Land Use Prof Blog

The Debate over Richard Florida's views on the Creative Class: Richard Florida weighs in

For those of you who just cannot get enough of Richard Florida, the Daily Beast this week features an exchange between Joel Kotkin and Richard Florida on whether Florida's evolution as a proponent of cities being geared toward the "creative class" constitutes a full-scale retreat from his emphasis on this group as a generator of local and regional economic growth.  Florida's installment references a related piece on the importance of urban design that promotes personal interaction that he published in the Wall Street Journal back in July.

HT, Chris O'Byrne.

Jim K.

What is the Value of a Historic Facade Easement?

For those of you interested in conservation easements (particularly historic façade easements), you may have been following the Scheidelman saga.The next installment is now out.

In Scheidelman v. Comissioner, T.C. Memo. 2010-151 [Scheidelman I], the landowner sought a deduction for a façade easement burdening her Brooklyn brownstone. The Tax Court disqualified an appraisal because it viewed the method of calculating the easement’s value inadequate. Appraisals must include the method of valuation used as well as the specific basis for the valuation. The appraiser applied a percentage to the fair market value of the property before conveyance of the conservation easement. The Tax Court found that the appraiser had insufficiently explained the method (i.e., the percentage approach) and basis of the valuation (i.e., the specific data used).

The landowner appealed to the Second Circuit. The Second Circuit [Scheidelman II, 682 F.3d 189 (2d Cir. 2012)] reversed the Tax Court, saying that the shortcomings of the approach should not disqualify the appraisal.

On remand [Scheidelman III, T.C. Memo. 2013-18 ], the Tax Court accepted the Second Circuit's assessment that the appraisal was “qualified” but still  thought it was crappy was not credible. You can check out the case if you want to delve into the nitty gritty of appraisal methods. The most problematic issue appeared to be the fact that the appraisal just picked a number between 10 and 12% of the fair market value of the home when trying to determine the value of the conservation easement. The appraiser's reasoned that those are the numbers that courts and the IRS seem to like instead of actually looking at the property and making an assessment.

I am enamored of this case though because in the end the Tax Court said no tax deduction is warranted. The evidence demonstrates that façade easements actually increase the value of homes in this area. Additionally, the landowner herself admitted that she was seeking a tax deduction for something she would have done anyway. Here is my favorite quote from the landowner:

    "Well, I was primarily interested in preserving my house itself in light of the dramatic development     that was occurring in and around Fort Greene during those years and still is. I was also intrigued by     the tax benefit of preserving the facade which I had intended to do anyway. …I also wanted to benefit     tax wise. I didn't know how much I would benefit, but I wanted to benefit from what I was already     intended to be committed to doing."

I have been disturbed fascinated by conservation easement tax deductions that pay owners not to do things they never planned on doing. In understand that there can be some value to the conservation easements becuase perhaps future landowners would have other desires, but it is hard for me to reconcile that worth with the high value of tax deductions current landowners receive. I am glad to see the IRS and Tax Court calling these landowners out. Maybe if a landowner seeks to claim a tax decuction for a conservation easement and we see that the conservation easement increased the value of their land, they should have to pay that difference to the treasury.

Jessica Owley

 

 

 

Land Use in "Promised Land"

Living in Pennsylvania (as I now do) I feel compelled to see the new Matt Damon movie "Promised Land," which opened in local theaters yesterday.  The movie is about fracking, and the trailers look very intriguing.  (I saw the trailer while seeing Tom Cruise's new movie "Jack Reacher" which, while most notable for multiple visceral fight sceens and car chases, also has a land use angle - SPOILER ALERT the villians are developers trying to get an advantage in a development project in downtown Pittsburgh.)

Today I was searching for a review of Promised Land and I stumbled across this article on NPR.org, which had an interesting critique of a scene where local citizens vote on whether fracking would happen in their town.

The film remains in the realm of fiction as the town debates an upcoming vote on whether drilling and fracking should be allowed. In the real world, there's almost never a vote.

"In Pennsylvania, where this film was made, municipalities have very little authority over what happens," says Kate Sinding, senior attorney and deputy director of the Natural Resources Defense Council. "They certainly don't get an up-and-down vote."

Still, I think this movie is a "don't miss" for land use afficianados, and I plan to see it soon.

