NYC Residential Property Development Checklist

by | Jan 27, 2020 | Multifamily Residential, New York City, Property Development

  1. Property Survey
  2. Environmental Site Assessment
  3. Easements
  4. Deed Restrictions
  5. Previous Air Rights Deals
  6. Grandfathered Conditions
  7. Landmark
  8. Violations
  9. Underlying Zoning District
  10. Commercial Overlay
  11. Special Zoning District
  12. Small Zoning Lots
  13. Year of Apportionment
  14. Sliver Law
  15. Contextual District
  16. Inclusionary Housing
  17. Proposed Rezoning
  18. Flood Zone
  19. Environmental Designations
  20. Comps
  21. Proforma

 

Land Survey

Property development will always require a Land Survey. The Survey is a drawing of the property indicating various essential pieces of information. Here is a list of some of the details included on a Land Survey.

  • Metes and Bounds
  • Topograghy
  • Orientation
  • Existing Structures
  • Natural Elements
  • Structures on adjacent properties
  • Sidewalks, Curbs, & Curb Cuts
  • Utilities
  • Distance to corner
  • Street Width

These are a few examples of what could be provided on a Land survey. For a new property development you want to get a complete “Architectural Survey” with topography or spot elevations. If there is an existing building you will also want at least one spot elevation per floor including the roof. The Land Survey is not done by an architect it is done by a Land Surveyor.

 

Environmental Assessment

Before developing a property you should perform an Environmental Site Assessment (ESA) which is often referred to as Phase I & Phase II. There are actually 3 potential phases to the ESA,

Phase I

The goal of Phase 1 is to determine the general likelihood of contamination. Phase 1 includes the following:

  • Records Research
  • Visual Inspection of Site and Adjacent Properties
  • Interviews
    • Owners, Neighbors & Government Agencies

Phase II

The goal of Phase 2 is to test and determine if there is contamination. Phase 2 includes the following:

  • Testing of Subsurface soil and water samples from the site
  • Soil Boring
  • Groundwater assessment
  • Sampling of drainage components or underground compartments
  • Testing interior spaces of existing buildings

Phase III

Phase III is only required if contaminants have been identified in Phase II. Phase III is the development of a Remediation Plan.

Environmental issues will have a great affect on the property development. It is advised to do the Environmental Assessment early on in the process to avoid surprises.

 

Easements

It is important to know if a property has easements. A full title search should be performed before purchasing any property. This is often done by a title company. Always work with reputable companies to ensure that you are getting accurate information. Easements are an individual’s rights to another person’s property. When you purchase land,m you will inherit any easements on the property unless they are contractually set to expire. There are many types of easements including parking easements, driveway access easements, light and air easements to name a few. Understanding the easements is critical for planning a property development but also for your due diligence before even purchasing a property.

 

Deed Restriction or Covenants

Deed restrictions are just what they sound like, a restriction on a deed. I’ll give you an example. Someone asked me to look into a property he wanted to purchase to develop a multi family building in Riverdale. There was a problem with the development because the property had a Deed Restriction. It said the owner could not develop a multifamily building on the property. He never went through with the purchase. There are all different types of Deed Restrictions and Covenents.

 

Previous Air Rights Deals

Air rights is an informal term used to refer to a property’s Development Rights. New York City Zoning prescribes a Floor Area Ratio to every property. This formula will determine the maximum square footage allowed to be built on the property. These are your development rights. In many cases it is possible to buy and sell these rights to neighboring properties. One must be certain of any such previous air rights sales before purchasing a property.

We have other blog posts if you want to learn more about:

 

Grandfathered Conditions

If there is any aspect of the property that is not in compliance with current Zoning or Building Codes, you will want to determine if these are legally “Grandfathered” conditions. There are many examples but this will be more critical for properties with buildings on them, especially older buildings. If you are proposing an enlargement of a building or perhaps a tear down of an existing building, you want to know if there is any advantage to an existing grandfathered condition.

We have another blog post you can see to learn more about the Grandfathered In Definition.

 

Landmark

There are many Landmarked buildings and Landmark districts in New York. The Landmarks Preservation Commission (LPC) has strict regulations on any work to be performed on Landmark Buildings or within Landmark Districts.

 

Violations

You will definitely want to check for violations on a property. You will inherit the violations and will be held responsible for correcting them. If you are going to tear down a building with violations then the demolition will rectify the problem.  I have had clients who purchased properties with many violations (because they get them at a good price). In some cases existing violation penalties might potentially be waived for a new owner, but the violation must still be rectified. Not all violation types will qualify for waiver of penalties.

