Village Preservation is Wrong on SoHo
Following two years of campaigning from our organization, Open New York, and a broad showing of support from citywide affordable housing, anti-displacement, and fair housing groups, New York City announced plans last year to rezone two of the wealthiest neighborhoods in the city — SoHo and NoHo — for more mixed-income housing. Given the city’s longstanding practice of only rezoning lower-income and industrial neighborhoods for new housing growth, this marked a significant step forward from the status quo, and has been welcomed by The New York Times, New York Daily News, and New York Post, in a broad showing of civic support.
And yet, support was not universal. This past March, Village Preservation, (previously known as the Greenwich Village Society for Historic Preservation), released a “report” attacking the City for these plans. It deserves to be stated: Village Preservation is not an affordable housing, fair housing, or anti-displacement organization — their mission, as they see it, is to maintain the current scale and “character” of various neighborhoods downtown, including SoHo and NoHo. As such, their report is filled with questionable assumptions and plain inaccuracies, working backwards from the overarching idea that the rezoning — and the mixed-income housing it would enable — must be stopped, at all costs.
Nevertheless, Village Preservation’s bold campaign in favor of the status quo does have the potential to alarm many — especially those who might not have the time to double check their assertions, or who aren’t necessarily inclined to trust the City’s initiatives from the outset. As such, we felt the need to correct the record, and provide needed perspective for anyone who may now be questioning the City’s plans. Despite Village Preservation’s consistent misinformation, the SoHo / NoHo rezoning only stands to increase affordable housing in the neighborhood and further integrate SoHo on both a racial and socio-economic basis.
Six Flawed Contentions
Village Preservation makes 6 general arguments against the city’s plan, each of which are flawed in their own way.
- The neighborhood is already socio-economically diverse.
- New mixed-income developments will make the neighborhood less socio-economically diverse.
- Developers will choose to build office buildings rather than mixed-income housing.
- The rezoning will incentivize the demolition of rent-regulated housing.
- New mixed-income developments will make the neighborhood less racially diverse.
- The rezoning will lead to indirect displacement in Chinatown and the Lower East Side.
We’ll dive into each of these, and unpack why Village Preservation’s contentions don’t hold water.
Argument 1: The neighborhood is already socio-economically diverse.
Village Preservation begins their report admitting that “the neighborhood currently contains a considerable percentage of high income earners.” They also attempt to argue that SoHo and NoHo are also not as wealthy as they are commonly portrayed, and in fact contain “a broad diversity of income levels.” They also immediately leap to misdirection, arguing that the neighborhoods have “many fewer high income earners than the city’s upzoning would create.” But before we delve into that misdirection, which is the thrust of their next argument, we should concentrate on their first contention — that the neighborhood is already socio-economically diverse — which is a crucial argument for the preservationist organization.
As Village Preservation surely knows, one of the foundational arguments for the SoHo/NoHo rezoning was equity in development — the de Blasio administration has not rezoned any white, wealthy neighborhoods for new housing growth, so rezoning SoHo and NoHo would mark a significant shift towards these types of neighborhoods allowing their fair share of construction. Almost half of all new construction in New York is concentrated in just 10 neighborhoods — in either fast-gentrifying neighborhoods like Bushwick, Bed-Stuy, and Mott Haven, or formerly non-residential neighborhoods, like Downtown Brooklyn, Long Island City, and the Far West Side. More equitable development would ask more of wealthy neighborhoods like SoHo and NoHo.
That said, if SoHo and NoHo weren’t wealthy, it would undermine that high-stakes symbolism. So given Village Preservation’s long standing opposition to the rezoning on purely aesthetic grounds, it’s understandable that they would also try to suggest that the neighborhood is more socioeconomically diverse than the City gives it credit for.
They start with a chart denoting the total socioeconomic breakdown of the neighborhood, to demonstrate that there are people who live at all income levels within SoHo/NoHo. For example, Village Preservation claims that almost half of SoHo and NoHo’s residents make under $99,999 a year, and more than 20% of households have incomes below $32k. But beyond admitting that the median income in SoHo/NoHo is above 100k, these stats are misleading — by its very definition, median household income means that half of the households have incomes below this median, and you see a similar breakdown in any wealthy neighborhood in New York City. By contrast, the median household income of New York City itself is just 60k — half above, half below — which underlines how wealthy and unrepresentative SoHo and NoHo in fact are.
