Broken Promises: Affordable Housing Lost, Not Gained, Since SoHo/NoHo Rezoning

By Phyllis Eckhaus

Despite city promises to the contrary, the controversial SoHo/NoHo/Chinatown rezoning plan passed by the city council in 2021, has yet to build a single unit of new housing, affordable or otherwise. Also contrary to city promises, at least eight rent-regulated housing units have been destroyed.

Speaking before the Community Board 2 Land Use and Housing Committee on November 12, Village Preservation Executive Director Andrew Berman recounted in relentless detail the city’s broken promises and systemic failures. His presentation expanded upon a Village Preservation report issued in May, The Rezoning of SoHo/NoHo/Chinatown: Taking Stock at the One-Third Mark.

Berman recalled that the city had pushed for the rezoning—dramatically increasing what developers could build “as of right” (without special approval) by arguing that “there was not enough housing being produced in the rezoning area and that it needed to change the zoning regulations to stimulate the production of more.”

The city’s rezoning plan predicted that within 10 years, the rezoning would result in the construction of 1,829 new housing units. Now four years in, Berman noted one could expect 732 units to have been built rather than zero units.

Further undercutting city claims that rezoning had been necessary, Berman declared that “in the four or so years preceding the rezoning, we counted over a dozen new residential developments in the rezoning area, containing hundreds of units of housing, mostly within historic districts.” The city had argued that “it’s especially hard to create new housing in historic districts in general, and in particular in these historic districts” within the rezoning area. Yet, according to Berman “almost all the new housing construction prior to the rezoning took place in the historic districts.”

And the lack of housing production in the rezoning area can’t be explained away by an overall downward trend. Describing the city’s current housing production as “exceedingly robust,” Berman cited analysis from the state comptroller’s office that “during the past four years, housing production in New York City has reached highs not seen in decades, with 38,000 units produced in 2024.”

Perhaps most disturbing, the city had projected the SoHo/NoHo rezoning would result in the development of “affordable housing” units, renting below market rate (but not necessarily affordable to average NYC renters). The prediction was 382 to 575 affordable housing units over 10 years.

“That should mean between 153 to 230 units of affordable housing would have been produced by now,” Berman remarked. “Of course, the number of units it has produced so far is exactly zero.”

Another broken city promise is that “no existing regulated affordable housing would be destroyed to make way for new development enabled by the rezoning.” In fact, Village Preservation has documented the loss of eight rent-regulated units but “there may well be considerably more lost.”

“Another promise was that all new housing development would have some affordable housing within it,” Berman said. “Yet we’ve documented multiple new developments allowed by the rezoning” that would not have been allowed previously, “which have zero affordable housing attached to them.”

He gave the example of planned development at 40 Wooster Street, “a six-story commercial building, which is going to be converted into a four unit residential project, consisting of full floor and duplex luxury apartments, including one with its own private pool, and this conversion would not have been possible without the rezoning. None of the units will be affordable.” The dimensions of the project’s ground floor retail space, which the new zoning requires, leaves the new floor area “just shy of the…residential space that triggers the affordability requirements,” Berman noted. “We repeatedly pointed out this loophole during the rezoning process and the city just refused to acknowledge that this was an issue.”

“Another example is 142 Greene Street, which is to be converted to a single-family mansion with no affordable housing component,” Berman continued. “The building once contained multiple joint live-work quarters for artists, and under the old zoning this was not something that you would have been able to do.”

He described development plans for 242 Bleecker as “kind of a twofer. In addition to eliminating the existing rent regulated units, it will have no on-site affordable housing and will instead choose to pay into a fund that has not yet been established and has never built a single unit of affordable housing.”

A further broken promise is that affordable housing would be “completely integrated” into developments with market-rate housing. Berman reminded the committee that it had recently seen “the first case of…what could be called a poor building,” a planned development where “the required affordable housing units are completely segregated from the market rate units,” each in entirely separate buildings.

“Now, this was an issue that we and others raised during the rezoning process with the city. They said that while it was technically possible that somebody could do this, it would never happen. Of course, it is in fact now happening,” Berman lamented.

Berman observed that the lack of affordable housing construction could get even more stark if New York University succeeds in its legal challenge to the provision of the rezoning that prohibits most private university expansion. Private universities are exempted from affordable housing requirements.

He underscored that even if the city’s predictions and promises were fulfilled, with all projected affordable housing being built, the ultimate impact would be to make our neighborhoods “wealthier and more unaffordable” than they were before rezoning, “because 70 to 80 percent of the new housing…would be market rate” or “unaffordable to about 90 percent of current neighborhood residents.”

Berman counseled Villagers to carefully scrutinize whatever the city is proposing and to insist that land use debate go beyond city planning predictions because their track record is “terrible.”

Could the city’s prediction process be improved? Berman responded that the city’s extraordinarily flawed process follows legal requirements with built-in erroneous assumptions, for example that buildings with rent-regulated units are inherently protected from becoming development sites. He noted that nothing prevents the city from adding an extra layer of analysis to correct for flaws in its process.