE) on 03/21/22. Princ. office of LLC: 32 Ave. of the Americas, 26th Fl., NY, NY 10013. NYS fictitious name: DVTI NY LLC. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co. (CSC), 80 State St., Albany, NY 122072543. DE addr. of LLC: c/o CSC, 251 Little Falls Dr., Wilmington, DE 19808. Cert. of Form. filed with DE Secy. of State, 1351 W. North St., Ste. 1014, Dover, DE 19904. Purpose: Any lawful activity.
Notice of Formation of LP PRESERVATION DEVELOPER
LLC Arts. of Org. filed with Secy. of State of NY (SSNY) on 10/25/24. Office location: NY County. Princ. office of LLC: 116 E. 27th St., 11th Fl., NY, NY 10016. SSNY designated as agent of LLC upon whom process against it may be served. SSNY shall mail process to Corporation Service Co., 80 State St., Albany, NY 12207. Purpose: Real Estate Investment & Development
NOTICE OF FORMATION OF CROSBY LAW PLLC. Articles of Organization filed with the Secretary of State of NY (SSNY) on 11/26/2024. Office location: NEW YORK County. SSNY has been designated as agent upon whom process against it may be served. The Post Office address to which the SSNY shall mail a copy of any process against the PLLC served upon him/her is: 100 W 18TH STREET, SUITE 6C, NEW YORK, NY, UNITED STATES, 10011. The principal business address of the PLLC is: 100 W 18TH STREET, SUITE 6C, NEW YORK, NY, UNITED STATES, 10011. Purpose: any lawful act or activity
Notice of Formation of SHARAWADGI, LLC Arts of Org filed with Secy of State of NY (SSNY) on 10/31/24 Office Loc: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to 19 Stuyvesant Opal, Apt 12A, NY, NY 10009 Purpose: any lawful act
Notice of Formation of D. LOUVEL MARKETING LLC Arts of Org filed with Secy of State of NY (SSNY) on 10/28/24. Office Loc: NY County. SSNY designated as agent upon who process shall be served and shall mail copy of process against LLC, to 136 E. 76th St Apt 15E, NY, NY 10021.Purpose: any lawful act
GEORGE PRODUCTIONS, LLC. Arts. of Org. filed with the SSNY on 10/09/24.Office: New York. SSNY designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to the LLC, 61 Horatio Street, Apt 3G, New York, NY 10014. Purpose: Any lawful purpose.
SL Green reveals high cost of conversion for Midtown tower
By Aaron Elstein
It will cost more than $800 million to turn the office tower at 750 Third Ave. into 639 apartments, owner SL Green said Dec. 9. Located at the corner of East 46th St., 750 Third is a 35-story,
The Midtown office building could be turned into 639 apartments, 25% affordable.
560,000 square-foot tower typical of the boxy glass buildings that line the avenue. Renovation work will begin in the summer for what
BATTLE
From Page 1
squabble turned physically violent at one point, and the ordeal is putting the family properties in jeopardy of default.
Malekan accuses his younger brother, Michael, of trying to steal his business. Michael asserts his brother has made a mess of things and a judge must strip him of control.
“This case is an emotional matter, steamed out of jealousy and spite,” Albert Malekan said in a New York state court filing in which he accuses Michael of fraud, breach of fiduciary duty, misappropriation of trade secrets and pocketing nearly $250,000 in excessive distributions.
Michael Malekan fired the first shot last year, when he accused Albert in a lawsuit of “grossly mismanaging” the family business, cheating him out of at least $1 million, siphoning company money for personal expenses, filing false tax returns and driving a prime retail property into default. When he broke with the family in 2019 to run the Great Neck, Long Island, fashion boutique Ooh La La, he claims
“I
want to destroy him,” the younger brother said of his sibling.
Albert physically assaulted and choked him on Seventh Avenue.
“I want to destroy him,” Michael said, according to an affidavit filed by his brother-in-law, a partner in the family businesses, last month in New York state court.
