Class C and B buildings were commanding commercial rents at rates between $51 and $62 per square foot on average before the pandemic, and many are currently offering steep discounts to attract tenants.
Provides sustainability and climate benefits
Commercial areas in NYC that are best suited for housing conversions — such as Midtown Manhattan — are dense, walkable, mixed-use areas with excellent access to public transportation. Households in these areas have among the lowest carbon footprints of any in the nation. Building dense housing around transit also reduces vehicle use and their associated pollution that harms human health and the environment. Encouraging new housing in dense, transit-accessible areas also increases quality of life and access to jobs, restaurants, shops and cultural activities.
Flexible Co-Living further reduces climate impacts by repurposing and adaptively reusing existing infrastructure. This reduces the need for new building materials and the embodied carbon associated with new construction and major renovations.
Regulatory Barriers to the Model and the Path Forward
A number of regulatory changes are necessary to facilitate the development of Flexible Co-Living Housing or other similar housing models. Housing development in NYC is dictated by manifold laws, codes, and amendments that have compounded over centuries. As we explore further in the following sections, New York State’s Multiple Dwelling Law and New York City’s codes and Zoning Resolution have stringent criteria guiding the construction, configurations, and uses of residential buildings. Variances, amendments, or waivers must be made to these regulations to proceed with the pilot.
Given the state of our housing crisis and the significant vacancy rate in our office buildings, we believe it is essential to permit reasonable exemptions for pilot projects to test innovative housing models like Flexible Co-Living to meet the housing demands of New Yorkers.
NYS Multiple Dwelling Law
New York State’s Multiple Dwelling Law (MDL) guides the construction and habitability of NYC apartments. The MDL includes provisions that either directly or indirectly prohibit office-to-residential conversions, co-living, or the use of interior windows. For example, residential floor area ratio (FAR) requirements within the MDL effectively prevent many commercial buildings from being transformed into housing.
The MDL also has highly detailed provisions around operable exterior windows, including general requirements mandating them in most rooms. In practice, this means that bedrooms, living rooms, and kitchens generally must have operable exterior windows, making it infeasible for housing units to have exterior windows in just a portion of the rooms and using interior windows for light and ventilation for the remainder.
New York State’s Multiple Dwelling Law (MDL) includes provisions that either directly or indirectly prohibit office-to-residential conversions, co-living, or the use of interior windows
To enable office-to-residential conversions broadly, 5BORO and other housing advocates have been pressing the State Legislature to allow existing commercial buildings across New York City to convert to residential use and to lift the residential floor area ratio cap to allow the local government to determine where higher density housing can be built.
Amendments or variances to the MDL would also be necessary to proceed with other components of Flexible Co-Living, such as interior window flexibility. A pilot would likely need to be authorized via legislation by the New York State Legislature. Therefore, 5BORO proposes that the City adopt these efforts as part of its overall housing agenda.
There has been precedent for legal changes to the MDL for narrowly-defined residential conversions. A 1982 amendment known as the Loft Law loosened requirements for conversions of commercial and manufacturing buildings to create loft housing for artists. This added thousands of safe, legal, and rent-stabilized loft apartments that were converted from buildings that were challenging to transform into traditional residences.
New York City provides additional regulation on the construction, configuration, and habitability of apartments through a series of codes, such as the building code, fire code, and energy code. There are a number of requirements throughout these codes that inhibit the use of communal spaces as required for co-living. NYC codes reflect the antiquated notion that housing is primarily intended for nuclear families, making it difficult to develop housing in line with emerging demographic trends and for non-traditional families as well as the large population of single adults in NYC.
For example, the City’s Housing Maintenance Code includes provisions that effectively banned the development of new co-living residences after 1954. The Housing Maintenance Code, Building Code and Administrative Code all put into practice the Multiple Dwelling Law requirements prohibiting more than four unrelated individuals from living together. Under these codes, no locks are permitted on interior bedroom doors, making it challenging for individuals to cohabitate in co-living arrangements. Landlords are also prohibited from offering leases on individual bedrooms within a larger residence, because this is considered the equivalent of multiple “families” occupying one dwelling.
In order to proceed with a Flexible Co-Living pilot, NYC Council would need to pass legislation allowing code-issuing City agencies the discretion to grant reasonable regulatory flexibility for the pilot. There has been precedent for this. The Commissioner of the Department of Buildings has the ability to grant flexibility to the Building Code for experimental or demonstration pilots to obtain knowledge and information. This authority has been critical for the City to test innovative concepts, such as through the Basement Apartment Conversion Pilot Program, which allowed eligible low- and middle-income homeowners in East New York and Cypress Hills to convert their basements into safe, legal, and rentable apartments.
In order to ensure enabling Council legislation is passed, 5BORO proposes that the City adopt the Flexible Co-Living pilot into its overall housing agenda. The agencies in the City’s Office Conversion Accelerator should also be directed to identify pathways for Flexible Co-Living to advance the model while still providing safe housing.
NYC Zoning Resolution
NYC’s Zoning Resolution further dictates how buildings can be used across the city, adding further challenges inhibiting the conversion of commercial buildings to co-living residences. First established in 1916, the Resolution divides land in NYC into three main zoning districts: residential, commercial and manufacturing. Within each category, buildings are divided into separate “use groups” that determine how they may function and what rules, regulations, and codes that they are subject to.
In order to legalize a Flexible Co-Living pilot, the Zoning Resolution would need to be amended, a process the City has already jumpstarted. In August 2023, the NYC Department of City Planning announced that it would seek to facilitate office conversions as a part of its City of Yes for Housing Opportunity zoning amendment process. The agency is looking to allow offices and other non-residential buildings to convert to housing anywhere in the city where housing is permitted under zoning, as well as to allow for conversions to diverse housing types such as shared housing and dorms. It also aims to allow commercial buildings built before 1990 to convert to housing — an update from the existing 1961 and 1977 cutoffs in various areas.
In order for the proposal to be adopted, it will need to go through a public review process and vote, involving Community Boards, Borough Presidents, and the City Council. 5BORO will continue to engage with City agencies and elected leaders to ensure these much-needed zoning amendments are designed to permit innovative models and are adopted.
Achieving Deeper Affordability