Jamie Baker Roskie

Philadelphia's New Zoning Code

The Philadelphia Inquirer has an article providing an overview of the city's new zoning code, which replaces its 1962 code.  The new code allows high-rises to be built more easily in the city's central commercial district and along its waterfront as-of-right.  (See map of new zoning districts.) It also "assumes the city's population will grow in the future, and it encourages higher density buildings to accommodate the newcomers."  (Note:  Philly's population has declined from slightly over 2 million in 1960 to slightly over 1.5 million today.)

According to the article:

Because the previous code was so outmoded, the Zoning Board of Adjustment had gotten in the habit of handing out variances almost at whim, even when a project deviated dramatically from the neighborhood context. The haphazard process invited abuse from powerful gatekeepers, most of them Council members. It often seemed you only needed to make a campaign contribution to obtain a variance in Philadelphia.

Developers advocated for a more predictable development process, which would enable the city to better compete for residents and jobs.  The new code is approximately 200 pages shorter than its predecessor.  

Two thoughts come to mind after reading this article.  First, the discussion surrounding the new zoning code echoes the considerations raised in relation to tax reform, particularly the desire for simplicity and predictability and the concern that a code laden with amendments, overlays, and other complexities favors sophisticated actors.  Second, as Philadelphia pushes greater density and potential population growth in Center City, what will become of outlying city neighborhoods, which have seen substantial population declines (and a significant number of vacant properties) in recent decades? In May the city launched a website mapping its inventory of 9,000 vacant properties, approximately one-quarter of the estimated 40,000 abandoned buildings in the city.

John Infranca

NYT on Vietnam Property Bubble

China isn't the only Asian country on the brink of a property bubble bursting.  In the New York Times, Thomas Fuller reports In Vietnam, Growing Fears of an Economic Meltdown:

        In Vietnam’s major cities, a once-booming property market has come crashing down. Hundreds         of abandoned construction sites are the most obvious signs of a sickly economy.           

“I can say this is the same as the crisis in Thailand in 1997,” said Hua Ngoc Thuan, the vice chairman of the People’s Committee of Ho Chi Minh City, the city’s top executive body. “Property investors pushed the prices so high. They bought for speculation — not for use.”

The article describes a Vietnam that sounds similar in many ways to the US and other places: a real estate bubble fueled by overpromotion; a recession that has left land development projects uncompleted; a disproportionate impact on younger workers; hard times for certain sectors of the economy, while others are relatively unscathed.  Of course with Vietnam having dived in to the global economy in the past generation, the American recession and the European debt crisis are also having effects in Vietnam.  But it's still quite interesting that the trigger seems to be a real estate bubble.

Matt Festa

Bauer on Age-Restricted Communities and Civil Rights Laws & Regulation

Mark D. Bauer (Stetson) has posted ‘Peter Pan’ as Public Policy: Should Fifty-Five-Plus Age-Restricted Communities Continue to Be Exempt from Civil Rights Laws and Substantive Federal Regulation?  The abstract:

Although millions of Americans live in 55-plus age-restricted housing, little research has been done to determine whether these communities benefit their residents, or the nation as a whole. This is particularly ironic because these communities exist in contravention to anti-discrimination laws by virtue of a specific exemption granted to real estate developers by an Act of Congress. Ordinarily age discrimination is prohibited by the Fair Housing Act, Title VIII of the Civil Rights Act of 1968. Successful lobbying by special interest groups carved out an exemption for 55-plus housing.

The original exemption required developers to offer elders special services and facilities in these communities in return for the exemption. Over time, those requirements were eliminated and now the only requirement is that these communities exclude families and children.

While lifestyles focused on golf and tennis may be attractive to younger retirees, older Americans often find themselves in communities bereft of the services and facilities they need for basic life activities and safety. The very nature of these communities result in elders left with depreciating homes, and many are without the financial means to retrofit their 55-plus home or to move into a community better adapted for their needs. This Article explores a popular form of “senior housing” that is unsuitable for most older Americans.