Damage from the fight is spreading from the legal battlefield into the family’s prized properties.
an SL Green official described Dec. 9 as “the poster child for Midtown conversions.”
But the three-year project’s cost illustrates why developers are reluctant to convert obsolete office towers, even after the state enacted a generous tax-incentive program this year. Two converted buildings in the Financial District, 20 Broad St. and 180 Water St., are in or near default of their mortgages.
SL Green, the city’s largest office landlord, said 25% of apartments at 750 Third would be affordable. Market rates are to be around $7,000 a month for an 800-squarefoot unit, according to figures shared with investors Dec. 9. Interior spaces would be turned into storage facilities.
Creating adequate living space requires the removal of a 13-floor
Their building at 75 Greene St., which used to house Versace’s SoHo location, defaulted on its $8.5 million mortgage in April. Albert Malekan claimed lenders wouldn’t write a new loan because of the family feud, meaning the property faces foreclosure. Another building, 552 Seventh Ave., has a $12 million mortgage due in February, and Albert is “desperately” trying to refinance, his father, Elyahoo, said in an affidavit. Last year Albert sold 150 W. 36th St. for $6.5 million, city records show, which Michael described in a court filing as a “fire sale” struck to raise cash he was owed.
None of the Malekans would comment, nor would their attorneys. This article is based on court documents and city records.
Origin story
The Malekans came to America from Iran after that country’s 1979 revolution and settled on Long Island. Some of the city’s most successful real estate families hail from the community, including the Moinians, who also started out in the apparel business. Albert Malekan and his father co-founded Alberto Makali in 1985, and it was quickly a success on and off the runway. Its eveningwear was sold at Bloomingdale’s, and in 2005 Women’s Wear Daily gave an award to a Makali-designed dress with pleated images recalling Vermeer’s Girl With a Pearl Earring. Michael Malekan was brought into the business after finishing college, thanks to “persuasion and pressure” from their father. Albert said in 1997 he gave his younger brother 20% of Makali, the same as his father and brother-in-law. Albert has a 40% share.
Around 2000 Albert Malekan began investing in real estate. City records show he acquired the
slice of the building’s midsection overlooking the avenue and adding 11 floors to the western half. Lower floors would include a members-only club and fitness center.
SL Green officials said $320 million of cash would be invested in the project and the rest would be borrowed. They plan to bring in a
30,000-square-foot 552 Seventh Ave., near Times Square, for $4.6 million in 2002. Five years later he bought 466 Broome St. in SoHo for $13 million and 75 Greene St. a year after that for $5.5 million. In 2009 there was 150 W. 36th St. for $2.5 million, and in 2016 419 Lafayette St. for $4.5 million. Court records show Albert’s stake in the properties is typically 40% — at least twice that of Michael’s.
Albert Malekan managed the buildings and dealt with lenders, according to brother-in-law Shamram Golpanian, who handled bookkeeping. He also maintained control of the fashion label, with responsibility for designing clothes and traveling overseas. As chief of sales and marketing, Michael Malekan managed showrooms and retailers, and forecast consumer trends.
“Although we occasionally had
small disagreements,” Golpanian testified, “we always discussed major decisions amongst ourselves.”
Small disagreements started turning into big ones. Starting in 2016 Michael Malekan’s behavior “drastically changed” when he began shouting and cursing at the office, Albert Malekan said. In 2018 Michael fired Makali’s salesforce, saying he could handle sales alone. Sales dropped.
His plan all along was to “steal” the fashion business, Albert contends. Michael secretly stocked the Ooh La La boutique with clothing based on Albert’s designs, patterns and size charts and made by Alberto Makali’s manufacturer. Michael even told clients that Makali was out of business and his shop was the successor, Albert said. Golpanian said Michael became “frequently threat-
partner next year to help pay for the conversion.
“That’s a lot of capital we’ve got to get on the road and start raising,” CEO Marc Holliday said.
ening” and said he wanted to destroy Albert.
