Growing pains on the east side stories to watch in 2016

An uptown construction boom and Mayor Bill de Blasio’s push to rezone the city are among the biggest real estate developments this year that stand to have major implications looking ahead to 2016.

Recently completed residential mega-towers on the East Side, like 432 Park Avenue, at nearly 1,400 feet, join other projects in the area that are currently being worked out, like the 900-foot luxury residential project on East 58th Street in the sleepy neighborhood of Sutton Place.

Add to these the major residential projects currently being built on the West Side, like 217 West 57th Street at 1,522 feet and 111 West 57th Street at 1,438 feet, as well as luxury residential towers further uptown on both sides of the park, and it’s hard to argue with the notion that less vertically impressive neighborhoods are poised to go through a growth spurt.

“It’s about to get a lot more crowded,” Councilmember Ben Kallos told Our Town of his district on the Upper East Side.

City council members are also in the midst of discussing a pair of initiatives from the de Blasio administration to increase affordable housing. His mandatory inclusionary housing plan would require certain new construction projects to include permanently affordable housing with a goal of creating 80,000 units and preserving another 120,000.

His Zoning for Quality and Affordability plan aims to increase affordable housing by providing increased incentives – raising height caps and eliminating some parking requirements - for developers to build additional new low- to mid-income and senior housing units. But de Blasio’s proposals have also stoked fears that rezoning in many of the neighborhoods will inevitably speed the pace of gentrification.

“We have come out very strongly against ZQA,” said Andrea Goldwyn, Director of Public Policy for the New York Landmarks Conservancy.

Both ZQA and mandatory inclusionary housing have proved to be largely unpopular among the city’s community boards, and four out of five borough presidents rejected ZQA. The City Planning Commission recently held hearings on both proposals and officials have said they’re likely to undergo changes before a vote in the council is held, which must occur by early April at the latest.

De Blasio said he’s been touring different parts of the city in support of his proposals while gathering input and feedback from many areas that had rejected his overall plan. He admitted earlier this month that part of the reason it’s met with backlash is that, “we’re not explaining it well enough.”

Goldwyn said ZQA, as it’s currently written, “increases building heights in areas where residents and building owners thought they had certainty for what kind of building would be going up on their block.”

“We’re very concerned about the contextual zoning protections that neighborhoods fought for over years,” she continued. “Block by block, community by community, are being changed all at one time in a one size fits all plan that doesn’t really take into effect all of New York’s scenic communities.”

Kallos said in his district that every four- to six-story brownstone located on an avenue is about to become “unlimitedly high.”

“The mid-block is safe, the mid-blocks are all capped at 75 feet,” said Kallos, who touted a joint effort by himself, Manhattan Borough President Gale Brewer and State Senator Liz Krueger to insure ZQA would not raise mid-block building heights in the district.

“But on First Avenue, Second Avenue and Third Avenue, which are all very valuable now that the Second Avenue Subway is opening, the buildings are [zoned] R-10, which is the maximum density allowed under the law, they get a [Floor Area Ratio] of 10, and they can be as tall as they want to.”

“And with the ZQA they will be even taller,” he added. “And when people say there’s nothing we can do, that’s not true.”

Kallos is working to mobilize the Sutton Place community to get a zoning text amendment that would rein in the planned 900-foot condo tower in the neighborhood. He’s also held informational meetings and appeared on TV shows to raise awareness for his zoning efforts, and has put city council funds towards studies by groups like Friends of the Upper East Side Historic Districts and Civitas t0 examine how contextual zoning could be implemented in the district.

“I’ve been trying to talk to people on the East Side between 59th and 96th about bringing contextual zoning to the avenues,” said Kallos. Contextual zoning would limit buildings on the avenues from exceeding 210 feet, he said.

“There’s more development happening on the Upper East Side than other communities in Manhattan combined,” said Kallos. “Right now, the Upper East Side…is a part of the city that has a strong middle class. We have four-, five- and six-story brownstones filled with affordable housing and these buildings are being razed, people are being displaced en mass with nowhere to go, and the middle class is being squeezed out in favor of ultra luxury developments…and that’s a problem.”

And yet there are indications, at least in the residential mega-tower market, of a coming slowdown. The Real Deal reported there are currently 18 buildings on the market with prices averaging in excess of $3,000 a foot, and that sales are notably slow at flagship luxury residential towers like One57 on Billionaires’ Row and the Woolworth Building downtown.

“My personal view is that, in this cycle, we have passed the top,” said Mike Naftali of the Naftali Group, one of the city’s top developers, according to the Real Deal. “For those who think that it will continue to go up – that if they have something that is selling for $3,000 a foot today, it will sell for $4,000 a foot tomorrow or a year or two years from now – I don’t see that happening. There is definitely a slowdown in the velocity of deals.”

The Real Deal piece quoted several other top developers, including JDS Development CEO Michael Stern, the firm behind 111 West 57th Street, making note of a drop-0ff in sales activity in the luxury residential market, with Stern even referencing, “rumblings of a market bubble.”

Goldwyn of the New York Landmarks Conservancy also noted that larger residential projects could put a strain on local schools and transportation infrastructure.

“In some cases there are density concerns, and this is something I think any New Yorker would be concerned about, that when you’re putting in a new, much bigger building, can the infrastructure handle the influx of new people?” she said. “I think what might be surprising is there are also a lot of protections - historic districts, contextual zoning – and it might be that people thought that their neighborhoods had certain zoning protections so that they wouldn’t be seeing buildings like that, and yet the market is pushing it and they are.”