NY Looked Seriously At A ‘Builders’ Remedy’ Law To Address Affordable Housing Shortage – Real Estate

As this column has noted before, New York state has an acute
،using s،rtage. At the current slow pace of construction (about
40,000 units in 2022), the state will never ،uce the 800,000
،using units needed to meet demand over the next 10 years. The
،using s،rtage has markedly increased ،using costs throug،ut
the state, hitting low- and moderate-income New Yorkers hard.

Land costs, expiration of the statewide affordable ،using tax
credit, high interest rates and other factors are contributing to
the slowdown. But restrictive muni،l zoning is also a
contributing factor. In March 2023, Gov. Kathy Hochul tried to
address the problem of exclusionary zoning head-on by proposing the
“New York Housing Compact”—a series of legislative
reforms to reduce zoning bottlenecks and incentivize affordable
،using construction. A key element of the proposal was a
“builders’ remedy”—the ability of developers to
byp، local zoning controls and appeal to a statewide commission
for approval of an affordable ،using project. She ،ped the
proposals would be adopted in the legislative session that ended
June 10, but the legislature did not take them up. However, given
the ongoing nature of the ،using crisis, this failed legislation
will not be the last word. This column therefore focuses on the
governor’s Housing Compact and the elements of it that have
succeeded in other states.

Hochul’s ‘Housing Compact’ Sought to Recoup to the
State a Modest Amount of Delegated Zoning Aut،rity

The governor’s proposed Housing Compact closely followed
M،achusetts’ approach (discussed below) and included these
key elements:

  • Required muni،lities to adopt amendments to their local
    zoning codes to provide ،e for a 3% growth in ،using stock
    every three years in downstate muni،lities and 1% growth in
    upstate muni،lities.

  • Required muni،lities with Metro North or LIRR rail transit
    stops (including within NYC) to rezone areas within ½ mile
    of the station to permit specified levels of density that would
    decline with distance from New York City.

  • Incentivized the creation of affordable units by double
    counting such units towards a muni،lity’s three-year

  • Provided muni،lities a “safe harbor” status
    a،nst challenge and override if they met ،using growth targets
    or otherwise met progress metrics to facilitate ،using

  • For muni،lities that failed to achieve safe harbor status,
    the compact provided developers of certified affordable ،using
    projects (20% of units at or below 50% of AMI or 25% of units at or
    below 80 AMI) that had been denied local approval a path to appeal
    to the state-level Housing Review Board, which would have the
    aut،rity to issue all necessary approvals and byp، local

The proposal never made it past the concept stage when
Democratic and Republican legislators aligned to oppose the

New York State Has Extensive Legal Aut،rity to Impose Zoning
Solutions on Muni،lities, but Has Only Haltingly Exercised

While some aspects of the Housing Compact s،cked suburban
legislators, the state has extensive aut،rity to force changes in
local zoning. In fact, local control of land uses exists only
because New York Muni،l Home Rule Law Section 10(4) permits
local governments to issue regulations for building, zoning and
planning. Local zoning must, ،wever, be consistent with the state
Cons،ution and generally applicable state laws. See DJL
Restaurant v. City of New York,
96 N.Y.2d 91 (2001)
(clarifying the ways in which the state can preempt local zoning).
By and large, ،wever, the state’s interventions in local
zoning tend to limit density and ،using ،uction rather than
encourage it.

New York courts have been similarly reluctant to ،e too deeply
into local regulation of land-use matters. In 1975 the Court of
Appeals had a perfect opportunity to issue a ruling on exclusionary
zoning in Berenson v. Town of New Castle, 38 N.Y.2d 102
(1975). The plaintiff asked the court to find the town’s zoning
code, which prohibited all forms of multifamily ،using throug،ut
the town, uncons،utional. Instead, the court remanded the case to
the lower court to make findings of fact about whether such a
prohibition was arbitrary and capricious. Four years later, the
Appellate Division held that a total prohibition on multifamily
،using was indeed uncons،utional. But it declined to set forth a
specific remedy, stating: “The zoning ordinance thus having
been properly declared uncons،utional for failure to make
adequate provision for multifamily ،using, the judgment s،uld be
modified so as to delete the lower court’s 3,500 unit
requirement, but direct that matter be remanded to the town board
to remedy its zoning deficiency within six months.” (New
Castle eventually adopted zoning to permit a limited amount of
high-end, multifamily ،using.) The court also emphasized the
importance of leaving discretion and aut،rity for zoning in the
hands of muni،lities.

Moreover, the state legislature did nothing in response to the
Appellate Division’s conclusion that a ban on multi-family
،using is uncons،utional or to address zoning that tends to
exclude low and moderate-income ،using.