In addition, the Village Preservation data itself is misleading, as the census tracts that Village Preservation uses include Census Tract 41, a more racially and socioeconomically diverse tract than the rest of the rezoning area. Tract 41 includes just three blocks of the rezoning area, but because SoHo is so incredibly segregated from its surrounding communities, including this district makes a substantial difference in the demographic data for the area. Upon removing Tract 41, the median household income of these census tracts shoots up from $104,000 to $117,000.
Even without Tract 41, the census tracts that Village Preservation uses contain large swathes of area outside the rezoning area, which generally adds noise to their data analysis. In analyzing the demographics of SoHo and NoHo, the City used Census data more firmly within the rezoning area to estimate that 40% of residents make over $200,000, and also that 46% of residents own their own home.
This last point is especially important, because income is not the only measure of wealth in a community, especially as many SoHo and NoHo residents are retired or semi-retired homeowners. Look no further than Sean Sweeney, the leader of the SoHo Alliance — after buying his loft for about $300k in the 1980s (inflation-adjusted), he put his savings into the stock market and retired in his 40s. Without a formal job, Mr. Sweeney’s current income is likely not very high, but with that backstory, he likely is very wealthy. The median home value in SoHo — as Village Preservation later admits — is well over a million dollars, and retail there is so profitable that many homeowners are not even on the hook for property taxes, which their buildings can use ground floor retail income to pay. SoHo is likely far less socioeconomically diverse than Village Preservation attempts to argue.
Argument 2: New mixed-income developments will make the neighborhood less socio-economically diverse.
Village Preservation’s second argument against the SoHo plan is that the rezoning will make the neighborhood less socio-economically diverse. They make this argument in tandem with their first — after modeling out assumptions for the demographics of new buildings, they use them to suggest (again) that the neighborhood is more diverse than it’s given credit for. Then, they suggest that new construction will only make the neighborhood less diverse, as market-rate apartments would have “dramatically higher housing prices than the current neighborhood.”
Yet there are several flaws with this analysis. The first is that their model for the demographics of new buildings is fundamentally misleading and self-serving, and statistically unsound by any reasonable standards of modeling. For example, they attempt to argue that all residents of new market-rate apartments will make over $1 million in annual income.
As they note, “this estimate of the income level for residents of the market-rate units in new developments under the city plan comes from a review of sales prices of all new developments in or within one block of the proposed SoHo/NoHo rezoning in the last three years. The average sales price was $6.437 million.” However, this is based on an extraordinarily small sample size of apartments — fewer than 40 units, across just 6 buildings, over three years — and with one building outside the rezoning area itself. It tells us very little about how an influx of (say) 500 new apartments might rent or sell on the market.
That said, this extremely small sample of 39 new apartments tells us something important about the housing market in SoHo and NoHo — although it is something Village Preservation completely misses. SoHo and NoHo are highly in-demand neighborhoods, with excellent transit access to two of the largest job centers in the Western Hemisphere, and are also zoned for the highest-ranked school district in the city. Despite this tremendous desirability, it is also currently illegal to build new housing as-of-right in either neighborhood, due to the current zoning.
As such, the 39 apartments compiled by Village Preservation were built either through convoluted special permit processes or Board of Standards and Appeals (BSA) approvals — and very little new housing is available as a result. When you have a limited number of any in-demand resource — like, say, a new SoHo apartment — its price will reflect its scarcity. The eye-watering prices of new SoHo apartments today are more of a condemnation of the current zoning rather than any indication of the prices a more generous zoning framework would necessarily deliver over time.
Furthermore, the Village Preservation report doesn’t acknowledge any kind of influence that new development may have on the prices of current housing. SoHo’s paucity of new housing doesn’t just ensure that its new buildings will be expensive, but also that its existing homes will continue to rise in value, as they have been. This works quite well for current homeowners — if you want to live in SoHo, buying from them is essentially your only shot. In fact, when discussion around rezoning was first kicking off, Sean Sweeney, the head of the SoHo Alliance, explicitly celebrated how high property values had become under the current zoning.
