The New York City Council finally passed the Adams administration’s plan for the “City of Yes for Housing Opportunity” (COYHO). In giving its approval, the council made some significant changes to the legislation, which now awaits the mayor’s signature. It remains to be seen whether this far-reaching initiative will be successful in creating more affordable housing.

COYHO serves up the traditional fare of using massive zoning changes as a policy tool to address urban problems. To simplify: the theory is that we need more housing, so let’s relax some zoning restrictions to encourage more development. Instead, what we actually need is more affordable housing—but don’t worry, this thinking goes; as long as we build enough, then prices will eventually come down. 

What upzoning absolutely will do is boost land values and enrich real estate developers. The question is, will there be the side benefit of increasing the supply of housing that is actually affordable to most New Yorkers, or will it simply increase the supply of expensive apartments that most cannot afford?

The Adams administration, of course, is all in on this bet: “In the face of our long-standing housing crisis, the greatest city in the world has just passed the most pro-housing legislation in our history,” said First Deputy Mayor Maria Torres-Springer in a press release. “‘City of Yes for Housing Opportunity’ marks the start of a new era of affordability and access for everyday New Yorkers.” Governor Hochul released an equally vague and effusive press release in support of the action. 

Similar to other theories of “trickle-down” economics, this policy has little evidence to support it. Even if true, according to research by Juan Rivero, this trickle-down process will take somewhere between 34 and 100 years before it brings prices down within reach of New York City’s rent-burdened families. 

Nevertheless, there are several sensible reforms included in COYHO, some of which were cut back by the council.

• Legalizing small accessory dwelling units (ADUs) for one- and two-family homes: These small homes, which include backyard extensions and converted garages, can give homeowners extra income and accommodate extended families. Unfortunately, the council’s plan adds restrictions, prohibiting backyard ADUs in low-density residential areas and in historic districts. It blocks ADUs altogether in attached homes or row houses, and those on ground or basement floors, if they’re in areas vulnerable to flooding. And to build an ADU, the homeowner is required to live on the property.
• The legislation permits more development in areas with good public transit, creating three-, four-, and five-story apartment buildings near most transit and along commercial corridors, respectively, with an affordability incentive for projects with more than roughly 50 homes. Again, the council elected to reduce this proposal, prohibiting the taller buildings on blocks that are mostly one- and two-family homes, and neighborhoods with detached single-family homes.
• The original COYHO plan largely eliminated off-street parking requirements, a proposal enthusiastically supported by public transit and public space advocates. But in order to favor outer-borough drivers, the council retained these parking mandates for some new residential construction, introducing a three-zone system that lifts them entirely in one zone, reduces them in another, and keeps them in place in the third. 
• Re-legalizing small and shared housing models with common facilities like kitchens. Often called SROs (Single-Room Occupancy) or supportive housing for residents with special needs, the demand for this type of nontraditional housing has grown in recent years. The legislation makes it easier to build this type of housing.  
• Making it easier to convert offices and other nonresidential buildings into housing. The costs and difficulties of office-to-residential conversion are underestimated, however, and it remains to be seen if this change will produce much housing.

The final City of Yes deal also put some limits on zoning for infill housing, which would make it easier for religious facilities, schools, and coops to build on their campuses. To address concerns about overcrowding, the council prohibits infill on any land being used today for recreation and requires that campuses maintain a certain percentage of open space. It also excludes New York City Housing Authority (NYCHA) campuses.

But the single biggest change is the increase in allowable density in many areas of the city. The big bet of COYHO is that by relaxing the zoning restrictions developers will build (80,000 apartments over the next 15 years), and this boom will so exceed demand that prices will fall. However unlikely that bet might seem, are there other benefits to COYHO?

Density, in itself, is not necessarily a bad thing. Occupying less land is more sustainable, and density reduces the amount of car use. Density also supports more amenities, such as healthcare, retail, entertainment, and education—provided, of course, that cities plan to provide those amenities. Transit-oriented development can lead to the concept of the “15-Minute City” and its benefits. But these benefits only accrue if the city plans for these amenities to be added. Otherwise, the additional density can impose a burden on existing facilities and infrastructure. What might be seen as NIMBYism is often a real concern about the impact of density when it is not mitigated by proper neighborhood planning. The council’s plan dedicates $2 billion for infrastructure investments, including stormwater and drainage systems, street improvements, open space, flood mitigation, and sewer upgrades. All of this is good, but one would like to see equal attention paid to schools, healthcare, transit, and retail, the components of a livable city.