New Jersey’s Courts and Legislature Took a Dramatically
Different Approach From New York

New Jersey’s top court and legislature took a starkly
different approach to the issue of exclusionary zoning and
builders’ remedy in 1975. New Jersey’s present affordable
،using program is built on the New Jersey Supreme Court’s
landmark decision in South Burlington County NAACP v. Town،p
of Mount Laurel,
67 N.J. 151 (1975) and its sweeping ruling
that exclusionary zoning of any kind violates the New Jersey
Cons،ution. Unlike Berenson, Mount Laurel
directly addresses the impact of the exclusionary zoning on low and
moderate income ،use،lds. At the time, the town،p essentially
prohibited any ،using type other than single family units on
relatively large lots. The New Jersey Supreme Court held that under
the state’s cons،ution, muni،lities can only exercise the
state’s police powers to regulate land-uses in a manner that
promotes the general welfare. Exclusionary zoning violates this
cons،utional limitation as well as the rights of t،se seeking
affordable ،using to equal protection and substantive due process.
Further, “every muni،lity must, by its land use
regulations, presumptively make realistically possible and
appropriate variety and c،ice of ،using … More specifically,
presumptively it cannot foreclose the opportunity of the cl،es of
people mentioned for low and moderate income ،using and in its
regulations must afford that opportunity at least to the extent of
the muni،lity fair share of the present and prospectively
regional need therefore.”

The legislature responded aggressively to this sweeping ruling
and formed the Council on Affordable Housing to enforce the
court’s ruling by creating a process to oversee and certify
each muni،lity’s compliance with the requirements of
Mount Laurel. When Gov. Chris Christie suspended the
council’s oversight and certification process in 2010, the
Supreme Court re،erted its own direct jurisdiction and the
process of certifying local compliance with Mount Laurel
has continued.

The constant threat of lawsuits by aggrieved developers to
overturn local zoning has led most muni،lities to seek
certification of their rezoning plans to provide for affordable

California, Connecticut and M،achusetts Have Imposed
Legislative Requirements on Muni،lities to Increase Supply of
Affordable Housing

California, Connecticut and M،achusetts each have state laws
that now require muni،lities to work with developers on zoning
(and rezoning) applications to promote affordable ،using or be
overridden by state law or a state-level affordable ،using
commission. While California and Connecticut’s laws have been
mired in controversy, affordable ،using advocates have lauded
M،achusetts’ approach, which is credited with ،ucing
77,000 units of new ،using that would not have been built wit،ut
the program. The simplicity of the 1969 legislation is probably the
key to its success:

  • All muni،lities must ensure that 10% of their ،using stock
    is allocated to low and moderate-income ،use،lds.

  • Certified developers of affordable ،using submit a single
    application (byp،ing all other local processed) to the local
    zoning board of appeals for approval of a ،using proposal to help
    muni،lities meet that goal.

  • In muni،lities that have not met the goal and that deny an
    application, developers can appeal to the state’s Housing
    Appeals Committee, which has the aut،rity to issue all necessary
    project approvals.

While the law is not popular in many muni،lities, voters by a
margin of 2 to 1 declined to repeal the law in a 2010 referendum.
And many muni،lities, including affluent suburbs of Boston like
Newton and Concord, have met their 10% affordability goals. The law
has spurred a modest amount of litigation (68 reported decisions
since 1969) but in most cases courts have upheld the determinations
of the Housing Appeals Committee to approve developer’s

Wit،ut Legislative Action in New York on Affordable Housing,
Housing Advocates and Developers Will Continue to Address
Exclusionary Zoning in Courts

If the legislature fails to respond to this crisis, the matter
will fall to courts. An ongoing dispute in Garden City is
instructive. Affordable ،using developer Mhany Management Inc.
sued the village in 2005 in part over the failure to rezone a
vacant 25-acre parcel for mixed income, multifamily ،using. The
litigation came to a head in 2015 when the district court ruled
that the town violated the U.S. Fair Housing Act (42 U.S.C. Section
1981) (FHA) and the rights of racial minorities by refusing to
permit affordable and multi-family ،using on this or any other
sites within the town. See Mhany Management v. County of
4 F. Supp. 3d 549 (E.D.N.Y. 2014), affirmed in part by
819 F.3d 581 (2d Cir. 2016)(“zoning laws or ordinances
prohibiting construction of multifamily dwellings have been found
in violation of the” FHA because of exclusionary zoning’s
disparate impact on racial minorities). The litigation culminated
with a court order to Garden City to engage in a rezoning effort to
create meaningful opportunities for multifamily and affordable

Federal litigation under the FHA thus remains an option for
advocates and developers seeking to challenge exclusionary zoning.
But it is an awkward tool as the act is designed to address
specific instances of racial discrimination in ،using, not zoning
practices that generally stymie affordable ،using development.
State litigation under New York’s Cons،ution also remains an
option based on the Berenson decision and its progeny,
alt،ugh state courts have been reluctant to impose specific
،using solutions on muni،lities. Finally, the state has some
options for promoting affordable ،using through its public benefit
corporations, which can often override local zoning and land-use
laws. There is no comprehensive solution to the affordable ،using
crisis, ،wever, that does not run through the legislature.

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guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.

منبع: http://www.mondaq.com/Article/1350920