“I used to tell him, ‘You will also destroy yourself and me too,’” the brother-in-law said in his affidavit.
“I don’t care,” Michael Malekan said, according to the court document. “He has much more shares than me. It would destroy him more than me. I don’t care.”
Rupture remained unhealed
In early 2019 Michael threw his keys and walked out of the office. That’s when Albert assaulted and choked him on the street, Michael claims, a charge Albert “strenuously” denies. Their father asked Albert and Golpanian to be patient, assuring them that Michael would eventually come back, but the rupture remained unhealed.
Michael Malekan, who is 54 years old according to Albert’s affidavit, asked a judge in October to appoint a receiver to oversee the family real estate businesses. Among other complaints, Michael objected to his brother imposing a 5% fee to manage his share of the family business. Albert, whose age couldn’t be learned, justified the management fee based on Michael’s “lack of participation.” He said Michael didn’t object when the fee was instituted, although he added they have mostly stopped communicating.
Meanwhile, the Alberto Makali store at 242 W. 36th St. remains open for business, and Judge Andrea Masley has given the brothers until January to produce evidence. Their 94-year-old father, Elyahoo Malekan, is siding with Albert. He said in an affidavit that his older son has always handled business affairs “professionally and effectively.”
“Unfortunately,” the patriarch added, “Michael did not leave ‘properly.’”
750 Third Ave., where SL Green is planning a major office-to-residential conversion | cOSTAr
Albert Malekan, founder of the high-end Alberto Makali clothing line | FAcebOOK
agreed to the full elimination “after a lot of internal hand-wringing and disagreement,” a mayoral staffer said — and Adams surprised some officials by signing off on the policy as well, despite its expected unpopularity in the same parts of southern Brooklyn and Eastern Queens where his political base resides.
“The mayor has been clear at every single step of this process that we need to go big on housing and that this is the moment to go big on housing,” said Garodnick, one of several officials who gave the mayor plaudits for sticking to his guns on the often unpopular plan. “He did not hesitate or flinch at any point in the process.”
Key proposals to allow three- to five-story buildings near transit outside Manhattan and permit apartments above stores were added to the plan despite internal anxiety about the pushback they would receive in low-rise areas. Major real estate groups had minimal influence as the plan was being drawn up, several sources said, although opponents would claim later that City of Yes had been
tered racial segregation.
“The mayor really cared about the racial justice piece of this. That was really him,” the City Hall staffer said. “You can question whether it’s smart or not to center those questions, but he just felt that stuff viscerally.”
‘Even a broken clock is right twice a day’
For the next year, City Planning officials explained the plan in painstaking detail to each of the city’s 59 community boards, only to watch twothirds of the panels vote to symbolically reject the proposal anyway. But persuading 20 boards to support the plan was seen in City Hall as a positive sign, given the boards’ anti-development history. And council members showed a willingness to defy their own constituents by approving the business-oriented City of Yes for Economic Opportunity plan in June, despite its rejection by most of the neighborhood groups.
Then, in September, Adams was indicted on federal corruption charges. The news landed like a “blow in the gut” and briefly seemed to doom any hope of passing the housing plan, said Bronx Councilwoman Pierina Sanchez, who chairs the council’s housing committee and was working to marshal support among fellow lawmakers.
safety, Adams has never been known to involve himself closely on policy, and the outof-favor mayor may not have been a helpful presence at the bargaining table.
But some in the council complain that the mayor did little to shore up votes from lawmakers who represent neighborhoods in Southeast Queens and southern Brooklyn, where Adams maintains support. Long-simmering hostilities with council leaders stemming from previous legislative battles left the mayor’s team suspicious of the council’s motives in ways that were unproductive, a City Planning official said.
“We did not have a leanedin mayor, a leaned-in leadership of City Hall calling members, asking what folks need to get to the finish line,” said Sanchez, the city councilwoman. (City Hall countered that mayoral officials held weeks of daily meetings with council staff.)
bullshit,” said one council member. “There were modifications that were stretches, just to try to accommodate specific members.”
