Memorandum

TO: Greater New York LECET

FROM: Albert K. Butzel, Albert K. Butzel Law Offices
RE: Zoning Powers re Requirement for Local Hire and Apprenticeship Utilization
DATE: February 16, 2016
Question Presented
The issue is whether providing zoning incentives in return for apprenticeship utilization
and targeted local hiring is permissible under New York Citys zoning and land use powers.
Short Answer
Yes, in the context of the Floor Area Affordability Bonus (FAAB) amendment
proposed by LECET to accompany the Citys Mandatory Inclusionary Housing (MIH) Text
Amendment. Moreover, if there were any doubt about the legitimacy of the FAAB amendment,
the concern that it might drag down the MIH legislation can readily be resolved by making it
clear that the FAAB provisions are severable from the MIH Text Amendment in the event either
or both are challenged in court.
Background
The Mayor, in an effort to spur the development of affordable housing, has developed a
Citywide text amendment to the Citys Zoning Resolution which makes mandatory the inclusion
of such housing in most future rezonings and upon the issuance of special permits. The proposal,
which is commonly referred to as Mandatory Inclusionary Housing or MIH, is well advanced in
the ULURP review process, with only City Council action required to make it effective.
Along with a number of other organizations, the Greater New York Laborers-Employers
Cooperation and Education Trust (LECET) believes that the Mayors MIH text amendments
will be woefully inadequate to address the Citys affordable housing crisis, because it will not
generate enough new housing stock at levels that are truly affordable. At the same time, as
drafted, the MIH amendments fail to incorporate programs that would contribute to the strength
and health of the communities where they are applied, including, in particular, apprenticeship
programs with safety criteria and job set asides for City residents (with a preference for
community residents).
To deal with these limitations in the Mayors proposal, LECET and its coalition partners
are asking the City Council to adopt as amendments to that proposal a series of further provisions
that would provide developers with incentives to go beyond the MIH in the construction of truly
affordable housing while training and employing local labor and ensuring the safety of workers.
In summary, these further amendments, which we refer to as Floor Area Affordability Bonus
provisions, or FAAB, would work as follows:
Step 1: The City approves two zoning text amendments at the same time: MIH and
FAAB.

MIH is triggered by each neighborhood up-zoning and requires, with exceptions, 25% of
the units to be affordable for residents averaging an income of 60% of AMI.

FAAB is triggered when a developer wants additional density in the MIH areas. The
bonus sets as a minimum 50% of units to be affordable for residents at the local
neighborhood AMI and additional job standards: 30% local hiring of NYC residents
(with a preference for local residents), apprenticeship requirements that create careertrack jobs, and associated safety standards.

Step 2: Each neighborhoods up-zoning creates a small increase in FAR as-of-right

(which triggers MIH), but ensures that this increase is well below the maximum FAR that is
acceptable to the community. Each neighborhood also sets the density available for FAAB.
Step 3: A developer in the up-zoned neighborhood may now build to the new zoning
density, and must meet the affordability threshold set in MIH (25% at an average 60% AMI).
Step 4: A developer may also choose to take the FAAB programs density bonus on top
of the density allowed through the up-zone, substantially increasing the size of the building, but
in exchange must create deeper levels of affordability (minimum 50/50), hire locally (30% NYC
residents, with a preference for community residents), create career-track jobs through
apprenticeship requirements and associated safety standards.
This memorandum is directed to the legal authority of the City to adopt the FAAB
program in the exercise of its zoning powers.
Discussion
In New York, cities only have such powers as are delegated to them by the State. This is
usually done through a so-called Enabling Act. With regard to New York Citys land use
authority, this delegation has been made through the New York General City Law and the New
York City Administrative Code. These two documents set forth the essential zoning powers of
the City, together with the bases of those powers and limitations on them. Among other things,
the City is empowered to regulate and limit the height, bulk and location of buildings hereafter
erected, to regulate and determine the area of yards, courts and other open spaces, and to regulate
the density of population in any given area. . . The regulations are to be designed to secure
safety from fire, flood and other dangers and to promote the public health and welfare. . . In
addition, the City is authorized to regulate and restrict the location of trades and industries and
the location of buildings, designed for specified uses, and for said purposes to divide
the City into districts . . . [with] such regulations . . . designed to promote the public health,
safety and general welfare and . . . with reasonable consideration, among other things, to the
character of the district, its peculiar suitability for particular uses, the conservation of property
values and the direction of building development, all in accord with a well-considered plan. See
N.Y. Gen. City Law 20 (24-25), N.Y.C. Administrative Code 25-110, 25-111.
There is no doubt that the State and State municipalities if authorized by the State have
the legal power to adopt legislation (including local ordinances) that establish labor standards,
including targeted hiring, job training obligations and safety requirements. The State Prevailing
Wage Law is but one example of this exercise of the police power. See N.Y. Labor Law,
220(3). The question in this case, then, is not whether the FAAB proposals fall within the power

