New York’s “City of Yes” Zoning Initiative
Imposes Possible Implications for Multi-Use and Retail Properties
What is the City of Yes Initiative?
In June 2022, Eric Adams, the Mayor of New York, alongside the Director of City Planning (DCP) Dan Garodnick, introduced the “City of Yes” initiative to refurbish New York’s zoning framework. The NYC planning panel approved the ‘City of Yes’ housing plan on September 25th, 2024. However, it still faces a tough road through City Council.
This controversial plan will allow up to 109K more homes. The main efforts of this initiative are to support small businesses, create affordable housing, and promote sustainability. With the plan, the opportunity for further development on top of New York’s mixed-use and retail properties has risen.
Possible Implications of the “City of Yes” Plan
- Increased Property Values
Zoning changes dictate the course of real estate development. There are expected to be alterations of property values with the initiative. The rezoning of areas in NYC may cause a change in land prices for retail or mixed-use developments. This is due to the higher revenue-generating potential of such properties. - Demand for Multi-Use Properties
Queens neighborhoods lead the real estate resurgence of 2024 in New York, with Ridgewood being the top neighborhood to watch. Online searches for properties in Ridgewood surged by 10.7% from 2022 to 2023. Seeing as Ridgewood is known for its influx amount of mixed-use properties, with 297 listings across Queens blending residential and commercial spaces, the demand for these developments is very high amongst this community. With the “City of Yes” plan prioritizing housing, the lack of new mixed-use developments which are experiencing a growing demand in these areas, can also play a role in the increased property values. - Long-Term Stability
Maintaining a stable market for mixed-use properties not only provides a reliable source of income for investors, but it also allows clients to invest in their futures without worrying about the possibility of unexpected price increases. The new zoning initiative has opened concerns about the long-term stability of these neighborhoods. With the possible increase in property values and unattended demand for mixed-use buildings, there isn’t any guarantee about how the market will be affected in these areas as a result of the “City of Yes” initiative.
Conclusion
While the “City of Yes” initiative provides new housing opportunities in the five boroughs, there are some possible and guaranteed variables that will affect commercial real estate. In this case, it would impact retail and mixed-use properties. The increase in property values, unattended demand for new mixed-use developments, and lack of long-term stability that could occur as a result of this initiative are what investors and developers need to prepare for as plans are underway.
