A residential future for the East Williamsburg Industrial Park? The City-protected North Brooklyn Industrial Business Zone was sacrificed in recognition of the real uses of formerly industrial space in the Bushwick area. — Photo by Jeremy Sapienza

Shortly before midnight, Governor David Paterson signed into law New York Senate bill S.7178A as Chapter 135 of the Laws of 2010. There was some speculation that the governor might veto the bill after pressure from NYC Mayor Michael Bloomberg and some local politicians, but after late-night negotiations some changes were made and what’s known as the new Loft Law was passed.

One of the amendments to the law as proposed by sponsors Assemblyman Vito J. Lopez and Senator Martin Malavé Dilan include an increase in the minimum number of inhabited units per property required for applicability from two to three. It’s not yet known what other changes were made, but Bloomberg called for much stiffer penalties for illegal conversions of industrial and commercial space.

A significant effect of the law will be to gut three of NYC’s 16 Industrial Business Zones which had previously kept residential conversions of industrial space off the table through more restrictive zoning rules and tax credits. The affected IBZs stretch across Williamsburg, Greenpoint, Bushwick, and Maspeth, the neighborhoods most affected by residential conversion. This may open these areas for eventual rezoning and new residential construction.

A major change for tenants is that Loft Law protections are now permanent — previously, protected loft tenants had to hope that they would be afforded new extensions upon the temporary law’s expiry.

In recent years, many Bushwick conversions, which house perhaps thousands of people, have taken place without sanction from City bodies. The law will now cover about 3600 more units in some 300 buildings whose tenants can prove the residential use of their lofts for 12 months or more in 2008 and 2009.

Landlords of affected properties will be compelled to bring units up to code in all areas including the health, safety, and fire standards required for all residential units. Tenants will also be afforded rent stabilization upon completion of the upgrading work, which will prevent sudden rent increases and evictions.

Not yet clear is the effect these mandated improvements will have on rents at hundreds of properties in Williamsburg and Bushwick. Landlords may need to spend large sums to bring substandard commercial spaces into compliance with residential code, and will be able to raise rents to cover these expenditures. There will also be less risk to living in formerly illegal quarters, which may increase demand and prices, something which concerns some loft dwellers who spoke with BushwickBK.

We’ll have more on what the new, permanent Loft Law means for Bushwick in coming weeks.