We have another post you can see about Violation Penalty Waiver for Bona Fide Purchaser.

 

Underlying Zoning District

As an architect when I look at a property for a client who is planning a development the first thing I check is what Zoning District the property is in. New York City is broken into many zoning districts and subdistricts, which all have their own set of regulations. New York City Zoning is complicated.

We have another blog post that goes into more detail on what is involved in an Architectural Zoning Analysis.

 

Commercial Overlay

Residential properties can have a commercial overlay. These are areas within residential zoning that allow for commercial use. In a residential zone with a commercial overlay you can develop commercial, residential, or mixed use buildings.

 

Special Zoning District

New York City has dozens of Special Zoning Districts. These are known as Special Purpose Districts and they are found all over NYC. The underlying zoning district still qualifies in the Special District but there are additional rules. some of the Underlying district rules will be superseded and some will still apply. Special Purpose Districts can be very complicated, especially when figuring out applicability.

 

Small Zoning Lot

The term Small Zoning Lot is a technical term in the Zoning Resolution. It is based on the width of the property and the total square footage. If a lot qualifies as a small zoning lot there will be restrictions on developing the lot. In some cases the property may not be developable but in many cases it can be developed but restricted to 1 or 2 families.

 

Year of Apportionment

The year property was created is very important for New York City Zoning. I am not referring to the year the building was developed but when the lot was subdivided. Many lots do not comply with current zoning requirements so the year the lot was created is a critical issue. The zoning resolution has many stipulations for lots created before the current codes.

 

Sliver Law

Sliver Law is an incredibly important code to understand before developing a building in NYC. The Sliver Law is a height restriction for narrow buildings under 45 feet wide. This can be a serious problem for developing a building. It does not apply to all zoning districts but all properties should be evaluated for Sliver Law.

 

Contextual District

New York city has many contextual districts. These districts have specific sets of rules for building bulk. The goal of contextual districts is to maintain the character of a neighborhood with regards to building bulk. Bulk is the shape and size of a building.

 

Inclusionary Housing

The Inclusionary Housing Program is a program to promote mixed income developments with a portion of income restricted units. New York City has some area where there is Mandatory Inclusionary Housing, Designated Areas, and R10.

Mandatory Inclusionary Housing

A residential development within a Mandatory Inclusionary Housing area must provide a percentage of affordable units based on the applicable regulations.

Inclusionary Designated Areas

Designated Areas for Inclusionary Housing are areas where providing affordable units is optional. There is a floor area bonus for providing income restricted units but also a penalty for not providing them.

R10 Zoning

In NYC Inclusionary Housing is allowed in R10 Zoning districts but is not required. Properties within an R10 Zoning District have the option to provide income restricted units in exchange for a floor area bonus.

 

Proposed Rezoning

Zoning changes from time to time. Areas are rezoned and it is important to know if there are any proposed zoning changes before you plan a property development in NYC.

 

Flood Zone

Flood Zones require specific design standards and mitigation elements that otherwise would not be required in a building.

 

Environmental Designations

Some lots have an E Designation or Environemental Designation. You can look this up on the NYC Zoning and Land Use site Zola. These sites have designations for contamination, air emissions, or noise levels.

 

Comps

When developing a residential property the property developer must perform comps. Comps means looking at the market and comparing other rental or sale properties to determine a likely outcome for the potential income the property will generate.

 

Proforma

The Proforma is the culmination of all the data produced and the projection of financial cost and return on a property development.

 

We have another post on New Building Architectural Design services, if you want to read more.

 

NYC Residential Property Development Checklist

As an architect, I study the process of design and development, but these are complicated and quite involved issues. In this article, we reviewed some issues I would put on a development checklist but there are many others to consider. Every property is unique and must be assessed on its own unique characteristics. This post does not assume to cover every possible issue or condition, but provide a general overview of the topic.

 


Thank you for reading our blog post on Residential Property Development Checklist.

I hope this was helpful. Please leave questions and comments below. If you would like to speak with an architect, you can contact us directly.

 

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Jorge Fontan
Jorge Fontan

This post was written by Jorge Fontan AIA a Registered Architect and owner of New York City architecture firm Fontan Architecture. Jorge Fontan has earned 3 degrees in the study of architecture including two degrees from the City University of New York and a Masters Degree in Advanced Architectural Design from Columbia University. Jorge has a background in construction and has been practicing architecture for 15 years where he has designed renovations and new developments of various building types.