February 28, 2005
By Julia Vitullo-Martin
ONE important fact has been overlooked in all the brouhaha over the West Side stadium: The area is now a wasteland because the city government has long mandated that it be so - and we don't need a stadium to change that. And Manhattan's far West Side is far from the only part of town to suffer from government-mandated blight.
New Yorkers tend to think of the city as an exceptionally dense place, where every parcel of land is developed to its highest and best use, with no property left over for new houses or apartment buildings. In fact, New York is full of vacant land, including highly desirable property on the waterfront.
The problem: This land is zoned improperly - or held off the market altogether by government entities like the Port Authority or the city's Department of Sanitation. That's the main reason why, even when New York as a whole is booming, most of our waterfront is derelict or grossly underused.
The Bloomberg administration, which has paid more attention to the waterfront than any administration in memory, believes the Jets stadium it wishes to build over the MTA rail yards is the best way of reviving Manhattan's West Side. But the sprawling rail yards are a blight because the city's zoning restricts the property to low-scale manufacturing - an economic use that doesn't actually exist in New York.
If New Yorkers learn nothing else from this mess they should learn this: City government withholds or confers value on property through its zoning.
The city's basic zoning measure is the Floor Area Ratio (FAR) - the total floor area that will be allowed on a lot, divided by the lot size. The MTA property is zoned to an extremely low FAR of 2, which allows a building of 20,000 square feet of floor area on a zoning lot of 10,000 square feet. The Jets plan calls for an extraordinarily high FAR of 12.
To put these figures in perspective: The main boulevards of the West Side, like 86th Street and Broadway, are basically zoned to a FAR of 10, which allows for towers and high density.
No developer is going to bid for property with a FAR of 2 - because it has no value. The value of the MTA property lies entirely in the presumption that the city will rezone it. If the city refuses - which it can indeed do - the property will have no development value. (The state could also step in via its Empire State Development Corp. and rezone the property over the city's objection - though it says it would not do that.)
You can see the problem faced by MTA Chairman Peter Kalikow. As a developer, he knows all about market value - but which market value should he be demanding for his agency? Market value at a FAR of 2 or a FAR of 12?
But here's the more important part: It's not just the Hudson Yards.
Look around. Any time you see a swath of derelict property near a good neighborhood (which these days is most of New York), you can pretty well figure that nine times of 10 it's badly zoned.
Every borough has a neighborhood held down by zoning: Red Hook in Brooklyn; Sherman Creek in Northern Manhattan; Dutch Kills in Long Island City, Queens; the North Shore of Staten Island; most of the Bronx waterfront.
Worse, often the mis-zoning goes hand-in-hand with government use - thus Brooklyn's waterfront is simultaneously held down by its manufacturing zoning and by the dominant ownership of the Port Authority, which simply stockpiles property and lets it languish.
After all, government agencies don't pay carrying costs and aren't constrained by any lack of income, so they can persist in the mis-use of property that should be highly valued. This is why government can cavalierly make location decisions without regard to market value.
Take the Bloomberg administration's decision to site a huge waste-transfer station on the Hudson River at 59th Street. If it were valuing this property correctly, it wouldn't dream of putting a garbage dump on prime property, up river from the cruise ship piers it intends to renovate - and smack dab in the middle of the West Side renaissance.
Nor would the Port Authority maintain the dilapidated Pier 40, which it uses for parking, just north of Battery Park City. No one would call parking a proper waterfront use.
In other words, government land-use policy often promotes twin evils: First, holding down the value of property by maintaining the wrong zoning and second, siting undesirable government uses in or adjacent to those same wrongly zoned properties, holding values down further.
The Bloomberg administration knows this, and has proposed the most extensive rezoning since the disastrous Wagner administration rezoning of 1961, which extended manufacturing zoning inland from the waterfront.
But for every neighborhood that City Hall proposes to rezone, an adjacent neighborhood stalls. The city is rightly rezoning the waterfront North of the Brooklyn Bridge. But it's also leaving neighborhoods like Red Hook, below the bridge, trapped by industrial zoning.
The dead hand of industrial zoning prevents residential development, despite historically high demand, and forces would-be developers into the city's convoluted, expensive and time-consuming appeals process through the Board of Standards and Appeals. Even properties that are successfully appealed - like the residential conversion of an old warehouse at 160 Imlay Street on the Red Hook waterfront - can then be halted by litigation.
Last week's Olympics Committee visitors surely asked themselves: How can New York's waterfront be such a mess? Our Olympic competitors, London and Paris, have gorgeous waterfronts. But theirs aren't held down by our peculiar combination of non-residential zoning and egregious government uses.
Julia Vitullo-Martin is a senior fellow at the Manhattan Institute.
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