In contrast, by reducing the scarcity of housing in the neighborhood, new development would put downward pressure on housing prices in the neighborhood generally. While this idea is a little counterintuitive, it has strong backing in academic research, where papers such as by Evan Mast and Xiaodi Li have independently shown that the supply effects of new market-rate housing drive down housing costs in general.
Through this dynamic, new market-rate housing could help increase the socioeconomic diversity of the neighborhood, even if it is more expensive than existing homes, simply by pushing down the price of that older housing stock. It is worth noting that neighborhoods like the Lower East Side and Chinatown — which allow far more new market-rate construction than neighborhoods like SoHo or NoHo — have also done a far better job at allowing low-income people to continue living there.
It also deserves to be noted that the vast majority of new housing that has been developed under the Mayor’s Mandatory Inclusionary Housing (MIH) framework has been rentals — not condos — which generally cater to a younger, less wealthy, and more diverse population. This is because condo development would necessarily forgo a generous tax break for rental developments that include affordable housing, known as 421-a. That Village Preservation does not even consider rental development as a possibility shows how unserious their methodology is.
Last but not least, this all pertains to any market-rate housing built, rather than the below-market-rate housing that the rezoning would also provide. Advocates ought to keep fighting for the inclusion of the deepest affordability option, MIH Option 3, to ensure the highest level of integration within new developments. Open New York will continue to do so.
Argument 3: Developers will choose to build office buildings rather than mixed-income housing.
Village Preservation’s third argument is that “under the city’s plan, new development which is projected to be residential is at least if not more likely to end being developed for commercial uses, with no affordable housing” — that is, that developers will choose to build office buildings rather than mixed-income housing. For what it’s worth, this is the only argument of theirs which might hold any water.
The City’s current proposal allows for substantially greater commercial densities than are currently allowed, in addition to residential. As commercial developments would not need to provide community benefits like below-market housing — where residential developments would — there is a risk that developers would choose to simply build commercial space rather than residential, especially as office space in SoHo and NoHo is similarly in high-demand. (SoHo, in fact, is itself one of the city’s densest job centers after Midtown and the Financial District.)
Nevertheless, Village Preservation is being completely disingenuous in this critique, as it applies equally to their own “Community Alternative” Plan for SoHo/NoHo. This plan, which Village Preservation has proposed that the city adopt instead of its current plan, mandates that any new housing include more below-market-rate housing, with no corresponding increase in market-rate density to help pay for it. At the same time, their plan includes zero provision against commercial development, which according to their own logic, would solely result in commercial development. Once again, it is apparent that Village Preservation’s priority here is maintaining industrial density limits imposed in the 1960s, not actually building more affordable housing.
By contrast, since the release of the city’s proposal, Open New York has consistently argued in many public meetings and in members’ written comments that the allowed commercial densities are too high. The solution here is clear: lower commercial densities and maximize residential densities, rather than reject the rezoning wholesale.
Argument 4: The rezoning will incentivize the demolition of rent-regulated housing
Village Preservation’s fourth argument is that the rezoning will incentivize the demolition of rent-regulated housing, which in turn, might be their most offensive argument. Beyond retirees whose wealth is in property, not income, the only low-income people who live in SoHo and NoHo are rent-regulated tenants, so it is regrettable that Village Preservation stoops to inducing needless fear in a population that may already live on the margins of the neighborhood. Again, Village Preservation is not a tenants’ rights organization, but a preservationist outfit.
It is highly unlikely that the rezoning will result in any demolitions of rent-regulated housing. Tenants in these buildings have rights, recently strengthened in 2019 — developers would not be able to demolish these buildings without the express consent of the tenants, which in turn would likely require buyouts. In turn, developers do not consider these buildings to be easy development sites — it is far likelier that owners of rent stabilized buildings will simply sell their ‘air rights’ to neighboring development sites without residential tenants.
