The Bottom LineThe Bottom Line

Rezoning by the Book, When the Book Ignores Race

Communities of color say the city needs to determine how a rezoning would impact minority-owned businesses.

A photo from the 2018 “Block Party for a Just Rezoning.” The sidewalk chalk message says “No R8, R9 zoning in Inwood.” (Photo by Oscar Perry Abello)

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Black, indigenous and other people of color are fighting back against generations of structural violence waged against them based on race. They’re fighting back in the streets, speaking names and honoring the memory of all those killed at the hands of police. They’re fighting back in city budget hearings, demanding to defund the police and redirect the funds to programs that would address their true needs.

They’re also fighting back in the New York State Appellate Division court, which last week heard oral arguments in a case where residents of the heavily Dominican immigrant Inwood neighborhood filed a lawsuit charging that the city should have followed their demand for a racial impact analysis before rezoning 240 acres of the neighborhood. The rezoning would allow developers to demolish existing residential, commercial and mixed-use buildings and replace them with even larger buildings, containing 4,348 additional housing units, about a third of which would be income-restricted, as well as adding 1.1 million square feet of commercial space to the neighborhood.

The original trial judge, Verna Saunders, who happens to be black, sided with the residents in December 2019. Her decision overturned the rezoning, which city council approved in August 2018, throwing developers as well as the city for a loop. The city immediately vowed to appeal, leading to last week’s video conference showdown before a panel of appeals court judges.

Even if the appeals court judges side with the residents, the fight will be far from over. “This is about process,” says Cheryl Pahaham, a longtime Inwood resident and a member of Northern Manhattan is Not for Sale, a co-plaintiff on the lawsuit. “The city might still do a type of [racial impact] analysis that gives them the conclusions what they want, no one’s telling them how to do it in this lawsuit, that’s a whole other battle we’re fighting.”

(Photo by Oscar Perry Abello)

A complex web of laws and regulations at both state and local levels govern the process for reviewing land use changes in New York City. It can take years, and hundreds of thousands of dollars or more in consultant fees, to produce the necessary studies to get proposed changes through the process. Local government agencies have to go through the same process as private applicants. In the Inwood case, the applicant is the New York City Economic Development Corporation, which has continued to push for the rezoning as part of Mayor Bill De Blasio’s flagship housing affordability plan, which relies in part on rezoning neighborhoods to trigger the mandatory inclusionary housing requirements that became law in 2016.

At the Pratt Center for Community Development in Brooklyn, deputy director Elena Conte has been reviewing the impact of previous land use changes in which a city agency was the primary applicant or sponsor in New York City. Two years ago, the Pratt Center published part one of Conte’s findings, which focused on residential displacement. Part two came out earlier this year, focusing on commercial displacement.

Commercial displacement is one of several key issues raised in the Inwood lawsuit. Of the dozen or so individual plaintiffs, four are business owners in the neighborhood.

One petitioner is a pharmacy owner, a Dominican immigrant, who employs all Domincan staff. But there is a demolition clause in the pharmacy’s lease, allowing the landlord to terminate the lease on short notice to build a new structure on the site, currently a one-story commercial structure.

Another petitioner owns a Chinese takeout and delivery spot, with a prime location right on top of a major subway stop, for 14 years and counting. In addition to fearing that the landlord won’t renew the lease after the remaining five years are up, the property taxes — which landlords typically pass through to tenants — have gone from $12,000, before rumors started circling about an Inwood rezoning, to now $22,000 a year. This petitioner also has a demolition clause in their lease for the ground floor of a two-story mixed-use property.

Another petitioner, a Dominican immigrant, inherited a taxicab repair shop from her husband’s family, which has been in business since the 1960s. Many taxicab drivers live in the neighborhood. According to court documents, the landlord evicted the business in 2017 to make way for a new charter school that would be built to serve anticipated new residents.

The lawsuit alleges that despite repeated requests for the city to study the potential negative impact of a rezoning on “small, minority-owned businesses,” the city failed to do so.

It wouldn’t be the first time. Looking at 14 different neighborhood-level rezonings approved from 2004 to 2019, Conte found there was not a single instance where the city determined there would be any significant “adverse environmental impact” from commercial displacement.

In each of those 14 instances, spanning two different mayoral administrations, Conte found that the city followed exactly the regulations laid out in what’s known as the CEQR Technical Manual. “CEQR” (pronounced ‘seeker’) stands for “city environmental quality review,” and the technical manual contains the local regulations for land use change applications to be in compliance with the State Environmental Quality Review Act, also known as SEQRA (pronounced ‘seek-ra’).

Passed in 1975, SEQRA defines “environment” broadly to include the physical environment as well as social and economic resources. SEQRA and the CEQR Technical Manual are supposed to make sure officials and the public have sufficient information to weigh the pros and cons of a proposed land use change in New York City. Under the New York City Charter, while the public has the right to advise on proposed land use changes, only the City Planning Commission and City Council have real veto power over land use applications.

Conte points out that part of the problem is that the land use application sponsor is the one who has to conduct the analysis, or pays a consultant to conduct the analysis. “It’s totally subjective, at the discretion of the authors,” Conte says.

So even following the CEQR Technical Manual to a tee, Conte says, environmental impact findings consistently contradict the eventual lived experience of each neighborhood rezoning, which saw dozens and in some cases hundreds of local businesses serving working-class communities of color pushed out of their existing locations and replaced with businesses serving new, wealthier, whiter residents who moved into the neighborhoods after each rezoning.

Even when the city determined that there was potential for commercial displacement due to a rezoning, it was able to say that there would be no “adverse environmental impact” due to the potential displacement — as was the case for the Inwood rezoning.

