Mayor Eric Adams’ “City of Yes for Housing Opportunity” zoning initiative, widely embraced for its focus on housing production, also contains a valuable tool for preserving the city’s past. A new framework for landmark development rights transfers will facilitate the preservation of the city’s historically significant buildings while expanding opportunities to enhance the development potential of neighboring sites.
The city’s zoning ordinance has for several decades contained a mechanism to allow owners of designated landmarks to sell their unused development rights to neighboring sites. Known as the “Landmark TDR” program (“TDR” is shorthand for “transferable development rights”), the mechanism was created in the 1960s to help offset the special financial burdens imposed by a landmark designation. The program was rarely used, yielding fewer than 15 transfers over the course of more than 50 years.
The efficacy of the original Landmark TDR program was limited by both geographic restrictions and onerous review procedures. The transfer mechanism was available only to individual landmarks located outside historic districts and within mid- and high-density zoning districts. Transfers were allowed only to “adjacent lots,” meaning zoning lots that were contiguous with, directly across the street from, or diagonally across an intersection from the landmark zoning lot. Transfers also required a City Planning Commission (CPC) special permit, making them subject to discretionary land use and environmental review processes that added time, cost, and uncertainty.
One goal of City of Yes was to make it easier for owners of landmark buildings to sell their development rights, to bring in urgently-needed funds and help their neighbors develop more housing. The changes expand the pool of eligible landmark and receiving sites and reduce the regulatory barriers to transactions. The changes are intended to facilitate housing production, but allow the transferred developed rights to be utilized for any permitted use.
The potential impact of an effective landmark TDR mechanism is considerable. The Landmarks Preservation Commission website reports that there are 1,464 individual landmarks in the city, representing tens of millions of square feet of potential development rights. Many of these landmarks do not utilize all of the floor area that is available to their sites under zoning and cannot do so because of development restrictions imposed by the city’s Landmark Law.
The new landmark transfer framework relaxes the geographic restrictions of the original program in two respects. First, the transfer mechanism is now available to individual landmarks in all zoning districts throughout the city, including in historic districts. Second, the universe of eligible receiving sites for a landmark transfer is significantly larger.
Specifically, floor area may be transferred from a landmark zoning lot to any other zoning lot in the “surrounding area,” which generally includes zoning lots located on the same block as the landmark and most zoning lots located across a street from the block containing the landmark.
The procedural barriers to a landmark transfer have been relaxed as well. Transfers now will require only a CPC certification, rather than a more complex and costly special permit. Bulk modifications may also be granted to the receiving site to accommodate the additional floor area, by either a CPC authorization or CPC special permit. The new framework is not without its issues.
For most receiving sites that acquire development rights from a landmark, the amount of transferred floor area may not exceed the basic maximum floor area under district regulations by more than 20 percent or, in certain high-density districts, 30 percent. Because of this restriction, in some cases the owner of a landmark may not be able to transfer
enough development rights in a single transaction to recoup the costs of meeting the regulations’ continuing maintenance obligation. Still, the framework improves upon its predecessor, under which the 20-percent limitation applied even in high-density districts.
City of Yes for Housing Opportunity has changed the landscape for these landmark sites and their neighbors. Property owners would be wise to take notice.
Adam Taubman is special counsel at Kramer Levin Naftalis & Frankel.
