CAN NEW YORK SOLVE ITS HOUSING CRISIS?

>>> GOOD EVENING.

WELCOME TO "METROFOCUS."

I'M JACK FORD.

NEW YORK IS FACING A MASSIVE HOUSING CRISIS BY VIRTUALLY EVERY MEASURE IMAGINABLE.

ONE OF THE PROPOSALS TO TACKLE THE PROBLEM IS TURNING EMPTY MANHATTAN OFFICE SPACE INTO AFFORDABLE HOMES FOR NEW YORKERS.

GOVERNOR HOCHUL AND MAYOR ADAMS BACK THE IDEA, WHICH COULD INVIGORATE MIDTOWN NEIGHBORHOODS AND PROVIDE RELIEF TO OUTER-BOROUGH RESIDENTS PRICED OUT OF THE CITY.

SO TOO DO BUSINESS, LABOR AND CIVIC AND RELIGIOUS COMMUNITIES CALLED THE FIVE BOROUGH HOUSING MOVEMENT WHICH PLANS TO KEEP UP THE PRESSURE TO SEE THIS IDEA THROUGH.

JOHN SANCHEZ IS THE EXECUTIVE DIRECTOR.

HE JOINS US TO DISCUSS THE MOVEMENT AND THE CITY'S HOUSING CRISIS.

WELCOME.

THANKS FOR JOINING US.

>> THANKS FOR HAVING ME.

>> LET'S START OFF BY HAVING YOU GIVE US A SENSE OF THE SCOPE OF THE HOUSING PROBLEM IN NEW YORK.

>> THE SCOPE OF THE HOUSING CRISIS IN NEW YORK IS MASSIVE.

WE NEED TO BUILD ABOUT 500,000 NEW UNITS IN THE NEXT DECADE TO KEEP UP WITH DEMAND.

THERE'S AN IMMENSE SHORTAGE OF HOUSING.

IN THE LAST DECADE WE CREATED 800,000 JOBS BUT ONLY HOUSING FOR 200,000 PEOPLE.

THERE'S A SHORTAGE.

IF YOU LOOK AT MANHATTAN, THE RENT IS ABOUT $5,000.

PEOPLE ARE FEELING THE CRUNCH.

HIGH INFLATION.

FOR THIS PERIOD, NEW YORK HASN'T BEEN A LEADER IN BUILDING HOUSING.

WE HAVE BEEN A NATIONAL -- WE HAVE BEEN FALLING SHORT OF BUILDING HOUSING.

WE HAVEN'T BEEN A NATIONAL LEADER IN BUILDING HOUSING.

WE NEED TO RETURN TO THE TIME WE WERE.

>> WHY DO YOU THINK THAT IS?

WHY DO YOU THINK AS YOU MENTIONED, WAGES GOING UP, JOB EXPLOSION, AND YET HOUSING HAS NOT KEPT PACE IN NEW YORK, WHY DO YOU THINK?

>> A LOT OF THE HOUSING AND THE RULES THAT GOVERN HOUSING ARE LAWS THAT WERE FROM 60 YEARS AGO.

NEW YORK CITY ZONING RESOLUTION IS FROM 1961 THAT ALLOWS BUILDINGS TO BE BUILT OR NOT BUILT.

WE HAVE STATE RULES THAT LIMIT HOW MUCH HOUSING CAN BE IN AN APARTMENT.

FOR EXAMPLE, THE FAR CAP.

A LOT OF THE OUTDATED RULES FROM THE STATE AND CITY ARE FINALLY CATCHING UP TO US.

BECAUSE WE WERE RELYING ON INFRASTRUCTURE IN THE '20s AND '30s, THAT'S NO LONGER SUFFICIENT.

>> GIVE US A SENSE OF YOUR GROUP.

WHO ARE SOME OF THE PARTICIPANTS?

>> OUR GROUP IS A DIVERSE COALITION OF NON-PROFIT ORGANIZATIONS, LABOR GROUPS, NAACP, GRANT CENTRAL PARTNERSHIP, GROUPS FROM AROUND THE CITY THAT WANT TO SEE MORE HOUSING BEING BUILT AND MAKE SURE THERE'S AN AFFORDABILITY COMPONENT AS WELL.

IT'S ALSO IMPORTANT THAT THIS AFFORDABLE HOUSING IS IN MANHATTAN SOUTH OF 96th STREET.

>> WHY IS THAT IMPORTANT?

>> NEIGHBORHOODS HAVE AFFORDABLE HOUSING BEING DEVELOPED.

HIGH OPPORTUNITY SOUTH OF 96th HAVEN'T PROVIDED AFFORDABLE HOUSING.

IT'S IMPORTANT PEOPLE HAVE THE OPPORTUNITY TO LIVE NEAR TRANSIT, NEAR JOB HUBS, LIVE NEAR THE CULTURAL AMENITIES IN MANHATTAN.

