Planning and funding future NYC real estate.

The theme of 2007 so far has been change and growth.

The New York City real estate market has shown no signs of a slow down from office to residential, and all signals indicate this should continuing throughout the year.

Local and state governments are taking advantage of windfall tax proceeds to begin major projects to improve the city's infrastructure and environmental condition which will ensure that New York City continues to be the great city that it is today.

Recently Mayor Bloomberg unveiled his plan for the city's future.

In his PlanNYC, he presented a forward thinking, far reaching agenda that will help prepare NYC for the future and its anticipated population growth to 9 million by 2030. Some of the changes that were included in his plan are both zoning and transportation changes.

There is also a process underway to change the current building code and environmental requirements for properties to an international standard. These changes are all very important to property owners and will certainly impact values.

The city's land use plan is being reevaluated and more than 60 rezonings encompassing 4,500 blocks are being considered. Currently the East Village and Lower East Side are the subject of one study. The last zoning change to the area was in 1961.

On November 6, 2006, the city presented its plan to change the zoning for an area roughly bordered by 13th Street on the north, Grand Street on the south, 3rd Avenue on the west and Avenue D on the east. The city hopes to push a finalized plan through its land use review process this year.

The vast majority of the area, encompassing more than 100 city blocks, would be rezoned with a height cap of 80 feet. The zoning would end a height exemption available for most community facilities like dorms or hospitals, and would require new developments to build flush to the street line, preventing buildings from soaring high above the low-rise neighborhoods.

However, areas along East Houston, Delancey and Chrystie Streets and stretches of Second Avenue and Avenue D will be rezoned to allow developers to build up to 12 stories high, provided that 20 percent of their projects include affordable housing.

This is one method that the Mayor hopes will encourage the development of affordable housing--a focal point in light of the increasing rents and property values, in conjunction with residential vacancy rates around 1%.

The proponents of the rezoning say there has been tremendous development in the area that is out of context and scale with the character of the neighborhood. While some uses and properties would see a reduction in their buildable square feet, other would see an increase.

Another change affecting the East Village and Lower East Side is the Second Avenue Subway. Congestion pricing, east side access for the Long Island Railroad and extension of the Seven line west are all moves to reduce traffic and pollution and to improve the city's public transportation to prepare for the growing population.

Good access to transportation has been a focus of the rezoning studies and has an impact on property values as well.

There was a ground breaking for the Second Avenue subway in 1972 attended by Percy Sutton, Manhattan Borough President; Senator Jacob Javits; John Volpe, U.S. Secretary of Transportation; Governor Nelson Rockefeller; and Mayor John Lindsay. Obviously the project did not proceed. In April of this year there was another groundbreaking for the new "T" Line. The first phase will connect 96th Street to 63rdStreet and is scheduled to be completed by 2013. The entire span from 125th Street to Hanover Square is scheduled to be completed by 2020. The city has already slated some properties for condemnation along the route.

The last change underway that will affect properties citywide is the proposed revision of the building code. The proposal culminates four years of work led by the Department of Buildings, involving 400 professionals and 300,000 hours of meetings.

The idea is to adapt a new code modeled on the International Building Code. The International Building Code is a 664-page document. The city's current version is thousands of pages long. There are many items up for debate and some developers say that the changes will increase already soaring construction costs.

Only time will tell what changes are actually made into law, what projects will be fully funded and completed and which ones will fade away or sit dormant for 35 years.

Regardless, it is an exciting time to be involved in New York City real estate as values continue to soar and people from around the globe want to be a part of the action.

BY JAMES KINSEY, BROKER, MASSEY

KNAKAL REALTY SERVICES