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TESTIMONY
Testimony by Basha Gerhards from the Real Estate Board of New York on development costs and process inefficiencies
2:54:25
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3 min
Basha Gerhards from the Real Estate Board of New York (REBNY) testifies that NYC's development process is significantly longer and more expensive than in other US locations, hindering housing production. She highlights burdensome permitting across multiple city agencies and criticizes ULURP for applying the same lengthy process to projects of vastly different scales and impacts, rendering smaller projects infeasible. REBNY advocates for charter changes that differentiate review processes based on project characteristics (size, impact) rather than just land use mechanism, prioritize citywide housing needs over local concerns, and ensure predictable, timely permitting.
- NYC's development process is cited as up to 3x longer and 2x costlier than elsewhere.
- Multiple city agencies have overlapping and unpredictable permitting requirements.
- ULURP's one-size-fits-all approach harms smaller projects disproportionately.
- REBNY suggests tailoring review processes to project size and impact.
- Calls for prioritizing citywide housing needs and ensuring predictable permitting timelines.
Basha Gerhards
2:54:25
Alright.
2:54:26
Good evening, commissioners.
2:54:28
Can folks hear me okay?
2:54:30
Yeah.
2:54:31
Great.
2:54:32
Good evening, commissioners.
2:54:33
My name is Basia Gerhards, and I serve as the senior vice president for planning at the Real Estate Board of New York, the city's leading real estate trade association.
2:54:41
Thank you for the opportunity to testify this evening on the challenges of building sufficient housing to address our crisis.
2:54:47
Unfortunately, recent positive efforts such as the City of Yes for Housing opportunity do not change the fact that today, the New York City development process is up to three times longer than anywhere else in the country and costs up to twice as much on a per unit basis.
2:55:01
There are several key considerations in the build or not build decision that a developer must make before it can secure financing to start construction.
2:55:09
In addition to determining whether a proposed project will generate enough revenue to cover the cost of construction, operations, and maintenance, developer must conduct due diligence around zoning and tax program requirements.
2:55:20
A developer will not choose to build if its project will not generate a sufficient return to compensate for the high risk and large upfront cost of development, nor will a lender provide the debt needed for development unless the project's revenue is sufficient to support the size of the loan.
2:55:35
City government process has a significant role in this calculation.
2:55:39
City agencies including DOB, FDNY, sanitation, DEP, DOT, LPC, PDC, and parks each have permitting authority, and a project that is as of right under zoning will nevertheless need to obtain permits from some or all of these agencies.
2:55:56
Each of the permitting agencies has a different pathway for permit filing, review, and issuance.
2:56:01
A related challenge is the fact that ULARP applies to all projects that require land use approval regardless of project size or the amount of housing proposed and without a distinction between those projects with the potential for environmental impacts.
2:56:15
By treating modestly sized housing projects much the same as larger, more complex projects, the process adds cost and delays to smaller projects, making them financially infeasible.
2:56:25
The commission's proposed charter changes in the area of land use should be designed with a goal in mind of finding better ways to stimulate housing production.
2:56:33
While the construction of affordable housing is inherently constrained by the city capital budgets, federal policy, available municipal land, and staffing levels at the relevant housing agencies.
2:56:43
The charter alone cannot solve those issues, but it can play an important part in increasing the affordable housing pipeline by building a framework focused on increasing production.
2:56:52
Changes to the charter should consider whether projects that vary widely in size, complexity, and in the potential for environmental issues should continue to be treated alike in the approval process.
2:57:02
Housing projects, regardless of their size or environmental profile, are serving a citywide need.
2:57:08
The ability of these projects to move forward should not be determined under a process that elevates local perspectives above citywide concerns.
2:57:16
This may not require a reimagined process altogether, but instead a new determining threshold for what enters ULIP in the first place.
2:57:23
And finally, all permitting should be predictable and time certain.
2:57:27
Thank you to the members and staff of this commission for undertaking this necessary work, and appreciate you staying so late.