THAT WAY WE CAN HAVE NEIGHBORHOOD INCOME DIVERSITY.

>> LET'S TALK ABOUT WHAT I MENTIONED IN THE INTRODUCTION.

THE IDEA OF LET'S TAKE EMPTY OFFICE SPACE AND CONVERT IT TO HOUSING SPACE.

WE KNOW WE HAVE HEARD THAT PROPOSAL FLOATED IN THE PAST, BUT NOTHING HAS REALLY HAPPENED.

WHY DO YOU THINK NOW MIGHT BE THE TIME TO ACTUALLY MAKE THAT TAKE PLACE?

>> THE POST-PANDEMIC ENVIRONMENT CHANGED EVERYTHING.

WE ARE SEEING THAT 50% OF EMPLOYEES AT MAJOR EMPLOYERS ARE GOING INTO THE OFFICE ON A HYBRID SCHEDULE.

18% OF MAJOR EMPLOYEES ARE EXPECTING TO SHRINK THEIR REAL ESTATE FOOTPRINT.

THERE'S AN OPPORTUNITY.

MIDTOWN HAS CHANGED.

BECAUSE OF THE DIRE HOUSING CRISIS WE FACE, HAVING VACANT OFFICES BE AVAILABLE FOR HOUSING, IT SEEMS AS A NO BRAINER.

INTERESTING, IN FACT, THE STATE AND CITY HAVE ALLOWED OFFICE CONVERSIONS.

THERE WAS A PROGRAM IN THE MID '90s TO ALLOW CONVERSIONS SOUTH OF MURRAY STREET IN THE FINANCIAL DISTRICT.

IT YIELDED 13,000 UNITS.

WE WANT TO SEE A BIGGER PROGRAM THAT HAS SOME AFFORDABILITY TIED TO IT.

>> I KNOW FROM LOOKING AT EARLIER PROPOSALS THAT DIDN'T HAPPEN, ONE OF THE BIGGEST HURDLES WAS THE NOTION OF THE COST OF THOSE CONVERSIONS.

IS THAT STILL A MAJOR HURDLE?

DOES YOUR GROUP THINK THERE IS SOME ABILITY TO MAKE THAT MORE REASONABLE AND MORE REALISTIC?

>> ACTUALLY, THE COST OF CONVERSION IS ABOUT $50 TO $150 LESS PER SQUARE FOOT FOR NEW BUILD.

IT'S MORE FINANCIALLY VIABLE.

OF COURSE, IT WILL BE BUILDING SPECIFIC.

SOME BUILDINGS HAVE LARGE FLOOR PLATES AND IT WILL BE EXPENSIVE TO CONVERT.

WE ARE SEEKING TO ALLOW THE STATE TO GIVE BUILDING OWNERS THE OPTION.

RIGHT NOW, YOU ARE LIMITED IN WHETHER YOU CAN CONVERT OR NOT BASED ON THE YEAR YOUR BUILDING WAS BUILT OR THE LOCATION IT IS.

>> I MENTIONED IN THE INTRODUCTION THAT BOTH GOVERNOR HOCHUL AND MAYOR ADAMS SEEM TO BE ON BOARD WITH THESE PROPO PROPOSALS.

THE DEVIL IS IN THE DETAILS.

WE HAVE TO GET TO THAT POINT.

WHAT ABOUT THE STATE LEGISLATURE AND THE CITY COUNCIL?

WHAT'S YOUR SENSE AS TO WHETHER THEY WOULD BE ON BOARD WITH THIS PROPOSAL?

>> WHAT'S ENCOURAGING ABOUT THIS ISSUE IS THAT IT'S UNITING PEOPLE ACROSS THE IDEOLOGICAL SPECTRUM.

WE HAVE CITY COUNCIL MEMBERS SAYING MANHATTAN NEEDS TO DO MORE AND ALLOW MORE HOUSING.

WE HAVE MEMBERS OF THE STATE LEGISLATURE ALSO SAYING THE SAME THING.

IT'S AN ISSUE THAT EVERYONE CAN GET AROUND.

WE REALIZE WE HAVE VACANT SPACE IN MANHATTAN.

LET'S ALLOW HOUSING TO BE BUILT THERE.

SO FAR, THE RECEPTION HAS BEEN WARM ON ALL LEVELS OF GOVERNMENT.

I THINK IT'S ONE OF THE FEW THINGS IN HOUSING THAT'S NOT CONTROVERSIAL THAT HAS A BROAD BASE OF SUPPORT.

>> YOU MENTIONED EARLIER THAT SO MANY OF THE RULES AND REGULATIONS ARE ANTIQUATED, DECADES AGO.

