The Manhattan Institute’s
Center for Rethinking Development
Ideas that shape the city’s planning, housing, and development
A Monthly Newsletter by Julia Vitullo-Martin, MI Senior Fellow

Thinking about Live/Work

Julia Vitullo-Martin, June 2005


Mixed-use districts are already working in every borough—they've just often developed informally, without city government permissions and permits.

"The city is losing the function for which it is no longer suited—manufacturing—but reaffirming its great and most basic function as a place for people to come together," wrote William H. Whyte in Historic Preservation in 1980. Though he was the finest of urban predictors, Whyte was only partially correct about manufacturing's future.

(©Tina Lund, Urbanomics)

Yes, the long-term decline of manufacturing jobs in big cities has continued unabated. In 1950, New York City had over 1.1 million manufacturing jobs—down to fewer than 112,000 today. But certain kinds of manufacturing-related jobs remain vital.

Foremost among them are the infrastructure-support businesses—barge companies, cement manufacturers, utilities, marine transfer stations, even bus depots—that the city needs. New York's construction boom cannot continue without cement, or the barges to cheaply and cleanly transport it. Nor can New York accommodate the hundreds of thousands of people hoping to move here—the Department of City Planning predicts a record population of 8.5-9 million by 2025—without strong utilities, including power and phone companies.

These noisy, sometimes ugly, often dirty semi-industrial uses don't always make the best neighbors, however. The 20th-century (©Tina Lund, Urbanomics) solution was to segregate and protect such uses through zoning—designating vast amounts of land as "M" (for manufacturing), and preventing all residential and most commercial tenants from moving in. As a result, industrial concerns have seldom needed to use land efficiently.

Waterfront that could be prime property is frequently wastefully used. M-zoned sites blight the waterfront of all five boroughs, eating up acreage and bringing surrounding property values down.

Richard Barth, executive director of the Department of City Planning, says the city is well aware of the problem. "We're talking to Con Ed, for example, about all the land they take up in Northern Manhattan. And we're talking to the Department of Transportation and to Time Warner. Yes, they both need huge parking lots. But do the parking lots need to be on the waterfront?"

A second vital manufacturing sector is comprised of glamorous, design-oriented craft industries the city may not "need," but which it admires and wants. These include everything from furniture makers and glass-blowers to parachute designers, puppeteers, breweries, and boutique bakeries.

These industries lend themselves easily to live/work arrangements, says economist Regina Armstrong, founding partner of Urbanomics, an economic research firm. Unlike, say, steel workers, these high-end manufacturers can often live where they work—or very nearby.

THE BEGINNINGS OF AN AGREEMENT: MIXED-USE

(©Tina Lund, Urbanomics) Live/work offers the beginnings of an agreement between industrial advocates who would like to see most M zoning retained and residential advocates who would like to see residential development permitted in most manufacturing and commercial zones. While Live/Work (also called Zero Commute Housing) became a national movement in the 1970s, its very traditional ideas derive from the basic neighborhood development patterns of nearly every American city, including New York.

Until the mid-20th century, when zoning started rigidly categorizing and segregating uses, most New Yorkers worked close to where they lived—often in the same building. The 1961 rezoning tried to stop this by forbidding residential construction or renovation in manufacturing zones (which that same zoning resolution expanded deep into formerly residential neighborhoods).

While the 1961 rezoning hastened the decline of residential neighborhoods, manufacturing jobs also continued their relentless decline. According to a just released study, Up from the Ruins, (©Tina Lund, Urbanomics) by Urbanomics, New York has lost 40% of its manufacturing base over the last five years. The result is that today less than 7% of the city's workforce is in manufacturing—yet the city still maintains M-zoning for about 15% of its land area. A typical occupancy rate of 400 square feet per worker would accommodate over 628,000 manufacturing workers—or more than five times what the city has. The disconnect here is immense: far more land than is necessary is restrictively zoned for ever fewer jobs.

The job loss is a sad but old story. Today, however, there's a new element, which is the city's immensely robust residential demand. Never before has the city had so many residential tenants ready to fill the space left by declining industrial uses. People very much want to live on the waterfront—with or without industrial uses nearby. Adam Friedman, executive director of the Industrial Retention Network, proposes that City Planning institute "a new balanced mixed-use district that allows housing but also preserves some space for industry." Mixed-use districts would work up and down the waterfront. The truth is, mixed-use districts are already working all over the city, including in areas where they're not allowed. They’ve just developed informally, without city government permissions and permits.