Importantly, this is not to say that a rent-stabilized building could never be demolished, but it is far less likely than any comparable low-rise site, and would not occur in the absence of an agreement between a building owner and their tenants. In making their argument, GVSHP can only provide evidence of just four Lower Manhattan rent-stabilized buildings that have been redeveloped, and all before 2019. If this were such a common occurrence, surely they could provide more examples of it happening in the recent past, under the current post-2019 rent law — and the fact that they don’t reveals how uncommon the situation really is.
And while Village Preservation does not make this argument explicitly in their report, their Executive Director, Andrew Berman, has suggested in public settings that new rent laws make demolition more likely, as redevelopment is now one of the few ways that building owners can still remove buildings from rent regulation. But nothing in the 2019 rent laws removes the protections tenants already have, or makes this process any easier — if the new rent laws made this sort of deregulation more common, it again begs the question of why Village Preservation doesn’t provide a single example of it occurring after 2019.
Lastly, it is exceptionally rich to see Village Preservation protest that the largest upzonings are set to take place in the areas with the most rent-regulated housing, on the edges of SoHo and NoHo. The only reason the upzoning is most generous in these areas is because an upzoning in the historic districts of SoHo and NoHo (where owner-occupied lofts are more common) would see even greater resistance from preservationist organizations like Village Preservation. If Village Preservation would instead prefer more housing in the historic core of SoHo to assuage these fears, we would be happy to encourage the City to oblige them.
Argument 5: New mixed-income housing will make the neighborhood less racially diverse
Village Preservation’s fifth argument against the rezoning is that the “city’s upzoning plan is unlikely to make the affected area more diverse, and may make it less so in key respects.” They go so far as to suggest that the rezoning is likely to increase “the percentage of white residents, and [decrease] the percentage of Asian residents.” Still, their projections are heavily flawed — Village Preservation has no idea what the demographics of new buildings might be, much less how new housing could shift the broader demographics of the neighborhood.
Nevertheless, Village Preservation begins their argument here by noting the neighborhood’s current demographics — on the theory that if SoHo is already an integrated neighborhood, it lessens the racial justice case for the rezoning. Yet once again, their model is skewed through the inclusion of Census Tract 41, which is 57% Asian. Upon removing this single census tract, which hosts a tiny, low-density sliver of the rezoning area, the area they measure goes from 59.8% white to 72% white. (As a point of comparison, New York City as a whole is just 32.1% white.)
But the City’s data here is even more reliable than the American Community Survey (ACS) data that Village Preservation uses. For ethnicity, the city was able to use Census block data — not Census District data, which Village Preservation uses — for a full count of the exact rezoning area. This data is older, from 2010, but also less noisy, as many of the seven Census Districts that Village Preservation uses for its analysis include areas outside the rezoning area, even outside of District 41. And according to this more accurate data, the racial breakdown of SoHo/NoHo is in fact 77.5% white, 11.7% Asian, 5.9% Hispanic and 4.9% other ethnicities. Village Preservation’s analysis is a dramatic departure from this data, which suggests that the population of SoHo and NoHo have radically changed over the last decade, or Village Preservation is out of their depth when it comes to demography.
And yet, unfortunately, this amateur demography continues. Village Preservation also models out the racial demographics of new buildings in an attempt to argue that they will make the neighborhood less diverse overall. However, they base the demographics of market-rate homes on their income projections — which as we’ve explained earlier, are hopelessly flawed for a number of reasons. But even more embarrassingly, they use estimated income levels to estimate the demographics of new residents by using the current demographics of the neighborhood as it already exists.
From this, Village Preservation works backwards to determine that even with their inclusionary below-market homes, new development will only leave the neighborhood richer and whiter — and specifically, will endanger and displace the Asian residents in the neighborhood, especially paired with Village Preservation’s baseless assertion that the rezoning will destroy rent-stabilized housing, where many Asian tenants live. (Ignore, for a moment, that a large majority of these residents live outside the rezoning area and SoHo proper.) In their words, “while these new developments have tremendous potential for destroying existing affordable housing containing a diverse array of income levels and a significant percentage of Asian residents, they will add housing which is richer and whiter than the neighborhood as a whole currently, with at best a very small increase in the share of black residents and a much more substantial decrease in the share of Asian residents.”