Matt Festa

Heintzelman, Walsh, & Grzsekowiak on Open Space Referenda

Martin D. Heintzelman (Clarkson--Business), Patrick J. Walsh, and Dustin J. Grzeskowiak (Clarkson--Business) have posted Explaining the Appearance and Success of Open Space Referenda.  The abstract:

To guard against urban sprawl, many communities in the United States have begun enacting policies to preserve open space, often through local voter referenda. New Jersey sponsors such municipal action through the Green Acres Program by providing funding and low interest loans to towns that choose, through a referendum, to increase property taxes and spend the money raised on open space preservation for the purposes of conservation and/or recreation. Understanding which factors contribute to the appearance and success of these measures is important for policy makers and conservation advocates, not only in New Jersey, but across the United States. Although previous literature has examined this issue, this is the first study to account for spatial dependence/spatial autocorrelation and to explore dynamic issues through survival analysis. The traditional two stage model from the literature is extended by incorporating a Bayesian spatial probit for the first stage and a maximum-likelihood spatial error model in the second stage. A Cox – proportional hazard model is used to examine the timing of referenda appearance. Spatial dependence is found in the second stage of the analysis, indicating future studies should account for its influence. There is not strong evidence for spatial dependence or correlation in the first stage. The survival model is found to be a useful complement to the traditional probit analysis of the first stage.

Matt Festa

Foreign Policy Special Issue on Cities--Focus on China

Foreign Policy recently has published its Special Report "Cities Issue."  While the issue is themed on urban affairs generally, its articles coalesce around the amazing urban development taking place in China.  From the website intro:

Our special issue dedicated to the cities of the future has its eye squarely toward China, because the cities of the future are increasingly going to be speaking Mandarin -- even more than you realize. It's no longer news that China has embarked on the largest mass urbanization in history, a monumental migration from country to city that will leave China with nearly a billion urbanites by 2025 and an astonishing 221 cities with populations over 1 million. But this isn't just about size: It's about global heft. And that's where the scale of China's transformation into a world leader is truly astonishing. In an exclusive index for FP, the McKinsey Global Institute has run the numbers to produce what we're calling The 75 Most Dynamic Cities of 2025 -- an extraordinary 29 of which are in China. Some are already global powers, from top-ranked Shanghai to manufacturing dynamo Shenzhen; others, from Fuzhou to Xiamen, were little more than provincial backwaters in the 20th century but look to be household names in the 21st, powering the global economy not just through their sheer size but also through their urban innovation and pulsing drive. Europe, meanwhile, will manage only three cities on the list by 2025; the United States finishes second to China -- a very distant second -- with 13. Still think that debate about Western decline is overblown?

There are a whole bunch of interesting articles at the website.  Just one that I'll highlight is New Urbanism pioneer Peter Calthorpe's Weapons of Mass Urban Destruction: China's Cities are Making the Same Mistake America Made on the Path to Superpower Status.  Again, there's a whole lot of interesting analysis at the FP Cities Issue website.

Matt Festa

Fascinating 21st Century Real Estate Cases

The New York Observer has a list of the 15 Most Fascinating NY Real Estate Cases of the 21st Century, based on a survey of NYC real estate lawyers.  Although most involve contracts or financing gone awry, a few involve zoning and land use disputes.  They also make use of Sherlock Holmes-esque titles, like "The Case of the Mischievous Mall Developer." 

Of particular interest are "The Case of the Masterpiece & The Condo Ad," involving a dispute over advertising, public art, and landmarking.  The "Case of the Museum and the Architect" involves a building designed by Jean Nouvel next to MOMA, as well as zoning, landmarking and air rights issues. "The Case of the Brooklyn Basketball Arena" gives a very truncated summary of the series of legal battles over eminent domain and the construction of a new arena for the Brooklyn Nets.  (For a more detailed account in response from critics of the development see the Atlantic Yards Report).  And "The Case of the Abused J-51" details the legal battles over rent regulation following the $5.4 billion purchase of Stuyvesant Town.

John Infranca

Bronin & Byrne Casebook on Historic Preservation Law

Sara C. Bronin (Connecticut) and J. Peter Byrne (Georgetown) recently published a new casebook called Historic Preservation Law, Foundation Press 2012.  HP is quickly becoming a central part of land use planning, as the authors make clear in this excerpt from the Preface:

This book was written for anyone interested in the increasingly important area of historic preservation law.  With this book, we hope to advance and encourage the teaching of preservation law, shape the way the field is conceived, and create a practical resource that will be consulted by attorneys and other preservation professionals. 

Our approach to the subject is reasonably straightforward.  We present the most significant legal issues in preservation and place them in a contemporary context, identifying contested questions and areas of reform.  The format of the book is traditional: edited leading cases with notes that provide explanation, extension, and issues for discussion.  Given the interdisciplinary nature of the field, we belive that the legal issues can only be understood in light of historical, aesthetic, political, and administrative issues that make up the larger realm of preservation.  Accordingly, we provide secondary materials, both legal and non-legal.

