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Zoning and regulatory process must be updated.

Very often, zoning and land use regulations lag far behind the advancement and needs of society in general. This is especially so in New York City, where the present Zoning Resolution, adopted in 1961, is both outdated and out of touch with the practical needs of many residents and businesses. As a result, New York City often is an inhospitable host to its residents and commercial enterprises, both of whom are leaving the city at an alarming rate. And by failing to update its zoning and land use laws, the city sends a negative signal to existing and potential business and property owners. This is an unacceptable situation in what is supposed to be the greatest city in the world. Change is necessary.

Sometimes, even a small positive sign is all it takes to let people know that their needs are being considered, and to increase their level of optimism about remaining in, or relocating to, New York City. Following are a number of zoning issues that, we believe, merit consideration by the powers that be. While relatively minor in the general scheme of things, examination of these issues may lead to solutions like the ones proposed herein. The proposed solutions could go a long way towards getting the right message to property owners and businesses in and around the city, namely, that New York City is a great place to live and do business, and that it will encourage reasonable expansion and development rather than see people and businesses flee to other cities or states.

Bulk vs. Use Variance

A variance is an authorization for the construction or maintenance of a building or structure, or use of land, which is otherwise prohibited by applicable zoning regulations. The zoning regulations themselves are generally grouped into two categories: "use" regulations, governing the types of uses permitted in certain defined areas; and "area" or "bulk" regulations, which govern the types and sizes of structures permitted on properties within a particular zoning district. A zoning board of appeals, pursuant to an underlying enabling statute, is generally given the power to grant both use and area variances. The enabling statutes typically do not make any distinction between the standards applicable to granting use or area variances. However, decades of case law dealing with the variance powers of zoning boards have made it abundantly clear that such a distinction does indeed exist.

The original 1916 Building Zone Resolution of New York City authorized either type of variance where practical difficulties or unnecessary hardship prevented a property owner or developer from complying strictly with the provisions of the ordinance.

This standard was applied very loosely, and it provided for relief in numerous cases which, many scholars argued, did not merit variance relief.

The present Zoning Resolution of the City of New York, like most zoning ordinances, does not explicitly distinguish between use and area variances. Rather, the variance authorization provision, Section 72-21, sets forth five findings that must be satisfied before any variance can be granted.

Despite the numerous court decisions from elsewhere around the state and country applying a less strict standard to area variances, the New York City Board of Standards and Appeals has consistently taken the position that all five findings of Section 72-21 must be satisfied regardless of the type of variance sought. This policy is based solely on the fact that there is no explicit distinction between area and use variances in Section 72-21.

The result of this restrictive approach is that all too often, minor bulk adjustments, infinitely more important to the owner of the subject property than in terms of their effects on the character of a neighborhood, are not permitted, and a business owner is faced with the prospect of relocating, demolishing portions of an existing building or restricting expansion. In any case, the City will almost invariably suffer a negative economic impact.

Under a system where a permitted day care center use with a one foot side yard deficiency must make the same showing in order to obtain a variance as a sewage dump seeking to locate in a residential neighborhood, something is terribly amiss.

A more reasonable approach would be to set up a separate set of standards to govern bulk variances. The main consideration of a zoning board in deciding on a bulk variance should be the impact of such a variance on the character of the community and the future use and development of adjacent properties. If such impact is to be very limited or non-existent, there is no reason to deny such a variance. Requiring a bulk variance applicant to prove uniqueness and/or unnecessary hardship will, in most cases, kill the application.

Signs

Under the present Zoning Resolution, it is virtually impossible to obtain a variance for a sign. Section 72-21 is the variance authorization contained in the ordinance. That section requires that its five findings be satisfied in order to permit any type of variance. Because of this, a sign variance will almost never, if at all, be granted. The problem stems from the fact that it is impossible to meet the requirements of paragraph (b) finding: (inability to earn a reasonable return) of Section 72-21.

Because it is very difficult to quantify the value of a larger or alternatively placed sign on a building, no applicant is going to be able to prove that it cannot earn a reasonable return on its investment without the non-complying sign.