This is exceptionally flawed analysis, especially as SoHo is already so much whiter than the city as a whole — thanks to its extremely exclusionary zoning, which has not allowed any substantial new housing since artist lofts were legalized in the 1970s. There is no reason to assume that the demographics of new development will be as white as Village Preservation claims. As a point of comparison, the census tract that contains Court Square in Long Island City — Census Tract 19 — has seen thousands of new homes constructed since the area’s rezoning in 2001. In fact, over 70% of homes built in this district have been built after the year 2000, the vast majority being market-rate without affordable set-asides, as the area was rezoned before the city adopted its Mandatory Inclusionary Housing (MIH) policy. By Village Preservation’s logic, this should be one of the whitest neighborhoods in the city — although, inconveniently for their argument, it isn’t. The tract is substantially more diverse than SoHo, at 45.7% white, 36% Asian, and 11.1% Hispanic.
With all that said, there are two valid points that Village Preservation makes concerning the demographics of affordable housing in new developments, although the demographics of market-rate housing make up the bulk of their argument. First, they note that below-market housing will likely be skewed in a less diverse direction if the City applies its community preference policy, which sets aside 50% of affordable units for residents of the local Community Board. As Community District 2 (which includes SoHo and NoHo) is 74% white, and one of the wealthiest community districts in the city, this is a significant risk — albeit one that we recognized in our initial proposal for rezoning the neighborhood, when we proposed modifying community preference to include those who live or work in SoHo, to allow more New Yorkers of color, such as New Yorkers who work in SoHo’s many retail establishments. It’s a problem that could be ameliorated fairly easily, whether by expanding the community preference policy to more diverse areas, like all of Council District 1, by including those who work in the neighborhood rather than just those who already live there, or simply eliminating the community preference requirement for this rezoning, if our policymakers have the political will.
In addition, Village Preservation also makes an argument that “accessing affordable housing in private developments such as these favors those with social capital to know about such opportunities and be able to navigate the bureaucracies to secure the spots. This would undoubtedly further skew these [demographic] numbers.” This is a fair point — the applicants for the affordable housing lottery may indeed have more social capital than others within their income brackets. Still, over 60% of the awardees for affordable housing (at least, those for whom we have demographic data) are either Black or Hispanic, and only 12% are non-Hispanic white. Even if people who win the affordable housing lottery have more social capital than their financial peers, a rezoning would help integrate SoHo and NoHo — especially if the rezoning includes the community preference reforms we’ve advocated for. (Furthermore, concern about social capital undermining affordable housing is much more relevant to the artist certification process for SoHo’s lofts — something Village Preservation seems to stand by.)
Argument 6: The rezoning will lead to indirect displacement in Chinatown and the Lower East Side
As a sixth and final argument, Village Preservation argues that the rezoning plan is likely “to add pressure for secondary displacement” in “more diverse and less wealthy directly adjacent areas of Chinatown and the Lower East Side.” While they don’t go into much detail into any exact mechanism by which this would occur, their suggestion that allowing greater densities in SoHo will cause negative effects in the surrounding areas is bad faith to the extreme, as demonstrated by their past advocacy.
In 2008, Village Preservation actively supported a proposal to downzone the East Village, or decrease the allowable heights and densities for new construction there. Chinatown activists protested this planned downzoning, reasonably fearing that it would shunt demand for housing into their neighborhood. If housing couldn’t be built in the East Village, there would be more demand for it in Chinatown. (Ultimately, the downzoning was passed over these objections.)
Still, in response to these protests, the Executive Director of Village Preservation, Andrew Berman, argued that what happened in one neighborhood didn’t necessarily affect another neighborhood over. Now, when an upzoning is at hand in his ritzy ‘catchment area,’ he argues the opposite. Having demonstrated their clear hypocrisy, Village Preservation’s opinion on the matter can be safely disregarded.