WHAT ARE SOME OF THE MOST SIGNIFICANT FIRST STEPS THAT WOULD HAVE TO BE TAKEN HERE TO ALLOW THESE TYPES OF CONVERSIONS TO TAKE PLACE WITH REGARD TO RULES AND REGULATIONS?

>> YEAH.

THE FIRST THING IS CHANGING THE MULTIPLE DWELLING ON THE STATE LEVEL.

IT LIMITS WHERE OFFICES CAN BE BUILT AND WHAT YEAR TO QUALIFY.

THE SECOND THING IS A 1961 LAW CALLED THE FAR CAP.

IT LIMITS THE SQUARE FOOTAGE OF A BUILDING BASED ON HOW BIG THE LOT IS.

THIS IS A PRE-CIVIL RIGHTS ERA LAW WHEN NEW YORK WAS DIFFERENT.

A MILLION LESS PEOPLE WERE IN NEW YORK.

A LOT OF BUILDINGS THAT NEW YORKERS HERALD FOR THEIR ABILITY TO PROVIDE STABILITY WERE GRANDFATHERED IN.

FOR EXAMPLE, MANHATTAN PLAZA IN HELL'S KITCHEN, THAT COULDN'T BE BUILT TODAY BECAUSE OF THAT CAP.

TRACY TOWER IN THE BRONX COULDN'T BE BUILT TODAY BECAUSE OF THAT CAP.

THERE'S NO RHYME OR REASON FOR THE STATE TO LIMIT NEW YORK CITY'S ABILITY TO DETERMINE, WHERE DOES IT MAKE SENSE TO HAVE A DENSE BUILDING, WHERE DOES IT NOT MAKE SENSE?

RIGHT NOW THE HANDS ARE TIED BY THE STATE RULES.

>> IF, IN FACT, THOSE RULES ARE ABLE TO BE CHANGED TO ALLOW THIS TO MOVE FORWARD, WHAT'S YOUR ESTIMATION AS TO HOW MANY UNITS WE MIGHT BE TALKING ABOUT HERE IN TERMS OF THE DEVELOPING, RECONFIGURING, REPURPOSING, IF YOU WILL, THE ONE SPACE INTO THE RESIDENTIAL SPACE?

>> WHEN IT COMES TO OFFICES, BOTH THE GOVERNOR AND MAYOR'S ESTIMATES ARE 18 TO 20,000 NEW APARTMENTS OVER THE COURSE OF A DECADE.

THAT PROVIDES HOMES FOR 40,000 NEW YORKERS OVER THE COURSE OF A DECADE.

WE REALIZE NOT EVERY BUILDING WILL CONVERT TO RESIDENTIAL.

JUST GIVING THE OPTION IS IMPORTANT.

20,000 UNITS IN MANHATTAN SOUTH OF 96th STREET WITH 4,000 OF THEM BEING AFFORDABLE, THAT ALMOST IS MORE THAN WHAT MANHATTAN PRODUCED IN THE PAST DECADE.

JUST THROUGH OFFICES.

WE ARE NOT TALKING ABOUT NEW CONSTRUCTION OPPORTUNITIES.

>> IF THIS WERE TO HAPPEN -- WE KNOW ONE OF THE -- GOOD NEWS AND BAD NEWS ABOUT GETTING THINGS DONE IN NEW YORK IS THAT IT TAKES TIME.

THE GOOD NEWS IS, PEOPLE WILL BE CAREFUL, MAKE SURE IT'S THE RIGHT THING, IT'S BEING DONE RIGHT.

BAD NEWS, BECAUSE OF THAT IT'S GOING TO TAKE TIME.

IS THERE ANY TYPE OF A TIME LINE HERE, ANY PROJECTION AS TO IF EVERYTHING FALLS INTO PLACE, WHEN WE COULD SEE SOME OF THESE CONVERSIONS STARTING TO TAKE PLACE?

>> WELL, STEP ONE IS TO CHANGE STATE RULES.

STEP TWO IS TO WORK WITH THE CITY TO SEE WHAT ARE SOME REGULATIONS THAT COULD BE LIFTED TO ALLOW THIS TO SPEED UP THE PROCESS.

REALISTICALLY, AN OFFICE CONVERSION CAN TAKE 12 TO 18 MONTHS.

IF EVERYTHING IS ALIGNED, WE CAN SEE OFFICES BEING CONVERTED TO APARTMENTS IN 2025.

>> I SUSPECT YOU ARE SEEING SOME SKEPTICS OUT THERE AND SOME PEOPLE LOOKING AT THIS CAREFULLY.

I WOULDN'T BE SURPRISED IF YOU WERE HEARING SOME PEOPLE SAY, WAIT A MINUTE, THIS SOUNDS LIKE IT'S JUST A FRONT FOR GIVING DEVELOPERS THE OPPORTUNITY TO MAKE A LOT OF MONEY HERE.

WHAT'S YOUR RESPONSE TO THOSE SKEPTICS?

