New York Law Review

Tag: Incentive Zoning

  • Asian Americans for Equality v. Koch, 72 N.Y.2d 121 (1988): Upholding Zoning Amendments and Incentive Zoning

    Asian Americans for Equality v. Koch, 72 N.Y.2d 121 (1988)

    A zoning amendment is valid if it is adopted for a legitimate governmental purpose, bears a reasonable relationship to achieving that purpose, and accords with a well-considered plan for the development of the community, even if it does not guarantee specific outcomes such as low-income housing in a particular area.

    Summary

    Asian Americans for Equality challenged a New York City zoning amendment creating the Special Manhattan Bridge District in Chinatown, arguing it would displace low-income residents. The New York Court of Appeals upheld the amendment, finding it was enacted pursuant to a well-considered plan, and that the city has no obligation to zone specific areas for low-income housing. The court distinguished this case from exclusionary zoning cases, emphasizing that New York City, unlike suburban communities in those cases, already provides a variety of housing opportunities. The court deferred to the city’s legislative decision to use incentive zoning to address the housing needs in Chinatown.

    Facts

    Plaintiffs, representing low-income residents and workers in Chinatown, challenged a 1981 amendment to the New York City Zoning Resolution that created the Special Manhattan Bridge District. The amendment aimed to improve housing conditions by encouraging new residential construction, rehabilitating existing structures, and expanding community facilities. It allowed developers to increase building density in exchange for providing community facilities, low-income housing units, or rehabilitating substandard housing. A developer, Henry Street Partners, obtained a permit to build mixed-income housing on vacant land, contributing $500,000 to low-income housing.

    Procedural History

    Plaintiffs filed suit, alleging the amendment was unconstitutional for not being enacted pursuant to a well-considered plan and seeking a mandatory injunction to compel the city to create a zoning plan mandating low-income housing construction. The Appellate Division dismissed the complaint. The plaintiffs appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether the Special Manhattan Bridge District amendment was enacted pursuant to a well-considered plan, as required by zoning law.
    2. Whether the City of New York has a legal obligation to zone specific areas for low-income housing, such that its failure to do so in the Special Manhattan Bridge District constitutes exclusionary zoning.

    Holding

    1. No, because the amendment was preceded by a study, considered the city’s overall zoning policies, and was reasonably related to the legitimate goal of developing and rehabilitating housing in Chinatown.
    2. No, because New York City is not engaging in exclusionary zoning by not mandating low-income housing in every district, as the City as a whole provides a variety of housing opportunities.

    Court’s Reasoning

    The Court of Appeals held that the amendment was part of a well-considered plan, noting that the entire city of New York is zoned and that the amendment was based on a study of the Manhattan Bridge area. The court emphasized that a “well-considered plan need not be contained in a single document; indeed, it need not be written at all.” The court found the legislation reasonably related to its goals: the development of needed housing and the rehabilitation of existing housing in one area of Chinatown. The court distinguished this case from exclusionary zoning cases like Berenson v. Town of New Castle, which involved suburban communities excluding low- or moderate-income housing. The court stated, “Constitutional principles are not necessarily offended if one or several uses are not included in a particular area or district of the community as long as adequate provision is made to accommodate the needs of the community and the region generally”. The court reasoned that requiring particular uses in every district would be “obnoxious to the City’s over-all development”. The court declined to extend the Berenson rule to the 14-block area, noting that New York City, unlike the suburban towns in Berenson, has already made extensive allowance for a variety of housing opportunities. The court acknowledged the plaintiffs’ concerns about displacement and gentrification, but concluded that the City’s attempt to use incentive zoning was a valid approach to providing realistic housing opportunities, including new apartments for the poor.

  • Trinity Place Co. v. Finance Adm’r of N.Y., 39 N.Y.2d 144 (1976): Incentive Zoning and Property Tax Assessment

    39 N.Y.2d 144 (1976)

    When a property owner dedicates land for public use in exchange for zoning benefits that enhance the value of their remaining property, the city may consider the entire development as a single unit for tax assessment purposes, reflecting the benefits conferred by the dedication.

    Summary

    Trinity Place Co. challenged the tax assessment on its property, arguing that the portion dedicated as a public plaza should be assessed as valueless due to restrictions on its use. The company had received zoning benefits allowing it to construct a larger office building on the adjacent block in exchange for creating the plaza. The court held that the city could assess the two blocks as a single unit, considering the benefit conferred to the building site by the creation of the plaza. This reflects the quid pro quo of the incentive zoning agreement and prevents the owner from disavowing the arrangement for tax purposes.

    Facts

    United States Steel Corporation originally planned to construct two office buildings on two city blocks. Due to tenant issues on the southern block, U.S. Steel opted to build a single, larger office building on the northern block and dedicate the southern block, along with a portion of the northern block, as a public plaza. This arrangement was made possible through city zoning ordinances that allow for incentive zoning developments where a developer can gain density bonuses in exchange for providing public amenities. Trinity Place Co. later leased the property and constructed the office building and plaza.

    Procedural History

    Trinity Place Co. challenged its tax assessment for the years 1970-1974, arguing the plaza portion of the land was valueless. The Special Referee agreed and reduced the assessed value of the plaza land. The Appellate Division reversed, finding that the zoning law treated the parcel as a single unit. The case was appealed to the New York Court of Appeals.

    Issue(s)

    Whether the City of New York may reflect in its tax assessments the benefits it has afforded to a private owner under zoning resolutions which provide for incentive zoning developments, where the owner has dedicated part of its land to the public under these resolutions in return for substantial advantages which the dedication directly confers on its remaining land.

    Holding

    Yes, because the city’s zoning resolution treats the two-block parcel as a single unit, the tax assessments have not changed since the zoning regulation was applied, the resale price reflected the value of the entire package, and the owner benefits from the larger building made possible by the plaza.

    Court’s Reasoning

    The Court of Appeals affirmed the Appellate Division’s order, emphasizing several key factors. The city’s zoning resolution explicitly acknowledges the unitary nature of the zoning development. The tax assessments on the two blocks remained unchanged since the zoning regulation was applied, indicating that the city considered the combined benefit. The court noted that the resale price of the assembled package, after rezoning, significantly exceeded the original acquisition prices of the blocks separately. The court reasoned that the owner cannot disavow the zoning arrangement for tax purposes after benefiting from it. The court distinguished prior case law, noting that those cases involved separate ownership of the park land and the benefited land, whereas here, the land is held by one owner who benefits from the larger building allowed by the plaza. The court also emphasized the negotiated nature of the agreement between the city and the owner, highlighting the value and flexibility of incentive zoning programs. The court stated, “Given the difficulties in land use control and regulation which presently plague our older cities, we should be very careful not to nullify the usefulness of incentive zoning by undercutting the city’s half of the bargain in the manner urged upon us here by appellant.”