Research Projects Land Use Regulation
Minimum Parking Requirements: A Continuing Role in a Dense Metropolis?
New York City’s zoning code mandates that new residential construction in most neighborhoods be accompanied by a minimum number of new off-street parking spaces. The Furman Center is evaluating the merits and drawbacks of some of the city’s parking policies from two perspectives: how developers respond to minimum parking requirements in terms of the quantity and type of parking provided; and how residents respond in terms of their car ownership, mode choice, and vehicle miles traveled (VMT). We are addressing the following questions: do minimum parking rules require more parking spaces than developers would have provided independently? What economic value do residents place on parking availability? How does the supply of parking relate to a resident’s car ownership and modal choice decisions? Thus far, our examination of developer responses to parking requirements reveals that, by and large, developers tend to build only the minimum parking required, which suggests that the minimum parking requirements are either exactly what the market would demand, or are higher than the market really wants.
Rezoning, Housing Capacity and Neighborhood Characteristics
Since 2002, the New York City Department of City Planning (DCP) has initiated more than 100 neighborhood rezonings, affecting more than 25 percent of the city’s land. In some cases, a rezoning was intended to protect a neighborhood’s traditional character from “out-of-context” development, while in other cases, the focus was on creating new development opportunities near transit or adding new vitality to underused land or economically depressed neighborhoods. In our March 2010 policy brief, How Have Recent Rezonings Affected the City’s Ability to Grow?, we analyzed the rezonings that took place between 2003-2007 to determine their net impact on the city’s capacity for new development, finding that 86 percent of the rezoned lots citywide were either downzoned, explicitly reducing the amount of permitted development, or rezoned in a way that added or adjusted building requirements without changing the amount of permitted development. Although only 14 percent of rezoned lots were upzoned, we estimated that the cumulative effect of all of the rezonings in these years was a net gain of 100 million square feet of new residential capacity. We are updating the analysis to incorporate more recent rezonings. We also are trying to better understand the relationships between the rezonings and various lot and neighborhood characteristics, including proximity to existing public infrastructure (including transportation, parks, and schools), demographics, market trends, and political participation. Finally, we are assessing the impact the rezonings have on building activity, sales activity, and house prices in New York.
Soft Sites: Why Do Some Sites Remain Underdeveloped In Strong Markets?
New York City’s capacity to grow depends in part upon whether land that is currently underused can be developed to its full zoning capacity. It’s unclear what causes some property owners to develop their land to the fullest Floor Area Ratio (FAR) permitted by the applicable zoning, while other owners continue a current use even though development to full FAR appears to make better economic sense. The Furman Center’s preliminary analysis indicates that about 25 percent of the City’s residentially zoned tax lots were built out at less than half of their maximum permitted FAR in 2003. Researchers are now evaluating how under-development relates to the characteristics of the properties, their owners, and the neighborhoods in which they are located. Using information gleaned from data analysis, case studies, and interviews with owners and real estate professionals, we will construct a model to predict which lots will build out and which will not, and use that model to suggest policies that the city could adopt to encourage landowners to develop underused land.
The Effect of Historic District Designation on Property Values, Building Activity, and Neighborhood Demographics
In 1965, Mayor Robert F. Wagner established the Landmarks Preservation Commission. Since then, it has designated 100 historic districts across New York City, ranging in size from single blocks to enormous swaths of some of the city’s most iconic neighborhoods. The goal of designation is to protect the architectural and historical character of specific areas. Designation therefore restricts what can be built, renovated, and torn down within a district. While previous research has looked at the impact historic designations have on property values, it has not been able to separate the effect of designation from the effect of the historic features of the properties that may have motivated the designation.
Additionally, little is known about other impacts historic district designation may have on local housing markets. For example, the designation of a historic district could shape the demographic characteristics of local communities, or limit development activity in particular neighborhoods. Using data on residential transactions and construction permits, the Furman Center is examining how historic designation affects property values,
housing supply, and neighborhood demographics. We are conducting this research, in partnership with the Taubman Center for State and Local Governments at Harvard University, to help key stakeholders in the historic designation process better understand the costs and benefits of establishing historic districts in New York City.
Transferable Development Rights in New York City
During New York City’s recent real estate boom, many construction projects depended on the transfer of unused development rights from lots with existing buildings that were smaller than the applicable zoning allowed. Because most of these transfers were made pursuant to an as-of-right administrative process, there is no centralized tracking of the transfers. In order to better understand where and how development rights have been used in New York City, the Furman Center is building a database to systematically track recent development right transfers. We will then use this database to analyze the way the market for transferable development rights currently works. We hope to use the information we glean about how transferable development rights are being used to evaluate whether and how development rights could facilitate the development of affordable housing, perhaps with modifications to existing transfer rules.
What Teardowns Tell Us About Land Value
Understanding the value of land—apart from the value of buildings—is critical to land use policy. The most straightforward method for valuing land is through sales of vacant parcels. However, parcels that remain vacant for long periods of time may not be representative of a typical lot in a city, and therefore may not produce accurate measures of land values in a typical neighborhood. The Furman Center is using an innovative method to estimate land value in New York City by identifying “teardowns,” buildings that are immediately demolished to provide new building sites, as an alternative method for estimating land values. We have matched property sales data with demolition permit data to compile a list of teardowns in New York City in the past several years. We estimate land prices for more than 2,000 teardown properties in New York City and analyze the extent to which vacant land sales produce land value estimates that are similar to the teardowns method. After controlling for important neighborhood and parcel characteristics, we find strong evidence that teardowns provide superior estimates of land values, compared to vacant land sales.
