Gothamist, David Brand, Jan 23, 2025

Could a 42-square-block swath of Midtown become the next “FiDi?”

More than two decades ago, the city enacted new tax incentives and tweaked zoning rules in Lower Manhattan to allow developers to turn old offices into apartments and construct brand new condo towers in the years after the 9/11 terror attack on the World Trade Center. It’s part of an area where the population grew by nearly 30% between 2010 and 2020, the second-highest rate of any of the city’s 59 community districts.

City officials now hope to pull off a similar residential transformation in a section of the borough near Penn Station and between Bryant and Madison Square parks. It’s an area where the office rental market has continued to struggle after the COVID-19 pandemic, and where housing is mostly prohibited.

“It’s one of the most centrally located transit- and job-rich neighborhoods in New York City going back generations,” City Planning Director Dan Garodnick told reporters at a briefing on the plan last Friday. “It’s unfathomable that in an area this central, with a housing crisis this dire, that if you wanted to build housing here, our own rules would simply not allow it.”

The Department of City Planning on Tuesday officially kicked off the process for rezoning blocks bound by 23rd and 40th streets and Fifth and Eighth avenues to allow for office conversions and skyscraper housing development. Mayor Eric Adams first proposed the Midtown South rezoning plan two years ago.

Garodnick said the proposal would fuel the creation of nearly 10,000 new apartments in an area consisting mostly of offices and commercial buildings. And he told Gothamist that the Financial District was a “great precedent” for the current plan.

“While each neighborhood has its own unique qualities, office conversions and residential development have succeeded in fostering a more vibrant, 24/7 neighborhood in FiDi and we look forward to bringing housing to Midtown South alongside its many varied businesses,” Garodnick said in an emailed statement.

The area around Wall Street, which used to clear out after the stock exchange’s closing bell, has undergone a two-decade transformation into a residential hub.

But the changes that led to Lower Manhattan’s residential development didn’t require the construction of any affordable housing. As a result, low-income renters remain locked out of the newly converted or constructed apartment buildings. Today, median rents in the Financial District outpace Manhattan as a whole, and the area has some of the city’s lowest poverty rates, according to an analysis by NYU’s Furman Center.

Community Preservation Corporation CEO Rafael Cestero, who led the city’s housing agency under Mayor Michael Bloomberg, said that’s where the Midtown plan differs.

“There’s a real opportunity to convert in a way that is more equitable and more affordable,” Cestero said.

Under current land use rules, developers must cap rents for low- and middle-income tenants in at least 25% of apartments built as a result of a rezoning. The Department of City Planning says its proposal could create up to 2,800 affordable units.

The city also wants to make use of newly enacted state laws that allow for larger residential development and office-to-residential conversions.

The area that Adams is proposing to rezone currently only includes 2,300 housing units in total, according to a City Planning presentation. Nearby sections of Manhattan, like Chelsea and Hell’s Kitchen, are much more densely populated.

Mitchell Moss, a policy and urban planning professor at NYU who advised Bloomberg, called the plan “long overdue.”

“It has so much transportation infrastructure,” Moss said of the area, referring to the nearby Penn Station and Port Authority Bus Terminal as well as the nexus of nearly every subway line in the city. “It was made for more housing.”

The plan would require approval from the City Council, which will hold a vote later this year. It already has the backing of Councilmembers Keith Powers and Erik Bottcher, who represent the area. Their support is key to the plan’s future because the full Council traditionally defers to local members when it comes to land use issues in their districts.

But not everyone is a fan. Community groups have advocated for more affordable housing and rejected other plans for the area, like a proposal to tear down and replace public housing buildings in Chelsea, while also adding luxury units on the same property.

Midtown South Community Council President John Mudd said the Midtown plan won’t produce enough housing for low-income New Yorkers who face the biggest shortage of affordable apartments. He said the “community is craving” units that average New Yorkers can actually move into.

“The city’s stripping away as much of the landscape as they can and handing it to developers,” Mudd said. “We do have housing needs, but they’re really talking about a drop in the bucket when it comes to housing for the people who really need it.”

Source: Gothamist