New York City Council clears way for new housing in wide swath of Midtown South

The New York City Council on Thursday unanimously approved rezonings in the Midtown South neighborhood of Manhattan to convert office space into apartments, clearing the way for more than 9,500 new homes along 42 blocks in the heart of the island.

The apartments are expected to house about 16,000 people, said mayoral spokesman William Fowler.

The rezoning, called the Midtown South Mixed-Use Plan, clears long-standing red tape dating back a century that, coupled with infrastructure limitations, makes it tough if not impossible for homes to be built and people to live in some parts of the area, long prioritized for office space and manufacturing.

The plan mandates a set-aside of permanently below-market rentals that are income-restricted. The estimated number of those units is as high as 2,900.

Also Thursday, the council approved a busway on 34th Street to prohibit most private vehicles between Third and Ninth avenues and to speed up public buses.

The new apartments, to be built in four geographic quadrants roughly between West 23rd and West 40th streets and Fifth and Eighth avenues, will help fill vacancies of office space that have risen into the double digits during the coronavirus pandemic and the rise of work from home.

The council’s vote was 43-0. The plan is aimed at tackling two problems at once: too much office space and too little housing, with a residential vacancy rate hitting the lowest in recorded history.

The commercial real estate broker Bob Knakal, chairman of BKREA in Manhattan, said the rezoning would likely lead to the creation of millions of square feet of new development and a significant percentage of older, functionally obsolete office space demolished in Midtown.

Those office buildings — with lower ceilings, interior columns and smaller windows — don’t draw tenants like more modern developments, particularly when paired with a high commercial vacancy rate.

"No matter how much money you put into an older office building," he said, "you can’t make it truly competitive with new construction."

Knakal predicted the rezoning would turn the area into the "coolest place to live."

"There’s no reason why this area should be as dumpy as it is," he said in an interview. "You’re close to Port Authority. You’re close to Penn Station. You’re close to Grand Central. This should be a booming, booming area, and I think it will be."

Councilman Keith Powers (D-Manhattan), whose district includes part of the rezoned areas, told Newsday the plan would mean businesses continuing to thrive — but complemented by more residential neighbors.

"Some people are going to be able to live, probably, blocks away from where they work," Powers said. "That’s great."

Mayor Eric Adams, who has set a moonshot goal of 500,000 new homes over the next decade, had shepherded the rezoning and will oversee its implementation.

"Midtown South is home to some of our city’s most iconic parks, buildings, and businesses, but for too long, outdated zoning has stopped it from actually being a home for many New Yorkers," Adams said in a celebratory news release. "Today, we are changing that."

Although the office vacancies are relatively new, the housing crisis is not, worsened by a shortage of new apartments; the consolidations of multiple units into singular, luxury ones for the wealthy; a long-standing homeless problem; and the influx of tens of thousands of foreign migrants.

The city's residential vacancy rate is a record-low 1.7%, and even as demand surges, on a per capita basis New York permits a fraction of new housing compared to other large cities like Boston, Seattle and Washington, D.C., according to a report from The Pew Charitable Trusts.

Long Island is even more stringent, driving up prices locally and across the region: Among the United States’ 100 biggest counties, Suffolk and Nassau permitted less new housing per capita from 2013 to 2022 than all but one county — in Ohio — according to Bloomberg News.

By Matthew Chayes

matthew.chayes@newsday.comchayesmatthew

Matthew Chayes, a Newsday reporter since 2007, covers New York City.