Development of the area around Penn Station, known as the Penn District, has been stalled since June 2023. Now with innovative thinking from some of Manhattan’s elected officials and construction unions, there’s a proposal that could re-start the project while responding to a city crisis: the need for more housing.
Gov. Kathy Hochul, who has near-unilateral power to reopen the general project plan, should seriously consider this approach. Neighborhoods like Lower Manhattan that have woven residential living into their commercial fabric have demonstrated remarkable resilience — a quality that benefits businesses of all sizes and the community at large.
Assemblyman Tony Simone’s proposal marks a significant shift from the current plan, which envisages constructing 10 skyscrapers predominantly for commercial use. Instead, Simone proposes a mixed-use complex with a healthier balance — approximately one-third residential and two-thirds office spaces. This revamped plan, supported by Manhattan Borough President Mark Levine and City Councilman Erik Bottcher, along with preliminary nods from community boards 4 and 5, would significantly increase housing availability in the area, allowing for 5,000 housing units compared to the 1,800 currently planned.
New York will need to build 560,000 housing units by 2030 to keep up with its expected population and job growth, according to a 2022 report from the Real Estate Board of New York.
Of course, such a transformational change at Penn would hinge on the cooperation of key stakeholders, particularly Vornado Realty Trust, which owns or has a controlling interest in five of the eight parcels in the current project plan. At one time, then-Gov. Andrew Cuomo proposed allowing Vornado to erect office towers in the area and using the tax revenue generated to fund the rehabilitation of Penn Station. His successor, Hochul, “decoupled” the proposed $7 billion-to-$10 billion station improvements from the surrounding project plan. Since then, progress has stalled, with Vornado adopting a wait-and-see approach amid fluctuating demand for office spaces influenced by persistent work-from-home trends and climbing interest rates.
The Simone proposal asks the governor to reopen the project plan, alter the zoning to include housing and other uses, and work with existing landowners rather than rely on seizing some properties by eminent domain for redevelopment as rail uses.
Last year at this time, Vornado’s CEO Steven Roth proposed installing temporary tennis courts on one of the sites, the block-long former home of the Hotel Pennsylvania on 32nd Street, until the conditions are right to build again. He predicted the Penn District will be hot “five years from now.” This cautious optimism, while pragmatic, underscores the need for a more immediate and adaptable solution.
A likelier bet would be on a mixed-use development near a major transit hub. It’s a more responsive strategy to current market demands and the city’s needs. This isn’t 2019 anymore. The landscape of work and urban living has transformed dramatically. New York’s recovery and growth depend on our ability to adapt and plan realistically for the future.
Let’s look up from that old playbook and take a realistic view of what New York needs today.