By contrast, at Open New York, we have always claimed that the lack of building in SoHo and NoHo has consistently pushed demand to Chinatown, the East Village, and the Lower East Side, causing high rents and displacement there. New building in SoHo and NoHo can help put this process into reverse. Our worldview is not simply based on what is convenient for us at a given time, but backed by academic research affirming that new market-rate development “reduces demand and loosens the housing market in low and middle income areas, even in the short run.”
Lastly, it deserves to be stated that Village Preservation is underrating the strength of communities across Chinatown and the Lower East Side, which have proven to be resilient over decades, and don’t need Village Preservation to pretend to stand up for them.
Conclusion
In a sense, all six of Village Preservation’s arguments are an acknowledgement that their strategies to date have not worked. When their usual hosannas to maintaining the character of the neighborhoods fell on deaf ears, they pivoted to accusing the Mayor of colluding to enrich his donors. This also went nowhere, as the push to rezone SoHo and NoHo did not originate with the Mayor, but with our organization, and the broad coalition backing a pro-housing rezoning. (One of the donors in question had also passed away, which itself did the argument no favors.) That said, this “report,” by virtue of its push to undercut the racial equity case for the rezoning, as well as its attempts to recast those who may be harmed by it, represents their strongest attempted case against the rezoning so far.
If you had a fairly racially and socioeconomically integrated neighborhood, and new mixed-income housing only stood to make it less so; if said housing would not likely be housing, but instead office development; and if this development would also incentivize the demolition of rent-regulated housing, while risking displacement in surrounding neighborhoods — then wouldn’t anyone oppose a rezoning?
Of course, most of these contentions fall apart upon further examination. SoHo and NoHo are not racially or socioeconomically integrated neighborhoods, but highly segregated, wealthy ones. New mixed-income housing has the clear potential to broaden socioeconomic and racial diversity in both neighborhoods. Far from endangering rent-regulated housing, new residential construction would put downward pressure on housing costs in SoHo, NoHo, and all the surrounding neighborhoods, and mitigate displacement risks in those neighborhoods by addressing root causes. The only claim worth entertaining is the possibility for commercial development to crowd out housing — which makes a far stronger argument to engage in the ULURP process and join Open New York’s call for the City to reduce those densities, rather than reject the rezoning wholesale.
Since the adoption of the zoning code, New York politicians have followed an unwritten, unspoken rule: do not rezone wealthy, residential neighborhoods to allow substantially more housing. At the end of the day, the SoHo/NoHo rezoning provides our first opportunity to reject this hopelessly reactionary policy, and Village Preservation provides no real rationale against doing so. We should reject their tired embrace of the status quo, and support the rezoning — and others like it in high-opportunity neighborhoods — for a more equitable future.
If you, like us, support the SoHo/NoHo rezoning, you can join us to testify in favor of it as it makes its way through the approvals process. The next scheduled hearing will be in-person, before the local Community Board, Manhattan Community Board 2, on June 23rd, at 6:30PM, at 55 Sullivan Street.
You can sign up at the link here.
There will also be a second hearing, via Zoom, the following day, June 24th, also starting at 6:30PM. You can sign up for the virtual hearing at the link here.
In addition, each of the decision-makers below will have a say in approving the rezoning, and each additional voice they hear supporting the rezoning will go a long way, especially if you are their constituent. If you live in their districts, please consider emailing or tweeting at them, but especially Council Member Margaret Chin, who will be the chief decision-maker here!
Margaret Chin, Council Member for Lower Manhattan, representing FiDi, Battery Park City, Tribeca, Chinatown, SoHo, NoHo, South Street Seaport, the South Village, Two Bridges and other parts of the Lower East Side. (If you live south of Washington Sq. Park, you’re likely in Chin’s District, and should definitely email her staff!)
Email: adrummond@council.nyc.gov
Twitter: @CM_MargaretChin
Carlina Rivera, Council Member for the Lower East Side, East Village, Gramercy, Kips Bay, and Murray Hill. Contact her if you live in her district!
Email: district2@council.nyc.gov
Twitter: @CMCarlinaRivera
Gale Brewer, Manhattan Borough President. Contact her office if you live in Manhattan!
Email: gbrewer@manhattanbp.gov
Twitter: @GaleABrewer
