loft law extension / what's the big deal? UPDATED w maps

Of course I have been following the reports over the last week about the "extension" bill just passed (and to-be-immediately-amended) New York State Loft Law. But it has been very difficult to understand what is has really been at stake here.

Short story: it seems to have little to do with Manhattan (with one important caveat) and is a big deal in Brooklyn and Queens, and among fans of industry. As always with our dysfunctional state government, there are some fascinating sidelights about politics and (bad) process.

Not a lot of factual detail in the news reports. Crain’s had a fairly comprehensive factual treatment, posted on-line on Tuesday afternoon. If there has been a ‘real’ article in the NY Times about the law, I missed it; the City Blog ran a short Christine Haughney entry on Tuesday about the bill signing Monday night. The best treatment I’ve seen is from a blogger in Bushwick, Brooklyn, (here, here, and here); indeed, that blog has been covering this story for a while.

I tracked down a copy of the bill in the form in which I think it was passed, here.

From a big picture perspective, the big change for Manhattan lofts already covered by the 1982 Loft Law is that the law is now permanent, instead of having to have been periodically renewed. For Queens and (especially) Brooklyn, the big change is a change in the geography covered by the Loft Law.

The law applies to buildings, not tenants (I will explain), requires landlords in those buildings to bring the residential space in the buildings up to code (eventually) and would give residential tenants in those buildings rent stabilization guidelines rights. Much as the original Loft Law in 1982 changed the legal framework within which to look at already existing residential use in areas that are formally (and were formerly) industrial, the extension of the loft law recognizes new realities on the ground.

The law applies to buildings in which at least two families living for at least 12 consecutive months in the 24 months of 2008 and 2009 (reports say that "two" will be amended to "three" families as the trigger for coverage). [UPDATE:  a private comment confirms that the amendment to re-set the ‘trigger’ from 2 to 3 families is in a bill to be voted on by the Assembly on June 28; thx Reader Maria]

Owners of buildings with qualifying tenants (all of whom, presumably, know that they have been illegally been renting to households, presumably because they can get higher rents) must apply for an "alteration permit" (to bring the building up to residential Building Code standards, it appears) within 9 months and achieve compliance within 18 months after obtaining that permit, and take steps to get a residential Certificate of Occupancy within 3 years of bill being law (subject to applying for two one-year waivers).

I don’t see it, but somewhere in all the cross-referencing sections must be the provision that loft tenants subject to the amended law will be subject to (protected by) rent stabilization.

I don’t see it, but somewhere in all the cross-referencing sections must be a provision that expands the geographic scope of the Loft Law from the few original Manhattan neighborhoods. Nothing I have read is explicit about this, but I gather that the new law applies city-wide except for some areas to be carved out of the law because they are Industrial Business Zones.  Apparently, The Fight has been about those IBZs.

geography, the Ins and Outs
That’s what i infer from a letter that Mayor Bloomberg wrote in opposition to the law this past Monday, quoted in The Observer:

The bill would, in effect, prioritize residential occupancy over industrial use wherever they conflict, sending a clear and discouraging message to current and would-be industrial tenants anywhere in the city.  It would prevent the City from taking measures to preserve even small islands of industrial businesses, including the city’s sixteen Industrial Business Zones, which in the aggregate represent a small geographic portion of the city, but which this legislation treats no differently than the rest of the city, including its most residential neighborhoods.

While the original 1982 Loft Law was explicitly limited in geographic scope, the new law seems to default for coverage unless an area is specifically excluded. Two local members of Congress and two City Council Members made a similar argument to the Mayor in their letter to the Governor (h/t to The Observer for the link):

While there are numerous buildings previously occupied by manufacturing uses where long-term tenants should be provided with tenant protections and a path to legalization, this legislation is over-broad and undermines important protections set out in State and City law. The original loft law was much more limited in scope in regard to which buildings it covered. We encourage you to support instead a more limited version of this bill that would still protect loft tenants without undermining important City and State job retention policies.

These elected officials go on to argue that the bill rewards cheating landlords, who flouted the law (and public safety) by permitting families to live in buildings that did not meet Building Code standards for residential use and who reaped the financial rewards that higher residential leases permitted.

This legislation would give a large windfall to building owners who knowingly rented out space to residential tenants in violation of the City’s zoning laws. We call your attention to a 2004 report, “Illegal Residential Conversions in the East Williamsburg In-Place Industrial Park,” by the New York Industrial Retention Network, which describes how almost two dozen landlords converted a half-million square feet of industrial space to residential use without ever applying for a legal building permit.

I gather from comments on various articles and blogs that the cited report is somewhat controversial, but the competing perspectives are easy to understand.

fighting in the IBZ
As passed by the State Assembly and Senate, the loft law extension is city-wide, as I noted. Between passage and the deadline for the Governor to sign or veto the law (at midnight this past Monday), the backroom politicking has concerned the 16 IBZs, with tenant groups (and the bill sponsors) hoping for no exclusions (the full bill, as passed) and the Mayor (and others, as noted) arguing that the Governor should veto the bill unless it excluded all 16 IBZs. As noted in that Crain’s article, at the end of the day (rather, at midnight on Monday) the deal is that 13 of 16 IBZs will be excluded form the bill, but that three large IBZs will be subject to the Loft Law.

big exclusions
I haven’t yet found a map of the IBZs, but w[UPDATE: map links below] When everybody hunkered down the fight focused on five IBZs. Tenant interests were able to keep three large IBZs in the law (GreenpointWilliamsburg, North Brooklyn and Maspeth, Queens) while Bloomberg and allies got an agreement to keep two other controversial IBZs out of the law (southwest Brooklyn, including Red Hook and Sunset Park, and Long Island City).

