Is NYC’s Affordable Housing Policy An Exaction?

September 7th, 2014

The Times reports that Mayor de Blasio’s new housing policy–crafted with the assistance of LawProf Vicki Been–would require the construction of affordable housing units in exchange for any zoning change.

In the most forceful remarks yet of an administration determined to reshape the cityscape, Mayor Bill de Blasio’s top planning official declared on Friday that affordable units will be a requirement for any future real estate project requiring a zoning change from the city.

The mandate will apply not only to neighborhood-wide redevelopments, like the earlier transformation of industrial Williamsburg into a residential mecca, but also to individual projects, as when a developer needs a waiver to graft stories onto an apartment tower in Midtown.

“You can’t build one unit unless you build your share of affordable housing,” Carl Weisbrod, chairman of the City Planning Commission, told a packed room of landlords, planners and investors at a New York Law School breakfast on Friday. “You can’t build just market-rate housing, period.”

It’s unclear whether this policy applies to all zoning changes, large or small.

Surprising some audience members, Mr. Weisbrod said the requirements would apply not only to neighborhood-wide residential zoning changes, but also to virtually every apartment project of six or more stories that city planners must approve. (Projects not requiring a rezoning would still be allowed to rise without adding affordable units.)

So would this run afoul of the Nolan/Dolan line of cases? In short, is there an “essential nexus” between the “legitimate state interest” in promoting affordable housing, and the refusal to otherwise grant zoning permits to build? If so, how good of a fit is that nexus.

I suppose, in NYC it won’t matter much. Assuming there is an exaction, the city simply won’t hand out the zoning permit, and nothing will get built. But, this may be a viable suit if a pre-existing structure seeks a zoning change, and NYC wont grant it, unless existing units are converted over to below-market rates. That could provide a vehicle for a suit.

Stay tuned.