The result kept all key City of Yes policies in place to some extent, but lessened its impact in low-density neighborhoods — working against the plan’s central goal of making those areas contribute their fair share. Still, to the plan’s supporters, disaster had been averted.
“We did not have a leaned-in mayor, a leaned-in leadership of City Hall calling members, asking what folks need to get to the finish line.”
Pierina Sanchez, city councilwoman
crafted by wealthy developers.
In June 2022, Adams announced his intention to advance three zoning plans, which were collectively branded “City of Yes.” The ensuing months saw ups and downs: a major housing package collapsed in Albany in early 2023, dimming hopes in City Hall about the fate of their plan. On the other hand, the City Council approved big rezonings in Astoria and Throggs Neck, which persuaded the Adams administration that Council Speaker Adams was serious about pushing her members to approve controversial projects.
That Adrienne Adams would support City of Yes was never a given, say council insiders, who note that her largely suburban district in Southeast Queens may be the least likely of any in the city to support an influx of new development. But the speaker and mayor appeared to share a conviction that the city had to build more, no matter the political blowback.
“It was July and August [2023] where we had a series of meetings, and the mayor himself made the call to go all the way in our proposal,” said a City Hall staffer who worked on the plan.
Mayor Adams finally unveiled a full version of City of Yes in September 2023, presenting an estimate of 100,000 new homes and arguing that the plan would right “the wrongs of history” by undoing zoning laws that he said fos-
“A lot of members were like, ‘Well, screw that, I’m not taking the political risk here. This is going to be dicey for my community and for me, and it’s an election year next year,’” Sanchez said. But she and a few like-minded lawmakers worked to persuade their colleagues that the plan still had merit — or, as she put it, that “even a broken clock is right twice a day.”
In fact, as Adams’ personal fortunes cratered, his indictment gave the council an opening to claim City of Yes as their own. Progressives, normally the mayor’s harshest critics, had fewer objections to the zoning changes compared to moderates from suburban enclaves — and the progressive members sensed a chance to boost their own housing priorities. Left-leaning members like Sanchez and Brooklyn’s Lincoln Restler stepped up work on a list of funding demands they could pair with City of Yes, partnering with the speaker’s office and drawing on ideas from industry groups like the New York Housing Conference.
Even some administration officials felt that the indictment had a strange upside, allowing them to remove the unpopular mayor from the conversation and negotiate directly with council members, a staffer said.
Speaker Adams championed the council’s complementary funding plan, which was dubbed “City for All” and released publicly in November. Days later, a
post-election sit-down between the council speaker and Garodnick at the Somos conference in Puerto Rico solidified a sense that the plan still had legs.
Negotiations this fall began uneasily. The council’s first counterproposal would have dramatically scaled back City of Yes policies, such as ADUs, in low-density areas — effectively gutting the plan, as the administration saw it. But administration officials sensed that the proposal was a negotiating tactic, and made their case to keep City of Yes intact over weeks of video calls with council staffers.
“Garodnick and the administration, they were not ready to settle for a [housing] unit count that would look paltry and embarrassing,” said a council member familiar with talks. “They really negotiated from that mindset.”
Mayor Adams himself was absent from these talks, sources said. Aside from pet issues like public
At the same time, City of Yes supporters were heartened as the mayor continued making a public case for the housing plan in hostile forums — like a November “community conversation” in Jamaica, Queens, where Adams declared that it was a way to house the most vulnerable New Yorkers.
“I have not bumped into one homeless person [who] said, ‘Don’t do more housing,’ the mayor said, before chiding his constituents. “I don’t think anybody in this room is homeless.”
‘Proud of the outcome’
Some 20 council members were willing to support City of Yes with minimal changes, including most progressives and members from Manhattan.
But to exceed the bare-majority threshold of 26 votes, it became clear by mid-November that the council would need to soften controversial policies on parking and the small backyard or basement apartments known as accessory dwelling units.