(©Tina Lund, Urbanomics)

The largest industrial landlord in New York, Bush Terminal CEO Bruce Federman, also urges mixed-use zoning. "I love my businesses," says Federman. "But I'm the last of the Mohicans. We're holding on, and we want to increase the industrial base. But we don't see the velocity of business that once existed. Believe me, if all these wonderful industrial uses existed, we'd see them. What we need is appropriately planned contextual zoning that balances the needs of what's there with what should be there or what could be there—some variation on Greenpoint-Williamsburg, some variation on live/work, that says commercial and industrial with residential is okay. I don't see any smelting or Ford plants here anymore. I see manufacturing uses that can live with residential."

Ironically, some of the manufacturing uses that could live with residential uses have a hard time finding a home under the current zoning. Kathryn Wylde, President of the Partnership for New York City, says, "One of the new industrial areas we're focusing on is biotech, which is something of a victim of the current zoning code, which only allows biotech commercial development in M3 zones. Whereas in fact biotech—Pfizer's plant in Brooklyn is a good example—is a clean, non-smokestack industry activity that should be totally compatible with residential communities." In sum, M zoning discriminates against some desirable manufacturing—the last thing anyone wants to see happen.

Returning to the city's pre-1961 zoning would accommodate both residential and most manufacturing uses—particularly if coupled with protection against nuisance litigation for existing manufacturers.

BEGINNINGS OF AGREEMENT: TRY DENSITY

Adam Friedman has a second proposal that has the makings of progress. As he told a recent Manhattan Institute-sponsored panel on (©Tina Lund, Urbanomics) rezoning manufacturing areas, "Rather than rezone an industrial area like Dutch Kills in Queens, maybe it is worth exploring increasing the density of the existing residential area, which has the schools and stores and amenities that residential areas typically need."

Increasing permitted residential density, combined with the Bloomberg administration's stated policy of "tightening the boundaries" of manufacturing areas, could go far towards solving the real estate problems of both sectors. Yet the political obstacles will be great. As lawyer and former city planner Howard Goldman said, "While increasing density to meet residential housing needs without dislocating industrial uses is a great idea, I think it must be coupled with some thinking about procedural reforms. How can the city accomplish upzonings as a practical matter without having to run the terrible and discouraging gauntlet that is currently associated with all upzonings?"

Goldman correctly notes that any downzoning is "an automatic negative declaration, a no-brainer," meaning that a downzoning is exempt from environmental reviews or public hearings. An upzoning, in contrast, will be subject to both state and city environmental reviews and elaborate public hearings. Upzonings are by their nature far harder to accomplish than downzonings.

WHAT’S NEXT
(©Tina Lund, Urbanomics)

At the urging of the Bloomberg administration, the state legislature just passed a bill authorizing an Industrial Business Zone in each borough and making $50 million in subsidies available. The bill awaits the governor's signature. The bill authorizes the provision of tax credits of $300-500 per employee to eligible businesses that relocate to industrial business zones and the creation of an industrial business zone boundary commission composed mainly of government officials, who will in turn designate the new zones.

In the meantime, the Department of City Planning is studying Live/Work zoning in waterfront areas.


June 2005
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LINK OF THE MONTH
Up from the Ruins
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LINKS
Urbanomics
New York Industrial Retention Network
Partnership for New York City
Real Estate Board of New York
NYC Department of Small Business Services
Department of City Planning: Dyckman to the Broadway Bridge
Department of City Planning: Long Island City Rezoning
New York City Bioscience Initiative
Protecting and Growing New York City's Industrial Job Base
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“What I'd like to see in Brooklyn is mixed zoning similar to what's occurred elsewhere in the city—zoning for a broad commercial context, with residential okay, and work-live businesses that will attract the next generation. In today's work-live business, you're no longer operating a sewing machine. You're operating a computer terminal.”
Bruce Federman,
CEO, Bush Terminal
 
“Ed Koch was once asked if New York City was running out of land. He said, 'We can always go up.' So the issue is not necessarily is there vacant land, but what is the density at which we're going to permit construction?”
Steven Spinola,
President, Real Estate Board of New York
 
“Where our 19th century centers of industry were located is not necessarily where we want them in the 20th century.”
Kathryn Wylde,
President, The Partnership for New York City
 
“The zoning resolution of 1961 was devastating to Red Hook. I think we do have to explore the need to maintain and to keep and encourage jobs, but I also think that mixed-use zoning and rezoning parts of the waterfront are definitely long overdue. Also, long overdue is an analysis of the actual number of jobs because there is often a gross over-statement as to the actual number of industrial jobs in Red Hook.”
John McGettrick,
Red Hook Civic Alliance