Because we focus on preservation of buildings and sites, we present preservation as part of land use or urban development law.  Thus, we provide extensive treatment of local preservation law, which regulates private property, as well as relevant issues in real estate finance and project development.  We also provide comprehensive treatment of federal law, including the National Historical Preservation Act and related statutes.  In addition, we explore federal laws that address preservation vis-a-vis cultural property issues, particularly regarding Native American and archaelogical sites.  Preservation has also generated important and interesting constitutional questions related to takings, religious freedoms, and free speech rights, which we address.

This is the first, or at least the most recent, major casebook on the law of historic preservation that I know of.  Professors Bronin and Byrne, who are also accomplished scholars in the land use field generally, have provided us a major contribution with this book, which looks to be *the* significant text in HP law.  Land use scholars and professionals should definitely have this one on their shelves.

Matt Festa

More Buffalo Boosting: Artfarms!

I just can't enough of Buffalo these days. Yesterday, I posted about our "zombieness" and today I learned of something fun being done with some of our vacant land (up to 20% of the land in the city of Buffalo is vacant -- no that is not the same thing as open space). Some Brooklyn-based architects are suggesting we turn the land into artfarms. Never heard of artfarms? Me neither. The architects describe them as sculptures that serve as agricultural grow structures. Urban farming meets local artists.

"These above-ground, vertically designed sculptures will provide a means to produce fruits, vegetables and flowers for the surrounding community, but they will also provide a creative basis for expansion. In essence, the concept of Artfarms is to create and erect devices that are not just aesthetically appealing, but that will serve a greater purpose by triggering redevelopment."

I hope they find some funding and support to make these happen. Nothing tastes better than a local ogranic tomato grown on a structure that belongs at Burning Man.

Jessie Owley

Is Smaller Always Better?

As I mentioned in my first post, I want to use some of my time as a guest-blogger here to introduce a few projects I am current working on through the Furman Center.  Today I want to talk about a fairly new project examining regulatory barriers to the construction of smaller housing units.

There has been significant discussion recently of the benefits of allowing the construction of very small apartments.  In Boston, Mayor Menino has advocated the development of micro-units, smaller than those permitted by current regulations, targeted at young professionals.  As reported on the PropertyProf Blog, San Francisco is exploring ways to reduce existing unit size minimums from 290 square feet to 220 square feet.  In New York, Mayor Bloomberg announced a request for proposals to build an apartment building with units measuring between 275 and 300 square feet (currently units must be at least 400 square feet).  The associated request for proposals for the project has already been downloaded over 1,000 times by interested parties throughout the world. 

Parallel with this discussion of micro-units, a number of municipalities, both large and small, are rethinking regulations governing the construction of accessory dwelling units (ADUs) in single family neighborhoods.  Some communities, such as Santa Cruz, California, have gone further and actively encourage the construction of accessory dwelling units by providing technical assistance to prospective landlords, pre-approved designs, low-interest loan programs, and other resources.  These units, which may be located over a garage or in a basement, offer opportunities for encouraging denser development and urban infill.  They also are seen by some as a way to help seniors maintain their homes or “age in place.”  

Efforts to encourage construction of smaller housing are motivated in part by the recognition that changing demographics and household composition have created a mismatch between demand and existing housing supply.  A recent book, Going Solo:  The Extraordinary Rise and Surprising Appeal of Living Alone, explored the increasing prevalence of single urban dwellers.  New York City’s Citizens Housing Planning Council raised attention to this issue through a recent project called “Making Room,” which enlisted a set of architects to propose different designs for innovative housing types that would meet these changing needs, but would demand regulatory changes in order to be built.  The project recognized that many individuals, who cannot find housing that meets their needs, currently live in unregulated apartments within an underground housing market.  These illegal conversions and other sources of affordable housing can create dangerous living conditions for occupants. 

Smaller units – both in the form of micro-units in a multifamily development and accessory dwelling units in a single-family residential area – hold promise for serving a variety of needs:  providing affordable housing, fostering greater density and more sustainable development patterns, increasing demand for mass transit in an area, and, as championed in Boston and New York, making expensive cities more attractive to young professionals who spend little time at home. 

