Tuesday, November 29, 2005

Down Zoning Reduces the Value of People’s Homes and Inflates Prices

For those people who think nothing about the down zoning. Consider this – you are devaluating people’s property, you are reducing the amount of housing stock and you are inflating the cost of apartments, especially for lower-income people.

Yes property can be worth less and still have inflated housing prices. Doesn’t make sense to you? Let’s look at an example. If a property is restricted to having 2 apartments instead of 5, even if the price of each of those two properties doubles the property will be worth less than if there were 5 apartments at the original price.

Example: Because of zoning restrictions two apartments go up in price from $100,000 to $200,000. The property is now worth $400,000. However if there weren’t zoning restrictions the building could have had 5 apartments. Let’s say that as a result of the increase in housing stock the value of each apartment stayed at $100,000. The property with 5 apartments at $100,000 is worth $500,000, the property with 2 apartments is worth $400,000. We have here a simple example where down zoning devaluates a person’s property and still inflates the cost of housing for everyone else.

Those of you who are concerned about housing prices and making this city more affordable should keep this in mind: every time you restrict building you take away from the owner of the property, you take away from other property owners in the neighborhood and you increase the cost of housing for everyone.

2 comments:

Anonymous said...

The new recently passed downzoning allows for 4 and 5 story buildings. It is true that the far has dropped from 2.43 to something like 2. My house and both of my neighbors' homes are already built to our max FAR and with the downzoning we will be over FAR. What started this downzoning was the abuse of community faculty housing bonuses to get around the generous 1961 Zoning levels. In 1961 Brooklyn was losing people to Long Island and elsewhere...white flight as it was called. These abuses such as 266 23rd Street's 9 story tower, were not addressed in anyway by the Dept. of Buildings. So local citizens. left with a sour taste in their mouths, started a grass roots opposition to what they saw as an unregulated attack on their neighborhood. The 1961 zoning regulations were fine until a few builders gamed the system to build 12 stories. Your site makes it seem like the South Slope is against all development but you are very wrong. There will be hundreds of new housing units coming into the market in the next two years. In a one block radius from my home there will be a little over one hundred new units...condos and apartments. You portray this area of Brooklyn as being a bunch of provincial issolationists and this is also wrong. My street has numerous teachers, architects, police officers, blue and white collar workers living side by side. Just the kind of people who make this city run. Our local grade school is much more racially diverse than many in this city. We support a women's shelter at the 8th Avenue Armory and a new city sport facility as well. I think if you look and compare the south slope to other Brooklyn communities you will see that we have welcomed as much new housing as others.

Gilbert Midonnet said...

Thanks for the imput. I know the area as I lived in it for years and just moved away. I know people who were scared by the change in the neighborhood and put up signs that their house was not for sale. Now that the neighborhood has changed they too want to sell their house. Guess what their property is worth less than before the downzoning.