Mayor Adams and City Planning Reveal “City of Yes for Economic Opportunity” Zoning Text Amendment to Support Business Development

On June 14, 2023, Mayor Eric Adams and Department of City Planning Director and City Planning Commission Chair Dan Garodnick announced the “City of Yes for Economic Opportunity” zoning text amendment which includes details on their proposal to foster Economic Development through a variety of zoning tools. The text amendment would create greater flexibility for businesses in commercial and manufacturing zoning districts as well as allow limited commercial expansion in traditionally residential zoning districts.

These zoning rules are intended to provide flexibility for properties and small business owners who are seeking to expand, modernize and adapt to the changing world, while enhancing the local and central business districts’ design guidelines.

“The plan would allow for the largest expansion of space available for small-scale producers like clean manufacturers and microbreweries in 60 years, foster growth for more than 17,000 businesses in industrial areas currently prevented from adding square footage, and eliminate outdated rules that ban dancing in restaurants and venues in commercial zones,” according to the City.

This proposal is expected to enter public review later this fall and will be the second in a series of citywide text amendments being prepared as part of the Mayor’s City of Yes agenda. Zoning for Carbon Neutrality started its public review on April 24^th, 2023, and Zoning for Housing Opportunity is slated to move forward in 2024. 

The Economic Opportunity amendment has 18 policy changes that broadly fall into 4 categories: Expand Options for Business to Locate; Support Growing Industries; Foster Vibrant Neighborhoods, and Provide Clarity and Predictability.      

Expand Options for Businesses to Locate

A fundamental principle behind zoning is that the rules are intended to allow compatible uses to flourish together, while separating out uses that would result in conflicts that would impede the vibrance of the areas.  But, the world often evolves at a pace faster than the city can regulate and many restrictions are no longer necessary in today’s climate. The proposed changes in this category will liberalize the zoning to expand where in a building and in which districts a business can locate. Additionally, the city is proposing to create a new flexible job-intensive zoning district. For more specific information see the detailed summary below.

Support Growing Industries

Zoning regulations have been crafted over the last 60 years and often can have unintended consequences on new or growing industries. These businesses, like life sciences and film studios, need modern zoning to match their current and future needs. After examining the rules and regulations around these industries, the city is seeking to encourage their expansion by removing regulatory red-tape and uncertainty generated by outdated rules and ambiguous terms. For more specific information see the detailed summary below.

Foster Vibrant Neighborhoods

The New York City Zoning has numerous rules that are designed to restrict where uses can be located and how they should be designed.  Many of these rules are inconsistent in commercial districts, assume all last-mile deliveries will occur through large vehicles and restrict uses in Residential Districts. Further, these rules do not consider a modern-digital city where the lines between residential and commercial neighborhoods are increasingly blended. The city is proposing several rules, which are designed to activate our residential neighborhoods and commercial corridors.  These proposals include removing restrictions on activating ground floor spaces, creating consistent zoning rules on ground floor design and allowing smaller scale warehouses/wholesale stores. For more specific information see the detailed summary below.

Provide Clarity and Predictability

Finally, the city’s zoning has regulations, which can create confusion for businesses seeking to find a location or expand.  The city proposes to specifically clarify and modernize the city’s Use regulations. Additionally, existing loading berth rules can prevent new uses from being able to occupy vacant space. To make it easier for spaces to be occupied, the city proposes that new uses in existing buildings should not need to provide additional loading berths when there is a change of occupancy. For more specific information see the detailed summary below.

Next Steps

These zoning rules are intended to provide flexibility for properties and small business owners who are seeking to expand, modernize and adapt to the changing world, while enhancing the local and central business districts’ design guidelines.

At Capalino, we will continue to follow the progress of this text amendment as it is drafted and moves to public review in the fall and through the process, which requires both City Planning Commission and City Council approvals. We are also tracking the future Carbon Neutrality and Housing Opportunity text amendments. All three amendments will affect property and building owners.  Let us know how we can be helpful if you would like further information.

Detailed summary of proposed changes

Expand Options for Business to Locate

• Enable more business to locate in ground floor store fronts– In many districts, businesses like dance studios, instructional facilities and clothing rental shops are only allowed above the ground floor. The proposed change would remove this restriction in major commercial districts.
• Remove Arbitrary distinctions between similar zoning districts- Commercial zoning districts with similar intents often do not allow similar uses.  The proposal will rationalize regulations around where businesses can locate by removing these unnecessary constraints.