One supporter of the micro-unit proposal in New York was quoted in the Wall Street Journal as saying that “the city should ‘not be charged with regulating people’s preferences.’”  This is, of course, the deeper question raised by changing the regulatory landscape to permit smaller housing units.  Are these changes simply a matter of removing a (perhaps, to some, anachronistic or paternalistic) constraint on individual preferences?  Or do the laws restricting this housing continue to serve an essential public purpose related to the health, safety, and welfare of residents?  Commentators have noted that the zoning regulations that will be waived to allow the micro-unit prototypes in New York City were instituted in the early 20^th Century to provide more humane living conditions, particularly through greater access to light and air.  But modern construction methods and technology may provide news means to address these same health and safety issues, without returning to dreary and dangerous tenement living.

The discussion about changing regulations to allow smaller housing units is really just one piece of a broader question:  do changes in living patterns, family composition, and technology demand a radical rethinking of the legal framework that governs urban life?  Should the presence of vast amounts of currently illegal housing be seen as an indication that existing regulation is too strict and prevents the market from meeting demand?  Are some regulations championed as serving goals related to health, safety and welfare, really more about the aesthetic or other preferences of existing residents?

To address the narrower regulatory questions raised by compact housing units, the Furman Center has begun a project, in partnership with CHPC, looking at a number of cities throughout the United States and examining regulatory barriers to smaller housing units, as well as efforts currently underway to change regulations or build these forms of housing.  We are planning to study New York; Washington, DC; Austin; Denver; and Seattle, a mix of cities with varying degrees of interest and progress related to these issues.  We will be examining a broad range of existing regulations, including zoning, building codes, accessibility laws, and occupancy regulations, that might prohibit or stymie the construction of these types of housing.  Our goal is to outline the regulatory barriers that policy makers would need to address if they wished to allow more compact housing and to frame the questions that would need to be considered in conducting a more sophisticated cost-benefit analysis of the potential tradeoffs of changing these regulations, some of which may still serve a vital role in making cities more safe and livable. 

John Infranca

California flirts with new environmental review exemptions for infill projects

Anyone who has practiced or studied land use law in a state with a strong environmental review process knows how that environmental review process often comes to override the land use permitting process.  In particular, urban projects have often suffered from an environmental review process that works better for reviewing greenfield projects, and also from more litigious groups of neighbors that use environmental review procedures either to oppose the project, or seek "mitigations" that benefit neighboring property owners.  On the other hand, efforts to ease the environmental review burdens on infill projects often run into a roadblock of environmental groups that believe exemptions for infill projects will likely only lead to more exemptions and a gutting of the entire law itself (the "slippery slope" argument). 

This fight has been ongoing in California, and other states, for decades.  Several infill exemption provisions from the state's California Environmental Quality Act ("CEQA", pronounced "SEE-kwa") look good on paper, but are essentially unworkable if there are litigious parties involved.  Such unworkable exemptions are in the state's landmark SB375 legislation that seeks to link land use and transportation:  the list of requirements for applicability of the exemption apply to, well, about absolutely nowhere.  Another unworkable exemption is CEQA Guidlines section 15332, which is seldom used where litigation is possible.

With the passage of SB 226 in 2011, however, the state is once again taking a hard look at exemptions for urban infill projects.  Under a mandate of SB 226, the Governor's Office of Planning and Research, now headed by Ken Alex, a well-respected former senior assistant attorney general who ran the California Attorney General's environmental division, has drafted a proposed new CEQA Guideline for urban infill exemptions that was released on June 25, 2012 after epic public commenting.  The proposed CEQA Guideline is now going through formal rulemaking processes at the state's Natural Resources Agency. A cheat sheet on the new proposed infill exemption is available here.  If you want to keep up-to-date on the California infill exemption hearings, you can do so by adding your name at this link.

California's purpose for pursuing the infill exemption is now structured in terms of the climate change debate, but decades ago, the need for such legislation was structured in terms of "sprawl" or "smart growth."  We all know that it is harder to build in urban areas than in greenfields, and there needs to be a way to level that playing field and encourage urban infill.  Following this latest effort in California will be a chance to watch this debate unfold once more, and now in the framework of the climate change debate.

