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.
Mario June 22nd, 2010 at 3:19 pm
You would think that a businessman like Bloomberg would know that trying to restore or slow down the erosion of New York’s manufacturing base is a fool’s errand. The comparative advantage of New York in this is gone forever. This is a global change.
And thank goodness. Wouldn’t it be “great” if the factories of a bygone era returned and put people in the mind-numbing work of the early 20th century!
It seems to me that rents will rise as neigborhoods are improved in line with consumer demand. But this will be in the areas most affected by the law. But it will reduce pressure on rents in other areas of the city as more alternatives will then be available.
All of the code “protections,” of course, ensure that rents will rise higher than otherwise. (I am assuming that the law will mandate more than the market.) Someone has got to pay for it.
In general, cities do better when they go along with market forces than when they try to resist them.
Karl June 22nd, 2010 at 4:00 pm
The author of this article is wrong in claiming that the law “…gut NYC’s Industrial Business Zones”. There is no provision in the bill that asks for or otherwise encourages or legalizes future conversions. The vast majority of these zones are going to be exempt anyway.
This is an unfounded concern like so many ill-researched and half-baked allegations we have seen on blogs and elsewhere.
Mario Rizzo June 22nd, 2010 at 4:15 pm
Too bad if it is *not* true that the “industrial business zones” will be “gutted.” They should be. The city is fighting reality is trying to make manufacturing profitable again.
Jeremy Sapienza June 22nd, 2010 at 5:04 pm
I apologize for the inaccuracy there, a later edit with more information somehow reverted and I had to rewrite from memory some of the details — I forgot the IBZ section.
Karl June 23rd, 2010 at 12:56 pm
Jeremy, while I appreciate your apology and correction the language is a bit too close to the propaganda that was leveled again the bill. I wish especially those that write about the bill would take their time to read it rather than repeating propaganda – and without attribution to boot.
Stephen Truax June 23rd, 2010 at 1:15 pm
Karl, if you would be so kind, would you mind sourcing either the propaganda leveled against the bill (Bloomberg’s letter to Patterson, I assume)? Would love to read it.
And/or, could you enlighten us as to how this law WILL change the affected IBZs? (“The law will now cover tenants in about 3600 more units in around 300 buildings who can prove their tenancy for 12 months or more in 2008 and 2009.”)
morgan June 24th, 2010 at 4:31 pm
Actually, the way I read the law, it covers tenants who live in a building where 2 or more units in the building were residential for 12 months or more in 2008 and 2009, regardless of how long they themselves lived there b/w 2008 and 2009. Makes a big difference for me because I moved during that period b/w 2 buildings that would otherwise qualify for this.
Karl June 24th, 2010 at 6:23 pm
The law address the units, not the tenants.
Units were have to have been residentially occupied for consecutive 12 month in the window period.
Karl June 24th, 2010 at 6:36 pm
Letter is linked in previous article. NYIRN is the many purveyor of anti-loft law expansion arguments.
…
Law is very unlikely to have any impact at all on the IBZ. The only actual argument that I have heard – and I am not joking – was that residential tenants have “yelled” at and complained to companies that let their trucks run in the street while parked and that operate noisy equipment at night, such as big fans etc.
Perhaps the whole issue can be resolved by passing a law that outlaws yelling at industries inside the IBZs. The no-yelling zones should be strictly enforced! And the people at NYIRN would be perfect for the job.
Jeremy Sapienza June 25th, 2010 at 10:52 am
You’re referring to the “gut” part? That’s my own word there, and I don’t have any particular person to attribute it to since it wasn’t in print yet when I got the info through a sort of convoluted (but literal) game of telephone. The fact is that, like in Tribeca and SoHo, this is a slippery slope toward rezoning and residential use and the banishment of heavy manufacturing (not that there is much around here anyhow). I don’t see any point in denying that. However, we’ll hopefully have time to present all sides and I hope to give “win-win-win” advocates their share of time here.
Jeremy Sapienza June 25th, 2010 at 11:02 am
Fixed (I hope). Thank you for the correction. I hope that as someone who has spent a lot of time on this issue you understand the difficulty in trying to relay this information as simply as possible by a layman to laymen, and I thank you for your patience.
mopar June 25th, 2010 at 2:58 pm
Only the cheapest commodity goods are gone forever — China today, some other Asian country tomorrow.
Quality plumbing parts, cars, tool machinery, and clothing from small makers such as Steven Alan costing $100 and up per item (even bathing suits for the Gap) are still made in the US, often in NYC.
There are many viable light manufacturing businesses in the city today and potentially could be more tomorrow if the rent were cheap enough. Look around Flushing Ave. and into Queens and you will see metalworks, bakeries, meat processing, garment factories, artist studios, 3rd Ward, etc., plus services and retail such as garbage processing, UPS, and Build It Green.
It’s really hard to find factory or warehouse space that rents for $1 per square foot or less, because of course it’s much more lucrative for landlords to rent it illegally to recent college graduates for $2.5 a square foot. I know because we were looking and didn’t find any.
It would be nice if the whole economy could be hipsters eating at Roberta’s but I don’t think so.
simple312 June 26th, 2010 at 6:55 pm
as mopar mentions, i don’t think that most of the people living in the illegal lofts realize they are displacing manufacturing. The original idea of the loft law was to help protect artists living in commercial spaces to accommodate their studios – some materials like oil paint and sculpture just cant be done (beyond a hobby scale) in a residential space. so in a way they are manufacturing items.
I have a feeling most of the people living in illegal lofts are just living there – because its cool or possibly cheap, or other reasons unrelated to art creation.