“The guidance is written in such a way that there are holes you could drive a truck through,” Conte says.

For example, “location, location, location” is such a tired refrain among business owners. And yet the CEQR Technical Manual says displacement only occurs if a business that loses its location because of a change in land use regulations “could not be relocated within the trade area or the City.” In other words, if a business could theoretically find a location anywhere else within the five boroughs of New York City, it doesn’t count as being displaced.

“The whole idea that if a business has to move but if there’s space anywhere in the five boroughs that is zoned for the same type of business, that winds up as not being considered displacement, it’s mind blowing,” Conte says.

The CEQR Technical Manual doesn’t even require that level of analysis for every business — only for “businesses that provide products or services that are deemed essential to the local economy that would no longer be available in its trade area.” None of the 14 neighborhood-level rezonings studied in the Pratt Center report identified a single such business that was worthy of analyzing whether pushing it out of the rezoning area would result in significant negative impact for the business or the neighborhood.

So even though the CEQR Technical Manual does instruct land use applicants to study the potential for commercial displacement as a result of the changes they propose, the guidelines for conducting that analysis allow a developer or the city to say if a bodega might get pushed out of its current location, as long as it can find another location anywhere else in the city, there is no “adverse environmental impact” from displacing that business.

“The definition of displacement is totally wacky, but so too are what they say counts as an important business or as a priority business that even deserves to be looked at,” Conte says. “It’s a seemingly robust way of looking at a problem so that people can write a section of a study, dismiss all the issues, and advance a project.”

For its Inwood rezoning application, the NYC Economic Development Corporation produced a study identifying 31 Inwood businesses that could be potentially displaced, employing an estimated 319 people. That included nine food service and drinking establishments, employing an estimated 100 workers. But the city’s study also identifies more than a hundred other restaurants in the area not at risk of displacement, employing more than 800 people. Because of that, the city’s study concludes, “the potential employment loss within this industry sector is not expected to be substantial, and none of these displaced businesses is uniquely dependent on its current location.”

Conte’s report puts forth a number of recommendations, starting with the city convening a task force of technical and economic development experts and other stakeholders to revamp the CEQR Technical Manual’s approach to evaluating business displacement. It also calls for NYC to conduct “a citywide business existing conditions analysis and use it to inform economic development policy.”

“There are more tools to address residential displacement, many of which have been really the product of organizing from frontline communities and activism,” Conte says. “Whereas it feels as though business displacement is something where officials drop a word, but are not really actively considering what it means or how does that fit into our economic development policy at all.”

The Inwood lawsuit argues that residents consistently demanded, throughout the land use review process, that the city study the potential negative impact of the rezoning on “small, minority-owned businesses” currently serving the neighborhood. The CEQR Technical Manual does not say that the city has to study that, but as a judge ruled in a separate but related recent case in another neighborhood, the city is not required to do only what the manual says. The city can go beyond that, if the situation warrants it.

Building on that precedent, in the Inwood case, Trial Judge Verna Saunders ruled that the situation warranted a racial impact analysis above and beyond the CEQR Technical Manual guidelines because it was a consistent concern that residents raised throughout the process. The city disagreed with the ruling, leading to last week’s oral arguments featuring attorney Michael Sussman representing the Inwood plaintiffs. Sussman is famously part of the legal team behind a fair housing lawsuit in Yonkers, New York, dramatized in the HBO mini-series, “Show Me a Hero.”

The connections to today’s broader racial justice struggles are more than just figurative.

State Senator Robert Jackson, who represents Inwood in the state legislature, has been leading Black Lives Matter marches and spearheading the successful legislative effort to repeal “50-a,” the law protecting the confidentiality of police disciplinary records in New York State. In between marches and whipping votes, Jackon’s staff were working with Inwood residents to draft an amicus brief in support of the Inwood lawsuit against the city. Senator Jackson also recently introduced a bill to update SEQRA to account for ongoing climate change mitigation needs. Some Inwood residents hope that state legislators can also add strong racial impact analysis requirements into SEQRA.

U.S. Rep. Adriano Espaillat, who represents the area in Congress, also filed an amicus brief in support of the Inwood plaintiffs. A Dominican immigrant, he is known for being the first person who entered the country undocumented as a child to be elected to Congress.

“No one can be sure how great the risk of displacement is because the City has refused to conduct a Racial Impact Study,” Rep. Espaillat’s amicus brief reads. “These potential impacts on members of racial/ethnic minority groups warrant investigation, and the City should be required to study, and to mitigate, them.”

And locally, there is a bill introduced to city council that would require the city to study the racial impact of all rezonings moving forward. The primary sponsor of that bill is Public Advocate Jumaane Williams, who has been one of the most vocal elected officials in support of Black Lives Matter. Inwood residents support the bill.

“This idea that the impact of these major land use actions on minority racial and ethnic groups is something that should be part of every land use process,” says Bonnie Walker, Inwood resident and an attorney who also worked pro-bono with State Senator Jackson and Rep. Espaillat to draft their amicus briefs.

“It’s something the city has really resisted but particularly with everything that’s going on, the disparate impacts of coronavirus, both the illness and the economic impact, the disparate treatment by police,” Walker says. “You have to be willfully ignorant not to at least consider that these major land use actions could be having a disparate adverse impact on racial and ethnic minorities.”

EDITOR’S NOTE: We’ve updated this story to clarify how Inwood residents are hoping Sen. Jackson can update SEQRA.

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter.

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Oscar is Next City's senior economic justice correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha and Fast Company.

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Tags: new york cityinclusionary zoning

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