Stephen R. Miller

Streamlining Land Use Regulation and Development Review

As reported on Planetizen, Seattle's City Council approved a series of changes to the city's land use regulations on Monday that, it is claimed, "will create jobs and encourage flexibility and creativity in new development."  These changes include an easing of parking requirements for new projects, a higher threshold for the size of projects subject to environmental review, and the elimination of a requirement of ground-floor retail space in certain areas.  Last month, New York City initiated a program aimed at speeding up the land use review process and reducing associated costs for developers.  New York is also considering reductions, in certain areas, of off-street parking requirements for new developments.  (See a Furman Center report on the impact of minimum parking requirements on housing affordability.)   Similarly, Los Angeles recently approved five years of funding for its Planning Department to revise the city's zoning code, part of a broader initiative to streamline development approvals.  

These programs are championed for their benefits in spurring development and increasing predictability. But for critics they threaten to reduce public input and the careful consideration of neighborhood concerns.  It will be interesting to see whether these changes represent a trend, partly motivated by the current economic climate, towards major reforms in city land use regulations and review processes.  If readers know of similar efforts underway elsewhere, please share.   

John Infranca

Gade on Olympic Villages

Check out this interesting article and fascinating slide show on Olympic Villages over the years. As Matt always tells us, everything can be a land use issue and the Olympics are no exception. Many buildings and facilities are erected for each Olympics, and one necessary element is a place to house all the visiting athletes. This slide show of what the housing as looked like over the year (and in some cases what those properties look like still today).

Jessie Owley

Breyer, Chang, and Parandvash on Determinants of Water Use Patterns

In a study of two U.S. cities, researchers found that land use was a strong determinant of water use patterns.

Land-use, temperature, and single-family residential water use patterns in Portland, Oregon and Phoenix, Arizona by Betsy Breyer, Heejun Chang, G. Hossein Parandvash

 Applied Geography, Volume 35, Issues 1–2 (2012) ($) 

Adaptation to climate change requires urban water providers to develop a complex understanding of how temperature affects water use patterns. We used a geographic information system and statistical analysis to compare the spatial relationships among single-family residential water use patterns, land use characteristics, and temperature in Portland, Oregon and Phoenix, Arizona. We developed mean water use patterns at the census block group level using data from 2002 to 2009 in Portland and from 2000 to 2008 in Phoenix. These mean values were used to estimate the localized temperature sensitivity of water use in each census block group through an ordinary least squares regression with summer average air temperature. Taking the slopes of regression estimates as our dependent variable, we examined spatial relationships among temperature-sensitive water use patterns, housing density, impervious surfaces, low vegetation, and tree canopy extent. Temperature sensitive water use was found to be positively correlated with low vegetation and negatively correlated with impervious surfaces in both cities. Tree canopy coverage tends to increase with sensitivity in Portland, while the reverse relationship is found for Phoenix. Regression analysis indicates that building density explained the most variation in the dependent variable in Portland whereas, in Phoenix, the strongest correlations related to vegetation patterns. A comparative approach highlights the complex, localized correlations that exist among local climate regimes, urban landscapes, and water use patterns. Census block group-level water use analyses equips water providers with detailed information on the sensitivity of local water use to temperature variation, which could prove valuable to developing a viable municipal climate change adaptation strategy.

 Jessie Owley

New York City's Proposed East Midtown Rezoning and the Use of TDRs

I am very excited for the opportunity to blog on the Land Use Prof Blog over the next month.  Thanks to Matt Festa and the other editors for inviting me to do so.  As Matt mentioned in his introduction, I am a Research Fellow at NYU's Furman Center for Real Estate and Urban Policy.  For those not  familiar with the Center, we are a joint endeavor of NYU's law and public policy school and we conduct interdisciplinary legal and empirical research on land use, affordable housing, housing finance, neighborhood change, and a host of other urban issues.  Although we particularly focus on issues in New York City, we are increasingly pursuing projects in other cities and working on national affordable housing and urban policy issues.

My plan during the next month is to talk about a few interesting projects I am pursuing with the Furman Center, a few of my personal research projects, and of course to write about new land use issues. 

For this first post, I thought I would discuss one of the big land use issues on our radar here in New York, Mayor Bloomberg's recent proposal to rezone a significant part of East Midtown Manhattan, in the area around Grand Central Terminal.  Over the past decade the Bloomberg administration has dramatically altered New York City's zoning through over 100 rezonings affecting approximately one-quarter of the city's land.  This new proposal, which includes changes in the rules governing the use of the air rights/transferable development rights over Grand Central (the rights at issue in Penn Central, only a fraction of which have been sold) raises a number of interesting issues and questions.