“There were periods where I wasn’t sure ADUs were going to make it at all,” said the City Hall staffer.
A compromise took shape in which parking mandates would vary by three zones — resembling one of the administration’s original ideas — while allowances for ADUs and small apartment buildings would be pared back in lowrise neighborhoods. Although the council said the carve-outs were based on geography and transit access, some changes had clear political motives: backyard ADUs were banned in areas represented by lawmakers like Nantasha Williams and Selvena Brooks-Powers, who were known to be on the fence. Parking mandates were surprisingly preserved in Upper Manhattan, where the council member, Carmen De La Rosa, had been publicly undecided on City of Yes.
“Some of the considerations were legitimate and some of them were
As a Nov. 21 deadline approached to reach a deal before council committees voted on the plan, the zoning changes were largely settled — with the only hangup being how much money City Hall would commit for the council’s separate City for All agenda. The mayor’s budget office balked at spending more than $4 billion, and the city secured a final $1 billion in state money from Gov. Kathy Hochul after midnight the night before the vote, amounting to a hefty $5 billion commitment that satisfied the speaker’s office. (The mayor’s office had been in talks for weeks with Hochul and even U.S. Senate Majority Leader Chuck Schumer, who both made calls on behalf of City of Yes, a city official said.)
By then, the speaker’s office believed it had the votes to pass City of Yes, which in its weakened form would now produce a maximum of 82,000 homes over 15 years. But some suspense remained in the two weeks before the full council’s Dec. 5 vote, which was always bound to be close. As voting began Dec. 5, Speaker Adams seemed to sense the urgency — the normally measured lawmaker raised her voice as she implored her colleagues to vote yes.
“This council cannot be the body that says no to people that need a place to live,” she said. “We cannot do nothing. We cannot do nothing.”
The final tally was 31-20 for City of Yes — comfortably above the bare minimum but far closer than most votes the council takes. Several lawmakers, including Brooks-Powers and Williams, said explicitly that the council’s changes secured their “yes” votes, while the outer-borough Democrats who voted “no” described fears about parking and infrastructure strains that were not assuaged despite City Planning’s best efforts.
In spite of their shared achievement, tensions remained high between the mayor and speaker: Adrienne Adams declined to even mention the mayor the day of the vote, and did not appear at his celebratory press conference afterward.
The lingering hostility underscored the long odds that always defined City of Yes: a controversial policy pushed by an unpopular mayor, left in the hands of 51 politicians who had plenty of incentives to reject it. Instead, they approved it — an unthinkable idea just a few years earlier, and the first time in decades that New York took steps to boost development citywide.
“We’re very proud of the outcome here,” said Garodnick. “This, to me, is a significant moment where I believe we will finally turn the tide and put the city on a more stable path for housing.”
The City of Yes plan targeted areas like Church Avenue in Brooklyn, where zoning laws prevent housing from being built atop single-family stores. | BUCK ENNIS
Council Speaker Adrienne Adams kept City of Yes alive for months, and made an impassioned speech urging her members to vote for it on Dec. 5. NYC COUNCIL mEDIA UNIT
Bronx Councilwoman Pierina Sanchez was among the lawmakers who rallied colleagues to support City of Yes, alongside a complementary $5 billion funding plan put together by the council. NYC PLANNING
Dan Garodnick, the City Planning director, fielded hours of questions from skeptical council members at an October hearing on City of Yes. NYC COUNCIL mEDIA UNIT
Condo developer nds a sweet spot in the middle of the market
Bentley Zhao’s New Empire has built 2,000 housing units since 1997
By | C. J. Hughes
If your home is a midsize condo on an up-and-coming block in Kips Bay or Long Island City or Flatbush, chances are it was built by Bentley Zhao.
In less than two decades, his proli c New Empire Corp. has had a hand in a hefty 120 projects either as a developer or as a construction company. e list encompasses 2,000 units of housing, or a brisk 100 condos a year.
ough the streak may not have turned New Empire into such a bold-face name as, say, Extell Development Co., staying low-pro le seems to suit Zhao just ne.