A more reasonable approach would be to set up some type of special permit which would allow noncomplying signs under certain more appropriate conditions such as there being little or no impact on the neighborhood and/or that the applicant prove some type of practical need for the non-complying sign. At a time when the city is attempting to encourage businesses to remain or locate here, sign approval becomes very important. In that regard, some years ago, the Board of Standards and Appeals approved signs identifying the "ABC Building," the "Inmont Building," and other corporate headquarters. The Board also approved other signs, including an approval for the Greenwich Savings Bank which added small signs to their buildings on Lexington Avenue adjacent to Grand Central Terminal. These applications were filed under Section 72-01(b) of the Zoning Resolution.

At that time, the BSA liberalized their rules to allow these signs. Today, because the BSA will not allow a filing under 72-01(b) it's virtually impossible to secure a variance as described above, which means that there is no way for a company or business to secure a variance to install an identifying sign or logo on its building. If we want to encourage business in New York City, we must provide relief in appropriate cases for the installation of signs.

One-Family Homes

As presently drafted, the New York City Zoning Resolution does not provide any relief to the owners of one-family residences who may, for practical reasons, require a bulk variance. The problem here is similar to, although appreciably worse than, the situation encountered with bulk variances in general, i.e., proving an inability to earn a reasonable return.

You would be hard-pressed to find a situation in which the owner of a one-family house, the use of which is that of his or her primary residence, could make the (b) finding of Section 72-21 (economic hardship). The reason, of course, is that the purpose of owning the house is to have a place to live rather than as a vehicle by which to earn a "reasonable" yearly return.

Again, a more reasonable approach would be to set up some type of special permit or limited type of variance for one-family homeowners who can demonstrate some type of practical need for the variance.

Enlarging Retail Uses

Section 73-53 of the Zoning Resolution authorizes the Board of Standards and Appeals to permit, under certain conditions, the expansion or enlargement of certain manufacturing or related uses up to a maximum of 10,000 square feet of additional area. However, there is no similar provision for retail uses. Very often, the practical needs of a retail use may require that the retail use be expanded beyond what is otherwise permitted under the bulk provisions of the Zoning Resolution. Even for a relatively minor expansion, under present zoning, the only option for a retail use is to obtain a variance by proving unnecessary hardship. Given the time and expense involved in a variance case, not to mention the difficulty of proving hardship, it will rarely, if ever, be feasible for a retail use to attempt such an expansion.

There should be a special permit in place, similar to Section 73-53, which would permit limited expansion or enlargement of a retail use, obviating the need to attempt a variance application which is likely to be denied in that type of situation.

Limitation of Retail Use in Buildings

The Zoning Resolution now limits retail use to the ground floor in a building where there are residential uses on upper floors, except for new buildings in some Manhattan locations (Section 32-42 ZR). Often times, a business needs to expand to the 2nd floor but cannot do so if there are apartments above that floor. Because of this, retailers must leave the upper floor apartments vacant in order to use the 2nd floor for retail use, or in the alternative, not expand the business or expand but do so in violation of the Zoning Resolution. There must be some middle ground wherein reasonable expansion in such a situation is permitted to take place with adequate protection of residents above the expanding use. The present setup is too restrictive.

Conclusion

Too often, zoning regulations do not keep up, or in touch, with the needs of a constantly changing society. This is especially so in New York City, where numerous problems are encountered in attempting to enlarge or expand a building or business. Changes must be made to allow legitimate and reasonable expansion by small businesses and one- or two-family homeowners. The City is presently contemplating zoning changes to enable large retailers like Home Depot and K-Mart to locate within its borders. The City is also giving large monetary incentives to other big companies that stay in New York. However, no consideration is being given to potential zoning relief for small businesses and homeowners.

Perhaps the responsible zoning authorities should take note of some of the changes herein described. They will not solve all of the City's land use problems, but they are certainly a starting point for a deeper examination as to what can be done to stimulate growth in the City's economy. For decades and decades, New York City has prospered and grown, in large part, because of its hard-working residents and small business owners. It is about time that the City returns a muchneeded favor.
COPYRIGHT 1994 Hagedorn Publication
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1994, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:Insider Outlook
Author:Matos, Charles
Publication:Real Estate Weekly
Article Type:Column
Date:Nov 2, 1994
Words:1804
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