The proposed rezoning (see the Department of City Planning study presentation) covers 78 blocks and seeks to encourage the development of more modern and taller office buildings in an area where the average office building is currently over 70 years old.  The proposal would allow new buildings substantially taller than what currently exists in the area and potentially as large as the Empire State Building.  These new buildings, which would only be allowed on sites that cover a block's full frontage on one of the area's avenues, would provide larger floor plates, fewer internal supports, and other amenities the City feels are needed for the area to stay competitive with business districts in "global competitor cities."

What is particularly interesting is that -- rather than simply upzone the area to allow these larger buildings -- developers would be able to obtain greater densities (through a higher maximum floor-area-ratio) as-of-right (meaning no required city planning approval process) only by either purchasing transferable development rights (TDRs) from nearby landmarks (the major seller being Grand Central, which has nearly two million square feet available) or by obtaining a bonus in exchange for a contribution to a City fund dedicated to area improvements.  Beyond these as-of-right FAR increases, even taller buildings (close in size to the Empire State Building) could be constructed, but would be subject to a Special Permit process, which would include a design review and would require certain public improvements to be provided. 

The proposal raises a host of issues.  If additional density is desirable in the area, why not simply rezone, rather than require the purchase of TDRs on the private market or contributions to a City fund? Is the City simply selling an upzoning or demanding an exaction from developers?  And of course, for area residents and workers and potential developers other concerns exist:  what effect would these new buildings have on the nearby subway, which already operates above capacity, and how much will it cost to buy these additional square feet of permitted development?

The proposal is also interesting because it represents the latest example of the City's creative use of transferable development rights, a tool that in New York has historically operated in a manner akin to density zoning or, in the case of landmarks, as a means of mitigating the effects of development restrictions.  These new programs in New York use TDRs instead as a means of furthering traditional and quite specific planning and land use goals in a manner more akin to how TDRs have been used in suburban and rural areas nationwide.  The City's proposal builds upon the use of TDRs in the rezoning of West Chelsea, site of the elevated High Line Park, and at Hudson Yards, an area west of Penn Station in Midtown Manhattan.  Both these districts involve the innovative use of TDRs to serve a variety of planning, preservation, and development goals.  Vicki Been and I will be exploring these themes further in a forthcoming article. 

At the Furman Center, we are also nearing completion of the first comprehensive database of TDR transactions in New York City.  We have recorded data on over 400 of these transactions between 2003 and 2011 and have begun reviewing the data to learn more about the market for TDRs in New York and how developers use them in place or in addition to other tools for increasing the size of a project.  I plan to say more about this data, our plans for it, and its relevance for thinking about TDRs in other cities in a future post.

 John Infranca

 

CUNY’s CUER

There is a lot of exciting stuff going on at CUNY these days. Not only have they got themselves a shiny new campus in Long Island City, the just inaugurated their new Center for Urban and Environmental Reform (CUER –pronounced “cure”). Headed up by Rebecca Bratspies, this new center is one of the few places engaging specifically with urban environmental issues. Such an endeavor necessarily involves land use issues. I was lucky enough to be invited to CUER’s inaugural scholar workshop. Titled a “Scholar’s Workshop on Regulating the Urban Environment,” the event brought together scholars from multiple disciplines as well as activists and policy makers. It was an interesting format for an event and I enjoyed hearing from architects, historians, geographers and others. I think we’ll be seeing a lot of interesting events and endeavors from this new center. I know I will be keeping my eye on it.

Jessie Owley

Letters from the field: Buying a share of utopia in Copenhagen

I’ve just returned from several weeks of travel, and thought I’d post on several items I saw along the way.  The first of these was a utopian community in Copenhagen, Denmark, called Christiana.  Christiana is on an island, Christianhavn, adjacent to the central city of Copenhagen that had been used for military purposes for centuries.  When the Danish military closed a base on the island in the Sixties, some freedom-loving hippies and other radicals set up shop  by squatting on the land, declared their independence from the Danish state (adverse possession is for sissies, apparently), refused to pay taxes, and otherwise have engaged in community- and ganja-based decision-making ever since.  About 1,000 residents now call Christiana home.