[UPDATE:  I did find maps of the IBZs, right where I should have looked from the start: You will have to do some clicking to get each map, but they are very detailed, here. To Reader Maria: please call or email me about your research]

that handwriting on the wall? creeping loft-ism
If there are official estimates for how many buildings will soon be subject to the new-and-expanded Loft Law, I have not seen them. (This unattributed "fact" is reported in the Bushwick blog on Tuesday:  "The law will now cover tenants in about 3600 more units in around 300 buildings who can prove their tenancy for 12 months or more in 2008 and 2009.")

Formally, the law applies only to buildings that already meet this criteria:  buildings in which at least two families have been living for at least 12 consecutive months in the 24 months of 2008 and 2009 (reports say that "two" will be amended to "three" families as the trigger for coverage). Only those buildings, and only if they are outside of the surviving 13 IBZs.

But I gather that everyone assumes that, over time, these grandfathered and legal residences will inevitably spawn nearby illegal residential use, which will come to dominate some of these neighborhoods, as happened in Soho and Tribeca. When (if?) that happens, the facts on the ground will inevitably require the landlords to upgrade and/or the City to legalize additional buildings for residential use.

It is easy to caricature the arguments of the two sides to this dispute, and I have seen commentary that disparages comments such as this one from a Williamsburg-based food company, quoted in Crains:

the tenants often complain about the businesses’ truck deliveries being too noisy, or park their cars in spots that delay the deliveries….

For example, here is one guy commenting on that Bushwick blog (my bold on the Extra Silly):

The only actual argument that I have heard – and I am not joking – was that residential tenants have “yelled” at and complained to companies that let their trucks run in the street while parked and that operate noisy equipment at night, such as big fans etc. Perhaps the whole issue can be resolved by passing a law that outlaws yelling at industries inside the IBZs. The no-yelling zones should be strictly enforced!

There is a very interesting argument to be made here, and probably one that should be made on a very micro level. (More on that in a bit.) But as someone who lived in Tribeca beginning in 1980 and later on a very non-residential block on West 26 Street for 13 years, attitudes will change over time if these neighborhoods become more and more residential. First, the pioneers will be joined by newer residents, residents who may not appreciate as much grit as the pioneers. Second, the lifestyles of the pioneers may change, and they may be more concerned with noise, smells and dust after they buy a stroller (or a walker!).

Undeniably, this did happen in Tribeca. I can’t help but think of the butter-and-egg guy I quoted in my March 12 retrospective post, Quote For The Day, 2000 edition, which referenced an old NY Times article:

another terrific quote in the same article from July 30, 2000, which highlights the impact of demographic changes on the mix of activities in Tribeca very well. 

Steven Wils also noticed the growing number of children in the neighborhood, but it made him anxious. He operated Harry Wils & Company on Duane Street, across from the park, with 18 trucks coming and going around the clock, laden with butter, eggs, cheese, olives, chocolate, spices and oils.

”If there were 50 kids, now there were 150,” Mr. Wils said. ”It just wasn’t safe anymore.” Happily accustomed to living over the store, Mr. Wils reluctantly moved the business to Secaucus, N.J., in 1998.

I remember trucks like those, which used to sit at loading docks almost blocking Duane Street just east of Greenwich. Even with Duane Street being very wide there, it took a lot of maneuvering to get those trailers to back on to those loading docks. Especially in the days before beepbeeping to warn of trucks in reverse, a distracted pedestrian (with or without toddler or stroller) would be at risk.

That Williamsburg food company won’t have any additional problems, as there should not be additional residents moving in nearby (assuming they are in the GreenpointWiliamsburg IBZ, which survived). But there’s some handwriting on that wall over there ….

making sausage in Albany
This legislative "process" provides a fascinating look into how Albany "works". This bill has been introduced every year for many years, and has passed the Assembly (only) each year of the last six. I am not sure this is a sign of serious consideration or not, but the last time there were public hearings over this bill was in 2001, according to Crains.

When the original Loft Law was passed in 1982, there was detailed analysis of the impact of the law on industrial use in Soho and Tribeca. Since the last public hearings in 2001, I suspect that neighborhoods likeBushwick , Red Hook, Long Island City,Willamsburg have changed a great deal, with some areas continuing to be more or less viable for industrial use, and some less so.

The State Senate had always killed the bill. Until this year, when they didn’t. The business groups say they only had about five days’ notice that the Senate would pass the bill, again per Crains.

The City and State went through some kind of analysis when the 16 IBZs were created (details unknown to me), but the fight about the geographic scope for the extended bill came down to a week of arm-twisting and bluffing between the Mayor (and allies) and tenant groups, with the Governor in the middle, about those 16 IBZs.

With a midnight deadline for the Governor’s signature or veto, it didn’t quite make it to a middle of the night deal. But the horses somehow got traded, and everyone "agreed" that 13 IBZs would be excluded. So the Governor signed the bill.

Apparently there is a firm guarantee that the Legislature will pass "chapter amendments" excluding those 13 IBZs. (And, I have read but can’t source that thethreshhold will be raised from buildings with two families with 12-month tenancies in 2008-2009 to three families.) I guess everybody trusts everybody else on those two things.

pace of Bushwick gentrification
In the course of looking for the text of the bill I checked out the website of Assembly Member Vito Lopez, who represents Bushwick and has been the long-time sponsor for this bill. He brags that tenant groups have been seeking this extension for more than 20 years and that he has been fighting ("tirelessly"!) for more than ten years. I gather that Bushwick is not in one of the protected (surviving) IBZs . The pace of change there should pick up.

I hope we can all just get along.

© Sandy Mattingly 2010

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