“ ose other developers build for very rich buyers, and we’re doing a di erent kind of product,” said Zhao of his projects, which typically target rst-time buyers from households earning between $150,000 and $350,000 a year with prices that rarely top $2 million.
“It’s a totally di erent market.”
Zhao also takes aim at enclaves that don’t always see lots of highend housing. For instance, the Lower East Side’s curvaceous 208 Delancey St. arose from a former parking lot and auto-body shop near the Williamsburg Bridge. at a stop for F, J, M and Z trains is ve blocks away reveals another trick to Zhao’s trade: Always build within a 10-minute walk of a subway.
Zhao spent his childhood in his native China and didn’t immigrate to this country until he was 22, in 2000, when he joined his family in Sunset Park. A few years earlier, his father, Rongde Zhao, had
founded New Empire, which at rst primarily handled construction for clients such as restaurants and shops. After studying business and architecture at Baruch and a local CUNY branch for a few years while simultaneously laboring as a construction manager in the family rm, Zhao left college early to become CEO of New Empire. e business also employs his older brother, Ken, who as vice chairman handles construction.
Style evolved dramatically
New Empire’s style has evolved dramatically in short order. Its rst go-it-alone Brooklyn condo project, the 36-unit 602 39th St. in Sunset Park from 2008, is low-slung, at 3 stories, and sports a no-nonsense red-brick facade. e developer hauled in $16 million from the sale of its units, its o ering plan shows.
But a decade later, after New Empire rst touched down in Manhattan, it delivered 409 W. 45th St., a Hell’s Kitchen o ering near Ninth Avenue with cream walls and soaring oor-to-ceiling windows. Its seven units notched $16 million, records show.
It’s a look New Empire exported to Queens in 2020 with its rst project in that borough, e Neighborly, a 77-unit o ering at 37-14 34th St. with white brick and chocolate trim that sold out in a year.
“We try to get better and better with each project,” Zhao said.
Along the way, the company,
which has o ces both in Brooklyn and Manhattan and employs 50 full-time workers, also launched a stylish, contemporary furniture business, the one-stop-shop Avenue Studio, which has two stores, one in Sunset Park and the other at the Shops on Broadway mall in Hicksville, Long Island, near Zhao’s Nassau County home. Condo buyers can opt for New Empire to furnish their units as well.
Like even marquee developers, Zhao has had to adjust as of late. “ e pandemic was a bad time for every business owner, with prices four to ve times above normal,” he said. And the steep interest rates of the past few years have also made nancing projects tougher, he added.
Concerned that the buying pool might not be as deep as before, banks are underwriting projects more conservatively, another challenge. Indeed, where they might have kicked in 65% of a project’s cost before, 45% is the new normal, explained Zhao, who added that he’s scaled back sales targets from an ideal eight units per month to just four. “It’s just not as fast as before,” he said.
Re ecting on the past also allows Zhao to realize how much fancier Brooklyn has become, a trend that the developer has helped fuel himself. “Gentri cation is the biggest change from when I was a kid,” he said. “But I feel proud to be able to give back by improving the appearance of a neighborhood.”
Bentley Zhao
Age 48
Born Xinhui, Guangdong, China
Grew up Xinhui and Sunset Park, Brooklyn Resides Brookville, Long Island
Education He studied nance at Baruch College and later architecture at CUNY’s New York City College of Technology, but he did not graduate from either school.
Family life Zhao is married, and he and his wife have three children.
Down time Zhao recently began studying to earn his pilot’s license, putting in his hours at Long Island airports on weekends. He also plays tennis.
Big leagues New Empire may not be as well known as Extell, but Zhao has brushed elbows with the developer all the same. In 2015 he was part a group that bought 135 E. 47th St. from Gary Barnett’s rm for $43 million before the investors ipped it four years later for a $115 million haul.
CUSTOMER
Bentley Zhao, CEO, New Empire Corp. | BUCK ENNIS
