Manhattan’s Reputation Takes Another Hit With Inwood Rezoning Reversal


A tumultuous 2019 was wrapped up with one last unexpected storyline for the commercial real estate industry: the annulment of the Inwood rezoning. The ruling has potential implications for other rezoning initiatives currently underway in areas such as Gowanus, Bushwick, and the South Bronx.

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On Dec. 19, 2019, Judge Verna Saunders of the New York State Supreme Court annulled the Inwood rezoning, despite prior approvals from the Manhattan Borough President, Manhattan Community Board 12, the City Planning Commission and the City Council.

The lawsuit challenging the rezoning was filed by a local coalition, Northern Manhattan Is Not for Sale, and claimed that the lead agency behind the rezoning, the Office of the Deputy Mayor for Housing and Economic Development (ODMHED), failed to review socioeconomic and environmental issues as lawfully required. The suit identified eight salient issues that city agencies failed to “take a hard look at”, including the impact of the rezoning on promoting residential displacement, the social impact of losing the community’s library, and the effects of the rezoning on minority- and women-owned businesses, to name a few.

However, per the EDC, the rezoning would have addressed many of these concerns. The initiative was slated to create 1,600 new affordable homes while preserving 2,500 existing affordable units. Additionally, the rezoning called for the construction of a new, state-of-the-art library along with several other educational and cultural facilities. It would have also benefitted local business by adding thousands of free-market units to the area and providing Inwood residents with training in the health care, technology and construction industries.

Most of the important issues raised by the concerned community were thoughtfully addressed in the rezoning. So, what happened?

For starters, the city’s response to the lawsuit claimed that it had no burden to address environmental issues identified in the lawsuit, despite legal precedent showing the contrary — the ODMHED essentially said “no” to a conversation that they spent years of work preparing for.

While community leaders have been throwing celebratory parties in the streets and claiming political victories over City Hall and real estate interests, there is a sense among the broader NYC community that we just cut off our nose to spite our face.

According to the U.S. Census Bureau, 16.7 percent of the Inwood population lived below the poverty line in 2017, a number that was higher than the national average of 13.4 percent. The social resources proposed by the rezoning, such as job training and STEM education, would have benefited residents for decades to come.

Pivoting to the commercial real estate industry’s response, frustrated developers and investors cannot help but draw similarities between what just happened in Inwood to Amazon’s Long Island City decision, as well as to the June 2019 rent-regulation reform.

A lack of proper collaboration and engagement could be responsible for all three events. Seemingly, whenever a new initiative nears completion, the goalposts are moved, scrapping years of careful planning along with the costs associated. The private sector is typically left wondering how it can responsibly create projects that impact markets like affordable housing and the tech sector, both extremely underserved at the current time, if the rules are constantly changing.

Certain losses from the Inwood ruling can be quantified, such as the 1,600 new affordable units. But more concerning are the losses that cannot be quantified, such as the perception that New York is no longer open to business and growth. All too often I speak with investors and developers who are pursuing real estate opportunities in other cities or relocating themselves and their families altogether to locations perceived as more business-friendly. The harm already done to our reputation is a loss that cannot yet be calculated.

In today’s political climate, better collaboration has to be our goal in the future if we hope to oversee the necessary growth of our city and lead the rest of the world in areas like sustainable affordable housing, smart urban planning and energy efficiency. Looking back over the past year, poor communication efforts are to blame for far too many failed initiatives and as a result, our city risks freezing itself in time. Our industry should demand increased engagement and compromise from public officials if we hope to balance the needs of New Yorkers with the necessity to grow the city responsibly.

Daniel Tropp is a director in the Tri-State investment sales group at Avison Young.