There are several aspects of Christiana that I think land use folks will find interesting.  First, after four decades of tolerating open rebellion in its midsts, the Danish government finally decided that it needed to do something about Christiana.  You might be anticipating a “throw the bums out” approach; but remember, this is Denmark, not Rudy Giuliani’s New York City.  Instead of mounting riot troops at Christiana’s borders, the Danish government sent in their lawyers with an ultimatum:  Christiana’s residents could stay, but they would have to buy the land from the Danish government.  But the Danish government did not demand the market price for the property; instead, they offered the property to Christiana’s residents for a song.  In a sense, all the Danish government is seeking to do is to legitimate the ownership of the land; in other words, if Christian’s residents “own” the land, there is some acknowledgment of the government’s control and sovereignty over that land.  But, of course, the Christiana residents disdain this idea of ownership even though they need to raise capital to purchase the land.  

The result has been one of the most peculiar of solutions:  a stock offering of nominal ownership that investors can purchase. 

As the New York Times described it:

[Christiana's residents] decided to start selling shares in Christiania. Pieces of paper, hand-printed on site, the shares can be had for amounts from $3.50 to $1,750. Shareholders are entitled to a symbolic sense of ownership in Christiania and the promise of an invitation to a planned annual shareholder party. “Christiania belongs to everyone,” Mr. Manghezi said. “We’re trying to put ownership in an abstract form.”

Since the shares were first offered in the fall, about $1.25 million worth have been sold in Denmark and abroad. The money raised will go toward the purchase of the land from the government.

I found this struggle over the idea of ownership to be fascinating.  After all, the amount the Danish government is seeking from Christiana is far below the market price of the land in the now trendy area of Christianhavn.  However, what the government is doing is forcing the utopian community out of its stance of declaring “independence” from the Danish state, while Christiana’s residents attempt to use arcane legal structures to avoid sullying their hands with the prospect of “ownership.”  Am I the only one who thinks of Johnson v. M'Intosh on these facts?

The second interesting issue in Christiana was a poster located on the community’s main meeting room, which establishes the community’s “common law.”  A picture is to the right.  Now, at first blush, this will not look much like common law, but rather a visual statutory scheme, or maybe even something like the Ten Commandments if written for a biker gang.  But it was the kind of rules that interested me:  they speak, I think, to the kinds of problems that must have evolved in Christiana over time:  hard drugs, biker’s colors, firearms, and so on.  Each of these rules, you can imagine, resulted from a particular incident, and so a “common law” evolved in this place where all decisions are made collectively.  Such a common law speaks to the potentially rough nature of standing as a state independent from the protection of the sovereign.  It made me think of the devolution of all of the United States’ utopian communities, from New Harmony on down.  Is such a slide into anarchy, or the fight against anarchy, inevitable in such utopian movements?  I don’t know, but Christiana remains, and it seems to continue to thrive despite its troubles.  It eeks out a living on the sale of rasta trinkets and “green light district” paraphernalia.  And even in this space where there is supposedly no sovereign, there is still some law, borne of hard experience, common to all.  Its future, cast somewhere between lawfully-abiding property owner and anti-property ownership crusaders, between freedom and the "common law's" protections, will be interesting to watch in the coming decades.

Stephen R. Miller

The Death and Life of Affordable Housing--panel video

Via Congress for the New Urbanism, I came across this link to what looks like a great panel discussion hosted by the Cato Institute and cosponsored by Next American City, called "The Death and Life of Affordable Housing."  Here is the link to the video.  The session features a terrific lineup of thoughtful commentators.  From the event description:

Featuring Ryan Avent, Author of The Gated City; Adam Gordon, Staff Attorney, Fair Share Housing; Randal O'Toole, Senior Fellow, Cato Institute, and author of American Nightmare: How Government Undermines the Dream of Homeownership; Matthew Yglesias, author of The Rent Is Too Damn High; moderated by Diana Lind, Executive Director and Editor-in-Chief, Next American City. . . .

The Cato Institute and Next American City will jointly host a panel discussion about housing and development policy in American cities. For several decades, U.S. policymakers have grappled with how to make housing more affordable for more people. In the past year, several new books have claimed that various government tools, such as zoning and subsidies, have limited people's access to desirable, affordable housing—while other leading thinkers have suggested that markets alone will not create socially, economically, and environmentally sustainable communities. With a shared goal of creating livable, affordable communities for all people—but diverging ideas of how to get there—the panel will give voice to a range of perspectives on the hotly debated issue of how to shape 21st-century American cities.

I plan to check it out this weekend.  Enjoy,

Matt Festa