• Expand opportunities for small-scale clean production – Most small-scale manufacturing is required to be located only in industrial areas and away from residential uses. However, many small-scale manufacturing uses like breweries and ceramic shops pose no environmental or noise pollution risks and thrive near residences. The proposed regulation would allow small scale, clean production business in commercial districts subject to environmental standards.
• Allow upper floor commercial activity- Commercial uses are not allowed on the same floor or above residential uses in mixed-use buildings. The proposal would allow commercial uses on the same floor or above residential uses provided that the uses have a separate entrance.
• Create new job-intensive zoning districts for future- Current manufacturing zoning favors low scale buildings and limits job growth in the districts.  The proposal would create new zoning districts that would allow for modern loft-style buildings, with higher density and a flexible building form. 

Support Growing Industries

• Ensure life science facilities can expand- Zoning creates ambiguity on where safe and modern life-science research can locate through outdated laboratory terminology. The proposed new rules will clarify where safe life-science businesses can locate and expand a special permit to allow these uses to be placed on university and hospital campuses.
• Provide bulk relief for new buildings such as film studios- Many industrial and commercial businesses have unique physical requirements like large footprints or high ceiling plates that are in direct conflict with New York City’s bulk regulations like maximum street-wall height rules. The proposal would create a new process to appeal to the City Planning Commission for limited relief from setback and yard requirements.
• Support nightlife with common sense dancing and live entertainment rules –Zoning regulates bars and restaurants based on the type of live entertainment they offer, effectively banning small businesses and venues from including comedy, music and dancing. The new regulations would allow permitted businesses with a maximum occupancy under 200 people to have live shows with posted show times and cover charges in all commercial districts.
• Simplify zoning rules so amusement and experimental business can flourish- Arcades, children’s entertainment areas, virtual reality and other Amusement activities are mostly only permitted in Coney Island and the city’s Manufacturing districts.  The proposal would allow new indoor amusements with limits on size in local commercial zones. Outdoor uses would be allowed through a BSA Special Permit process.
• Potentially enable state license of casinos- Casinos represent an economic opportunity for NYC.  The mayor will work with the council and the State on the siting of casinos.
• Clarify indoor and outdoor commercial rules- In most commercial districts, stores are prevented from having an outdoor displace, which can beautify the streetscape and promote the business. The same rules limit urban agriculture’s ability to locate indoors – impeding the urban farming and cannabis industries. The proposal would clarify rules on indoor agriculture spaces and outdoor passive displays.

Foster Vibrant Neighborhoods

• Ease pathways to reactivate vacant store fronts in residential districts- Under existing rules a store front with a grandfathered use cannot be re-occupied if it has been vacant for two years.  The new proposal would remove the time limits on re-occupancy.
• Create process for new corner stores in residential areas- Commercial uses are not allowed in Residential Districts, which reduces access to neighborhood services throughout the city.  The new proposal would allow new small professional offices, retail or services uses in all Residential District located 100 feet from an intersection or in a Large-Scale Development.
• Increase allowances for home occupations- Zoning allows some businesses to be operated within an individual’s home, but bars many uses like barber shops, interior decorators’ offices and advertising agencies. The proposal would allow more home occupations uses at a larger size, while maintaining noise/environmental rules, limits on signage and restrictions on selling items not produced on site.
• Introduce corridor design rules that ensure buildings contribute to surroundings- In some districts, the city has rules to ensure a consistent retail corridor design through transparency requirements and restrictions on lobby sizes.  But in many other districts it does not.  The city is proposing to create a consistent framework for commercial and ground floor design that is more stringent in places with pedestrian activity and more flexible in auto-oriented corridors.
• Clarify small-scale wholesale and storage rules- Small wholesale and storage businesses have complex rules on the amount of size they can occupy and there is no way to easily accommodate ‘micro-delivery’ systems in commercial districts, like cargo bikes that alleviate truck congestion. The city is proposing to allow wholesale and storage businesses at a limited scale in neighborhood commercial districts and larger scale in Central Business Districts.

Provide Clarity and Predictability

• Simplify and modernize use definitions to clarify where businesses can locate- Zoning has many similar retail uses located across multiple use groups.  The city seeks to modify the existing use regulations using the North American Industry Classification System (NAICS), which will provide a commonsense categorization of commercial uses. 
• Modernize loading rules to allow buildings to adapt over time- Under existing rules, loading bays are required to be provided by specific uses. When a building has a change in use and occupancy, the new use may be required to provide additional loading bays, which is often costly and unnecessary.  The proposal would remove the requirement that existing buildings provide additional loading berths when there is a change in use.