Opinion: NYC’s residential floor area ratio cap must go

New York City’s 1916 zoning code, the nation’s first, was estimated to provide enough housing for a city of 55 million people. In the 1920s, the city saw the construction of almost 750,000 units of housing. It was a time when New York City was growing at an astronomical pace and meeting the demand. Today, that trend has all but stopped. Several factors contributed to the rapid decline in new construction, but the 1961 zoning code is the biggest culprit, as it significantly reduced the city’s zoned capacity to just 12 million people. Additional practices like contextual zoning and landmarking have further reduced the influx of new housing in New York City. While all of the above are local regulations, there is one statewide policy that is preventing our city from effectively housing all of our residents: the residential floor area ratio cap.

Floor area ratio determines the density of a building, measuring the ratio between the square footage of a building and the square footage of its respective lot. (A 20,000-square-foot building on a 4,000-square-foot lot would have a floor area ratio of five) It is the foundational element of our zoning code. And in 1961, the state amended the 1929 Multiple Dwelling Law, putting a cap on residential development and barring new buildings from exceeding a floor area ratio of 12. So any residential development built on that 4,000-square-foot lot cannot be larger than 48,000 square feet.

Thanks to the floor area ratio cap, and many other mid-century initiatives, new housing construction has slowed to a crawl. It might feel like New York is in the middle of a building boom, but the city permitted only 185,000 new units of multifamily housing in the 2010s while the population increased by over 600,000. The lack of new construction has caused a significant strain on the housing market, spelling trouble for renters across the city. Even with pandemic departures, vacancy rates in 2021 were at 4.5%, remaining below the 5% threshold that denotes a crisis. One in 3 renters spend more than half their income on rent. The need for a massive influx of new housing is desperate, and repealing the cap is one of the ways to get there.

Repealing the floor area ratio cap is not an immediate switch – the city would still have to adjust its zoning documents to implement the change. But it would finally put the city in the driver’s seat and open many avenues for us to provide far more housing.

Take, for example, some of our existing commercial districts. The densest commercial districts have a maximum allowable residential density at the cap. However, the maximum allowable floor area ratio for commercial development in those districts is 15, 25% higher than permitted residential densities. In these high-density districts, repealing the cap would allow us to have residential densities that match those of commercial buildings. Our residential districts also stop at the cap. Removing the cap could allow us to permit new developments with affordable housing to have a floor area ratio of 15 or even more. It is not just the prospect of significantly more new housing that makes lifting the cap appealing. It is the flexibility and creativity that we have in shaping our policy.

Then, the most crucial step would be integrating these changes into our inclusionary housing initiatives, which would significantly strengthen the program. Increased supply of market-rate housing does help alleviate strain on supply, and it is a necessary asset in alleviating our housing crisis. However, affordable housing is far more pressing, and we would have to integrate affordability requirements into these new districts. Under the existing inclusionary housing program, developers earn a density bonus if they include 20% affordable housing. Today, the floor area ratio cap limits how much affordable housing we can get from programs like this. More importantly, however, it impacts the feasibility of deep affordability. With increased densities, we get more affordable housing overall, and we can also reserve these units for individuals and families with lower incomes. The 130% area median income option in mandatory inclusionary housing wouldn’t be needed with such high flexibility, and income bands below 60% area median income could be invoked more often.

Opposition to the floor area ratio cap repeal lies predominantly with preservation groups, arguing that such a move would threaten the character of historic districts. They also argued that the cap would only accelerate the proliferation of supertall towers like those seen along 57th Street. The supertalls in question, however, emerged not just from our existing high-density districts but through other loopholes such as mechanical voids. Similarly, the actual problem with those towers is not their size but rather what goes inside. Our existing framework incentivizes these pencil-thin towers with more floors than apartments. If we permit higher densities, have proper affordability requirements and close the necessary loopholes, our potential future supertalls will become exactly what the city needs.

Ironically, our zoning would more accurately reflect the built environment without the floor ratio cap. The cap was implemented after most of the city’s buildings were already built. As a result, the cap would render many of the city's most celebrated buildings illegal. The Majestic, San Remo, El Dorado and Beresford along Central Park West are some of the city’s most coveted historic residences. All of them exceed the cap, along with around 200 other landmarked buildings. In 2016, The New York Times estimated that 40% of the buildings in Manhattan exceed their existing zoning. Once again, these buildings are predominantly in wealthier historic neighborhoods like the Upper West and East Sides, Gramercy and Kips Bay. We should not want to uphold policies that render much of our iconic skyline and celebrated buildings illegal.

Other entities, like the Regional Plan Association, have called for the repeal of the floor area ratio cap in years past. Last year, Gov. Kathy Hochul expressed interest in lifting it as well. Although she backed down from that proposal, her reelection paved the way for her to pursue this radical overhaul of our housing laws once again. Now is the perfect time for her to push for the repeal of the floor area ratio cap. And there are many other policies we can enact to add more affordable homes and to keep people in their homes. The universal legalization of accessory dwelling units would allow property owners to rent out small spaces on their property to provide additional units. This would be a boon for seniors looking to downsize and stay close to their families or for young people who just need a small place to start. Transit-oriented development would increase new housing along our robust transit networks, helping fight climate change while welcoming new neighbors. And tenant protections like good cause eviction will finally bring stability to countless renters who have faced predatory landlords with impossible-to-meet lease renewals. There’s a tremendous amount to do, but in a housing crisis as severe as ours, we cannot accept any policies that limit housing production. Repealing the floor area ratio cap is a crucial step in the right direction.