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The building at 25 Water Street (formerly known as Four New York Plaza) was built in 1969 as back-office space for the now-defunct Manufacturers Hanover Trust Bank. Intended largely to house data processing facilities (in an era when computers took up tens of thousands of square feet of space), the original building had narrow windows and a fortress-like appearance. In a whimsical nod to the structure’s planned function, the architectural firm of Carson Lundin & Shaw designed a facade reminiscent of the dominant mode of information storage in the late 1960s – the data punch card.
While it appears likely that several hundred households at 25 Water Street will be protected by the affordability provisions of the 467-m program, known as Affordable Housing from Commercial Conversions Tax Incentive Benefits, some critics argue that the scheme is overly generous to developers and doesn’t deliver enough benefits to the public.
State Assembly member Deborah Glick, who represents much of Lower Manhattan in Albany, is seeking to alter the rules under which office buildings can be converted to apartment towers. Under proposed legislation sponsored by Ms. Glick, existing commercial buildings with a floor-area ratio (FAR) that exceeds 12 would be eligible for conversion to residential towers only if they set aside 40 percent of these new dwellings as permanently affordable housing.
Since 1961, the City’s zoning code has prohibited residential buildings with an FAR greater than 12 times the size of the lot on which a building is constructed. Theoretically, this means that a 10,000-square-foot lot cannot host a residential building with more than 120,000 square feet of internal space. Although this might sound like a straightforward ban on apartment towers taller than 12 stories, in practice residential structures are permitted to reach much greater heights – in part because the footprint of such towers is often much smaller than the lots on which they are built, and in part because a range of technical exceptions (such as internal mechanical spaces) and givebacks (such as public plazas, or set-asides for affordable units) allow for greater elevation. The FAR cap of 12 also applies to conversions of office towers to residential use.
Ms. Glick’s bill was introduced in response to a proposal by Governor Kathy Hochul, which sought to remove the FAR cap of 12 on residential development, but without any requirement for affordable housing.
“Removing the residential FAR cap City-wide, with no guaranteed affordable housing, is trickle-down economics in housing policy,” Ms. Glick argues. “The last few decades have shown us that overdevelopment under the current 12 FAR cap has led to an abundance of luxury units and a dearth of affordable housing. The crisis is in affordable housing, which is critical to retaining young talented New Yorkers and ensuring a more diverse population. Years of entreaties to developers to include affordable housing have yielded precious little.”
If enacted, Ms. Glick’s measure could prove transformative, because the remote-work trend that began during the Covid pandemic has yet to be meaningfully reversed, which has left millions of square feet of Manhattan office space empty, and has developers seeking new uses for their property.
For Lower Manhattan, in particular, the implications are profound, because the community is suffering more acutely from office abandonment by corporate tenants than other districts, such as Midtown, or Midtown South. A recent report from the Downtown Alliance notes that slightly more than 24.3 percent of Lower Manhattan office space is now empty, an all-time record.
Matthew Fenton
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