>> TO THOSE SKEPTICS, I WOULD HOPE THEY REALIZE WE HAVE MORE THAN 70,000 NEW YORKERS LIVING IN HOMELESS SHELTERS TODAY.

THE CRISIS IS SO DIRE THAT WE NEED TO LOOK AT EVERY TOOL IN THE TOOLBOX.

WE REALIZE OFFICE CONVERSIONS WON'T SOLVE THE HOUSING CRISIS.

BUT THE ABILITY TO ALLOW 20,000 NEW APARTMENTS IN VACANT OFFICE SPACES IS CRITICAL.

OF COURSE, BUILDING OWNERS ARE TRYING TO MAKE SURE THAT THEIR INVESTMENTS ARE VIABLE.

THEY WANT TO MAKE SURE THEY DON'T GO BANKRUPT.

BUT THEY WANT TO PROVIDE HOUSING.

I THINK THE GOVERNOR'S INSISTENCE THERE BE AFFORDABILITY THROUGH A TAX INCENTIVE IS IMPORTANT, BECAUSE A LOT OF THE WEALTHIEST NEIGHBORHOODS IN NEW YORK CITY HAVE NOT DONE THEIR FAIR SHARE OF PROVIDING AFFORDABLE HOUSING.

IT'S CAUSING PRESSURE IN THE OUTER BOROUGHS.

PEOPLE MOVE TO NEIGHBORHOODS IN THE BRONX, QUEENS, BROOKLYN.

IT'S IMPORTANT THAT EVERY NEIGHBORHOOD DOES ITS FAIR SHARE.

WE CAN'T HAVE ALL OF THE OTHER BOROUGHS DOING THEIR FAIR SHARE AND MANHATTAN IS EXCLUDED.

>> WHAT ABOUT THOSE NEIGHBORHOODS, THOSE HIGH-END NEIGHBORHOODS WHO AS YOU SAID HAVE NOT DONE THEIR FAIR SHARE?

YOU CAN ANTICIPATE THERE'S GOING TO BE PUSHBACK, I WOULD IMAGINE, FROM THERE.

WHAT'S THE PLAN HOW TO HANDLE THAT?

>> IN FACT, I THINK THE PENDULUM IS SWINGING.

COMMUNITY BOARD 4 IN MANHATTAN RELEASED A PLAN THAT SHOWED LOCATIONS WHERE THEY COULD IDENTIFY THOUSANDS OF NEW UNITS OF HOUSING, INCLUDING AFFORDABLE HOUSING.

WE ARE SEEING A PARADIGM SHIFT.

THE MANHATTAN BOROUGH PRESIDENT RELEASED A REPORT DETAILING LOCATIONS THAT COULD ALLOW FOR MORE HOUSING, INCLUDING AFFORDABLE HOUSING.

WHAT WE ARE SEEING IS NOW THERE'S A GROWING ACCEPTANCE FROM ELECTED LEADERS AND EVEN PEOPLE ON THE GROUND THAT WE NEED TO DO OUR FAIR SHARE.

BUT ALSO, THIS IS A DESIRED GOAL TO HAVE DIVERSE NEIGHBORHOODS, BOTH BY INCOME, RACE AND CLASS.

>> LAST QUESTION FOR YOU.

IF SOMEBODY MIGHT BE LISTENING TO THIS CONVERSATION AND SAYING, BUT WHAT HAPPENS IF THE BUSINESS HOUSING MARKET COMES BACK POST AWAY WITH SO MUCH OF THEIR OFFICE SPACE HERE, WON'T THAT PRESENT A PROBLEM FOR US?

WHAT'S THE ANSWER TO THAT?

>> IT'S IMPORTANT TO NOTE THE GRAND SCALE OF THE NEW YORK CITY OFFICE MARKET.

WE ARE TALKING ABOUT 600 MILLION SQUARE FEET.

EVEN IF THE 20,000 UNITS ARE CREATED, THAT WOULD BE LESS THAN 5% OF THE TOTAL OFFICE MARKET IN NEW YORK CITY.

IT'S A SMALL DENT.

NEW YORK CITY HAS A GREAT FUTURE.

THERE WILL ALWAYS BE COMMERCIAL SPACE BEING DEVELOPED.

WE JUST WANT TO HAVE THE OPTION TO SEE HOUSING AS PART OF THAT.

>> JOHN SANCHEZ, EXECUTIVE DIRECTOR OF THE FIVE BOROUGH HOUSING MOVEMENT, IT'S AN INTERESTING PROPOSAL AND PLAN.

WE WILL KEEP IN TOUCH TO SEE HOW IT CONTINUES TO MOVE FORWARD.

THANKS SO MUCH FOR SPENDING TIME WITH US.

YOU BE WELL.

>> THANK YOU, JACK.

YOU TOO.