When it comes to the tension between the global economy and New York City’s local economy, the battle of Amazon gets all the headlines, and community organizers are starting to score big victories — but not just against Amazon. While some bemoaned the loss of potential jobs and tax revenues as a result of the corporation’s decision to pull out from its plans to expand in New York, community organizers recently celebrated a win that could help clear the path for a different kind of economic development. After years of organizing campaigns calling for changes to protect land zoned for manufacturing, New York City Council approved a change to the zoning code in December 2018 that requires hotels to seek a special permit to develop in areas zoned for “light manufacturing.”
Of the 41,840 hotel rooms built in New York since 2007, about 10,000 are in such areas. Manufacturers that got their start in these neighborhoods have had to move elsewhere to grow, taking living wage jobs with them. They’ve moved farther and farther away from the affordable housing where some of their workers live — contributing to what researchers call “spatial mismatch.”
In the Greenpoint and Williamsburg sections of Brooklyn, Leah Archibald has been fighting against the invasion of hotels in manufacturing areas for years. The city and state have provided funding for Evergreen, the nonprofit she leads, to serve as a one-stop shop to support manufacturers in these neighborhoods that need help finding or connecting with tax credits, incentives, loans and real estate. Around 200 manufacturers a year go to Evergreen for support. Ten to 15 of those are looking for help securing a new or larger space where they can grow and hire more employees — or simply keep the ones they have.
“For businesses that are expanding, that have a relationship with us, we very, very frequently cannot find them space in our community and we pass them off to our brother and sister organizations in other industrial neighborhoods,” Archibald says. “Heartbreaking though it is … . For a while, some of the employees will do the commute, but over time it just becomes too much.”
In Jamaica, Queens, Aron Kurlander sees a couple hundred manufacturers a year that need support from the Greater Jamaica Development Corporation. Many are from other parts of New York City, and they want to stay in the city, he says, but he’s recently had to place some in the Long Island suburbs.
“We had an elevator parts manufacturer who desperately wanted to buy a building in Queens,” says Kurlander. “They had grown from 10-15 jobs to 30-40 jobs, but the numbers just didn’t work. They couldn’t find anything they could afford to buy, so they moved out to Nassau County [on Long Island]. That was a great company, minority-owned company, they wanted to stay in the city. The owner lives in NYC.”
This map shows which areas in north Brooklyn are zoned for manufacturing (purple), residential (yellow) and commercial (red). (Source: NYC Planning's Zoning & Land Use Map)
The part of the zoning ordinance that council amended in December hasn’t been updated since 1961 — when no one thought anyone would want to build a hotel in an industrial neighborhood. But hotels aren’t the only non-manufacturing uses competing for land zoned for manufacturing uses in New York. Self-storage providers, tech companies looking to set up in industrial loft space, as well as nightclubs, bars, and restaurants, are all after industrial real estate. However, unlike these other uses where the raw industrial structures can be part of the allure, hotel development generally involves demolition of industrial buildings to make way for new and generally out-of-context structures that would be costly later on to convert for industrial use.
“Things like hotels and self-storage, nightlife uses, are able to pop up [in manufacturing zones] as of right,” says Lee Wellington, executive director of the Urban Manufacturing Alliance, a national coalition with 800 members in 200 cities dedicated to urban manufacturing. “So you have this competition … without ever having to go to the department of city planning to request a special permit or request a zoning change. This is all happening without any regulatory muscle from the city.”
City Council’s move last year requires that hotel special permit applications go through the city’s standard land use review process, known as ULURP (Uniform Land Use Review Procedure), which includes nonbinding input from the community as well as a binding vote by City Council. The council typically defers to the member whose district encompasses the land use application request.
Despite a steep decline in manufacturing since the 1950s, jobs in the sector remain some of the highest-paying for those without a bachelor’s degree. Many manufacturing zones are located close to affordable housing in New York, a city where 72 percent of people walk, bike or take public transit to work. Archibald says the neighborhoods she serves have walk-to-work rates twice the borough average for Brooklyn.
According to the Economic Policy Institute, manufacturing jobs also still have some of the highest jobs multipliers, a measure of how many other jobs each job in a given sector creates through the supply chain — much higher than accommodation and food services.
New York City has made attempts to support manufacturing in different ways over the past decade or so. It created industrial business zones, or IBZs, in 2006, areas where the city pledged not to re-zone land from manufacturing to other uses (after having done just that to many areas of Brooklyn and Queens). The IBZs also included incentives for manufacturers and funding for organizations like Evergreen and the Greater Jamaica Development Corporation.
Mayor Bill de Blasio’s administration committed to a 10-point Industrial Action Plan in 2015, which included the creation of the Industrial Developer Fund to help more nonprofit industrial developers like Evergreen acquire more real estate to preserve it for affordable industrial use. Evergreen acquired the first of its four buildings back in 2008, but hasn’t acquired any new buildings for about five years — and not for lack of trying, Archibald says.
“Looking to make sure industrial assets have nonprofit stewardship with an underlying mission to support the manufacturing sector can be really pivotal to help hundreds and hundreds of manufacturing companies in cities,” Wellington says.
But the continued competition from hotels, self-storage and other non-manufacturing uses has hampered all the above. There’s only been one acquisition made so far with the support of the Industrial Developer Fund. Evergreen received approval to make an acquisition with the fund’s support in Fall 2018, but hasn’t yet found an available property at a price that makes sense, Archibald says.
“Yes we need funding for new types of industrial development, yes we’re providing funding for the industrial business service providers, but we also need to be very intentional about the zoning, because the zoning is really what’s going to be the foundation for everything else,” says Armando Moritz-Chapelliquen, senior economic development organizer at the Association for Neighborhood and Housing Development (ANHD), a citywide network of community development organizations.
Inspired by a realization that no housing is affordable without a living wage job, nonprofit community development corporations in NYC and around the country have started taking a larger interest in organizing to protect land zoned for manufacturing. ANHD published a three-year progress report on the city’s Industrial Action Plan, and organized public statements and testimony at city council hearings and rallies. After years of work, momentum is growing.
“What’s most exciting to me are the growing network of community development corporations that are stepping into this space, and in the process of becoming industrial developers and stewards of manufacturing space, they’re also becoming the new advocates for rational manufacturing zoning,” says Wellington. “Several years ago, community development corporations were not even jumping into the conversation. This is very new.”
According to Moritz-Chapelliquen, getting City Council to change the code regarding new hotels required “continuous follow-up with the administration, working with the department of city planning, following up with the City Council members, focusing on the impact of what’s happening in the IBZs, highlighting problems that have continuously been here.”
With the hotel special permit requirement now in place, Archibald feels a bit of relief, though she’s worried it’s too late for it to help her neighborhoods.
“I don’t know what the long-term impact of the special [hotel] permit is going to be in north Brooklyn because we already had so many hotels … ,” she says. “I think it will be more beneficial for the other industrial neighborhoods where there hasn’t been quite the level of incursion we’ve seen.”
The next battle lines are already being drawn around land zoned for manufacturing in New York.
“There were good, important steps forward, but in some ways they were the low-hanging fruit, the most obvious,” says Adam Friedman, executive director of the Pratt Center for Community Development, which focuses on equitable and sustainable economic development. “The next wave of changes are more complicated, having to do with office development and retail development and how to limit uses … . The work of building more balanced planning, more balanced land use, is ongoing.”
This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi.
Oscar is Next City's senior economics correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha, and Fast Company.