As the City Club, a New York City think tank, recently opined, there are some serious downsides to Mayor Adams’ plan:

• The luxury market has led to the elimination of older, more affordable units.

• COYHO increases the allowable size and height of new market-rate (i.e., luxury condo) developments in areas with contextual zoning, which is meant to keep new developments in scale with their surroundings. 
• Zoning bonuses allow additional bulk and height that had been reserved exclusively for developments that included affordable housing to those that are purely market rate.
• COYHO allows new development on currently required open space in what the city calls “campus” complexes, which includes New York University superblocks, religious institutions, schools, and other properties covering larger spaces under common ownership. Very often these open areas are not just “wasted space” but essential public amenities that make these campus complexes livable.
• The Universal Affordability Preference (UAP) does not address true affordability. A 20% bonus on buildings that provide 20% for those earning lower than 80% of median income pencils out to $101,680 for a family of three, well above the income of most working people.

The council’s COYHO changes included:

• $2 billion in additional housing capital investments to finance affordable housing development and preservation, support the Mitchell-Lama developments, NYCHA, and the Housing Development Fund Corporation.
• Larger projects that take advantage of the UAP program with 10,000 or more square feet of UAP floor area will be required to deliver 20% of their total income-restricted units at 40% area median income (AMI) or below, to deliver deeply affordable housing.
• For the first time in New York City’s zoning code, affordability requirements in low-density zoning districts will be established to enact inclusionary zoning citywide. This means that all new residential projects will include at least some affordable apartments. (The COYHO Universal Affordability Preference is optional,not mandatory.)
• The MIH Option 3 deep affordability option that requires the delivery of 20% of income-restricted housing at 40% AMI deep affordability will become a standalone option opening up new opportunities for deeply affordable housing through the MIH program.

• New DCP neighborhood planning studies for Coney Island Avenue in Brooklyn Community Boards 12 and 14, East Flatbush in Brooklyn Community Board 17, Harlem River North in Bronx Community Board 7, and White Plains Road in Bronx Community Board 12. Public engagement will begin in 2025, and these studies could result in rezoning actions that deliver thousands of housing units, including affordable housing.

• Commitment to work with the council to develop a vision for creating new community health, wellness, and recreation centers in districts with health and safety challenges. These centers could feature access to health and mental health services, community, and recreation spaces.

Another concern with COYHO is that it will further encourage the demolition of existing buildings with more affordable (in some cases rent-regulated) apartments and replace them with less affordable luxury buildings. According to a report by the Department of City Planning, affluent neighborhoods close to job centers have seen a net loss of housing despite new development. This is due to luxury buildings having larger apartments than the buildings they replace. As COYHO permits larger buildings, we can expect this trend to continue; in some wealthy neighborhoods, ironically, COYHO might actually result in less affordable housing than we have now. 

At the end of the day, the only effective way to increase the supply of housing that is truly affordable to most working New Yorkers is through subsidy.

At the end of the day, the only effective way to increase the supply of housing that is truly affordable to most working New Yorkers is through subsidy. This can be either a demand-side subsidy, as seen in the federal Section 8 program, or it can be a supply-side subsidy, in which market-rate developments are infused with capital in return for providing permanent affordability for a portion of the apartments. Demand-side subsidies have the problem that they work best when there is a plentiful supply of housing and are less successful when there are few apartments available. They don’t create housing; they give lower-income families more access to housing that exists. Supply-side subsidies need money—a lot of money—given the costs of construction in New York. But there is really no other way. COYHO might increase supply, but it’s unlikely to increase affordability without significant subsidy.

Rather than face that reality, COYHO hopes that yet another “public-private partnership” born from zoning changes will deliver the goods. But the chances are that the vast majority of the 80,000 units projected by COYHO will not be affordable to the working-class people living in the places where they are built. 

The city will say that this is the only way, that they don’t have the funds to subsidize the housing, and that only by zoning incentives to real estate developers can we get any affordability at all. But as I argued in a previous article on Common Edge, the city has the revenue already built-in in the form of the 1905 Stock Transfer Tax. We just need to start collecting it again. 

Featured image: affordable housing under construction in Prospect Park, Brooklyn, via Wikipedia.