Governor’s Conversion Plan: Commercial to Residential

January 21, 2021

On January 19, 2021, Governor Andrew M. Cuomo issued the FY 2022 State Budget for Transportation, Economic Development and Environmental Conservation. In Part L of the budget, the Governor proposes to amend Section 277 of the New York State Multiple Dwelling Law, to allow for greater flexibility in connection with the residential conversion of certain commercial buildings.

The Governor’s plan aims to reduce light and air requirements in the Multiple Dwelling Law, for certain commercial-to-residential conversions. More specifically, the plan will allow for Section 277 of the MDL to apply to residential conversions of hotel buildings and Class B or Class C office buildings, so long as a certain amount of affordable housing is provided (e.g. at least 20% of the housing units are affordable units, or the building is operated as a supportive housing facility). The geographic applicability of this plan will depend on whether the conversion is from a hotel or office use – the plan applies to most of New York City for hotel conversions, but only to Midtown and Midtown South in Manhattan for office conversions.

Interestingly, the New York City Zoning Resolution already allows for a similar reduction in light and air requirements (among others), but such reduction applies to a narrower scope of buildings – buildings erected prior to December 15, 1961 and located in certain portions of Manhattan, Brooklyn, and Queens. Conversely, the proposed plan will apply to hotel or Class B/C office buildings that receive lawfully issued permits for residential conversion on or before December 31, 2026. In other words, the Governor’s plan will be more permissive than zoning in that it will apply to buildings constructed between 1961 and 2026.

This proposal raises several questions. One preeminent question, is whether other zoning regulations, which are not currently affected by the plan but may inhibit residential conversions, will be addressed? For example, the proposal modifies certain light and air requirements, but does not modify distance between building, open space, and court regulations. Will these requirements be modified as well? If not, many residential conversions will be prohibited. There is also a question as to whether the Governor’s plan will apply to residential conversions that provide affordable housing units pursuant to an affordable housing plan with New York City, rather than New York State.

For more information on this issue or other land use & zoning matters, please contact:
Mitchell A. Korbey at +1 212 592 1483 or [email protected]
Robert Huberman at +1 212 592 1592 or [email protected]

© 2021 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.