Where Does New Construction Happen?: Examining the Relationships between New Development and Land Use Regulations, Physical Site Constraints, and Ownership in New York City
By Matthew Pietrus
Cities continually remake themselves through addition and subtraction. As buildings are torn down and new ones constructed, landlords, real estate developers, and public institutions are constantly changing the cityscape to achieve public and private land use goals. Economic, physical, and policy forces dictate what gets built and what varies block to block, and understanding these forces is fundamental to both the policymakers that regulate land use and the private parties impacted by those regulations. In an attempt to understand these forces, this paper employs a linear probability model to predict the likelihood that a parcel, or lot of land in New York City, will develop based on various characteristics.
The variables used to predict development were informed by conversations with New York City real estate developers and urban planners, existing literature, and practical experience. They are largely related to those that impact land use regulations and construction cost and feasibility. Specifically, I analyze the relationship between whether or not a lot has developed—defined as having received a new building or demolition permit or merged tax lots—and physical characteristics, locational characteristics, land use regulations, and public vs. private ownership. I develop a model that relates developed lots to these variables, separately for each of New York City’s five boroughs: the Bronx, Brooklyn, Manhattan, Queens, and Staten Island.
Successful land use policies create the conditions under which private landowners can effectuate a municipality’s goals. These goals span from pro-development policies, which seek to encourage new construction, such as incentivizing affordable housing via zoning bonuses, and preservationist policies, which seek to limit, or moderate new construction in order to preserve neighborhood character. Depending on the neighborhood, demographic and economic shifts, political will, and countless other factors, most urban policy strikes a balance somewhere between these two ends of the spectrum. In New York, regardless of the intent of a land use regulation, private landowners are largely responsible for effectuating those policy goals because most of the land in the city is privately held.
In 2020, about two-thirds of New York City’s 248 square miles of real property (which does not include most roads and waterways) was privately held. The 82 square miles of publicly owned property is mostly comprised of already constructed public parks, essential infrastructure, or existing public housing. Thus, the government’s opportunities to construct new housing or spur economic growth through the creation of new office or industrial space is limited. Because of this, the City relies on private real estate development to provide most housing, jobs, and services to its residents. This means that where the City would like to see new construction, land use regulations cannot be so restrictive that they render new development infeasible to private owners. Thus, understanding the factors that associated with development of certain sites and not others is paramount to urban planning and real estate development.
With nearly a decade’s experience in land use planning, real estate development, and data analytics, Matthew Pietrus has worked to make cities more inclusive and livable in Chicago, Kampala, Newark, and New York. He has worked at the Chicago Transit Authority, Northwestern University, at the largest Business Improvement District in Newark, and currently works at the NYC Department of City Planning, focusing on development trends, zoning regulations, and land use planning. Matthew graduated from the NYU Wagner Graduate School of Public Service with a Master of Urban Planning in 2021, where he also tutored a graduate course in multiple regression and econometrics.