Mayor Eric Adams’ administration is taking steps to limit the growth of last-mile delivery warehouses in the city, a move that faces opposition from the real estate industry but support from neighborhood groups who say the huge facilities have worsened traffic and pollution.
The Adams administration filed plans this month to require a special permit to build the large-scale package delivery hubs. The proposal, which faces a monthslong public review, makes good on a promise that the administration made to City Council members last year to help win their votes for the City of Yes for Economic Opportunity Plan that loosened zoning rules for businesses.
The warehouses, where retailers like Amazon and Walmart sort packages before delivering them to people’s homes, have spread rapidly in recent years amid the rise of e-commerce — with about 50 large last-mile facilities now operating in the city. The proposal would curb their growth by creating a new zoning category for “parcel delivery facilities” and requiring developers to apply for a special permit for any warehouse larger than 50,000 square feet or within 500 feet of a residential district.
About seven new last-mile facilities would open in the city by 2035 if the rule change is approved, down from 10 under current zoning, according to a projection by the City Planning Department — although the city acknowledged that estimate is rough. The facilities are already limited to industrial areas under current laws, and are concentrated in areas such as Maspeth in Queens, Greenpoint and Red Hook in Brooklyn, and the South Bronx.
Opponents of the policy warn that it would stifle a rapidly growing, job-creating industry — comparing it to the similar 2021 hotel text amendment that has mostly stopped the construction of new lodgings. Basha Gerhards, senior vice president of planning for the Real Estate Board of New York, said in a statement that “the industrial sector plays a vital role in the city’s economy and provides thousands of jobs to hard-working New Yorkers.
“The city cannot afford another significant policy misstep like the citywide hotel special permit,” she said.
Although the city’s existing 50 last-mile warehouses would be grandfathered in, the text amendment could jeopardize a few projects already in the pipeline. At least four warehouses larger than 50,000 square feet are currently in the planning stages, according to a market study the city commissioned — including projects by UPS and RXR in Red Hook, another by Prologis in Greenpoint and a NorthPoint Development site on Staten Island.
The charge to regulate the warehouses was led by council members including Brooklyn’s Alexa Avilés, whose district in Red Hook and Sunset Park includes a half-dozen of the facilities. She told Crain’s last year that they have worsened the neighborhoods’ traffic and air quality, without any effort by the city to track the warehouses’ spread.
“The impacts here are basically hundreds to potentially thousands of trucks additionally a day, in a manufacturing district that is already mixed with residential,” she said.
City Planning will gather public input at an April 24 public info session and May 6 scoping meeting, before beginning the seven-month review process for land-use changes. The Real Deal first reported on the department’s recent filings.
City Planning spokesman Casey Berkovitz said the plan would improve how the city regulates package deliveries.
“We have carefully studied the functions, impacts, and locations of ‘last-mile facilities’ in New York — including consultation with council members, industry, and advocates, including a number of site visits — and our proposal carefully balances the important role that industrial logistics play in the modern economy with the need for clean air, safe streets, and quieter neighborhoods,” he said.
Under the new rules, the City Planning Commission would decide whether to grant a permit after considering a warehouse’s environmental impact on nearby residents, whether it is concentrated too close to other facilities and whether it would worsen traffic. Besides the exemptions for smaller warehouses, the city would also exempt last-mile facilities if they rely mostly on water-based deliveries rather than using trucks.
About 45,400 people are employed by the last-mile logistics center, according to the city’s market report. But the new rules could have a more limited impact since the warehouses’ spread has slowed in recent years: although about two last-mile facilities opened each year from 2010 to 2022, only three new ones opened between 2023 and 2024.
Amazon operates nearly 30% of New York’s warehouses larger than 50,000 square feet, according to the study. FedEx and UPS run most of the remaining large warehouses.