of the State. The issue is rather whether the City is authorized to impose these requirements
under the zoning powers that have been delegated to it under the General City Law and the
N.Y.C Administrative Code.
Targeted local hiring and apprenticeship programs with upgraded safety standards may
be challenged on the ground that these tools are not expressly included in the language of those
Enabling Acts or the City Zoning Resolution. However, that is neither a requirement nor the
appropriate test. To the contrary, courts have found the power to adopt provisions not expressly
forbidden by the enabling authorization may . . . be implied where there exists independent
justification for provisions within the spirit of the enabling legislation. ABN 51st St. Partners v.
City of New York, 724 F. Supp. 1142, 1157 (S.D.N.Y. 1989) (citing FGL & L Property Corp. v.
City of Rye, 66 N.Y.2d 111, 115 (1985)). Put another way, even where there appears to be no
explicit basis in the statutory language for a particular action, if the action conforms to the spirit
of the legislation, it will be upheld. An example of this judicial approach can be found in the
Court of Appeals decision in People v. Stover, 12 N.Y.2d 462 (1963), in which the court upheld
a zoning boards denial of a variance on aesthetic grounds, even though the zoning enabling law
did not identify visual impact as a relevant consideration and it had been found to be an improper
consideration in a number of earlier New York cases. Similarly, the absence of specific
language addressing local hiring and apprenticeship in the Enabling Laws does not mean that
they cannot properly be addressed in this case.
No New York decision has taken up the precise issues involved with the FAAB local
hiring and apprenticeship proposals. But the case law in related areas makes it clear that these
proposals are within the authority of the City under the General City Law and the Administrative
Code. The language of these Enabling Laws reflects the early history of zoning, where, in what
is referred to as the Euclidian approach, a municipality established a series of zones to
regulate land use, with the essential goal being to protect residential areas from incompatible
commercial and industrial uses. Initially, the zoning schemes were fairly simple, but over time,
they became increasing complex, both in terms of what uses were allowed in particular zones,
but also in defining permitted bulk and density. The Citys pre-1961 zoning resolution is an
example of the very detailed requirements that governed land uses at the time.
As it turned out, even the complex zoning schemes developed based on the Euclidian
approach lacked the capacity to deal with some the most intractable problems associated with
urban land use, including the problems of slums, deteriorated housing stock and concentrations
of urban poverty. To respond to these concerns, the City began to think in terms of zoning that
would protect existing affordable housing and promote economic development that would lay
the basis for revitalizing the depressed communities. The result was Special District Zoning
that focused on and in effect imposed planned development on areas such as Clinton and
Chinatown. In each case, the rezoning was effected pursuant to the same Enabling Laws
containing exactly the same language that continue to apply today the General City Law and
the N.Y.C Administrative Code.
Not surprisingly, the use of Special District Zoning generated lawsuits challenging its
legality under the Enabling Laws, which had been adopted long before the Special District
concept had been imagined, much less adopted. Nonetheless, these zonings were upheld by the
courts.

The leading case is Asian Americans for Equality v. Koch, 72 N.Y.2d 121 (1988), which
involved a challenge to the Manhattan Bridge Special District Zoning. In upholding the
ordinance, the Court of Appeals addressed the distinctions between traditional zoning and
special district zoning noting that special district zoning is based on the idea that zoning can be
used as an incentive to further growth and development of a community rather than as a restraint.
In relevant part, the Court of Appeals stated (at 128-30):
Zoning, as first devised, was a means of dividing the whole territory of a
municipality into districts and imposing restrictions on the uses permitted in
them. Restrictions on size and density of construction to control fire and traffic
hazards, for example, or to eliminate offensive uses from residential districts
were deemed a reasonable exercise of the police power (see, Euclid v Ambler
Co., 272 US 365, 47 S Ct 114, 71 L Ed 303). Such traditional zoning is both
restrictive and passive, providing minimum encouragement for development of
the municipality as a whole.
Special district zoningexemplified by the Manhattan Bridge District questioned here represents a significant departure for the traditional Euclidian
zoning concept. It is based on the idea that zoning can be used as an incentive to
further growth and development of the community rather than as a restraint. It is
one of several imaginative legislative schemes intended to encourage, or even
coerce, private developers into making the City a more pleasant and efficient
place to live and work. Incentive zoning is based on the premise that certain
uneconomic uses and amenities will not be provided by private development
without economic incentive . . . .
New York City has used these special district incentive programs to develop
uneconomic but necessary uses since 1961 . . . . The districts created are not
traditional zoning districts, narrowly limited to particular uses, but broad-based
plans intended to preserve and enhance troubled areas of the City which,
because of their singular characteristics, are important to its wealth and vitality.
(emphasis added)
Without referencing any specific language of the Enabling Laws, the Court of Appeals
nonetheless upheld the Special District Zoning, finding it sufficient that the zoning promoted the
public safety and general welfare and was in accord with a well-considered plan. The fact
that the central purposes of the plan included economic development a goal nowhere identified
in the Enabling Laws in no way constituted a legal deficiency but, to the contrary, was not only
a legitimate public purpose, but a salutary one. See also, Kelo v New London, 545 U.S. 469,
480, 125 S. Ct 2655, 162 L. Ed. 2d 439 (2005)[economic development is a legitimate public
use]; Western NY Dist., Inc. v. Village of Lancaster, 17 Misc. 3d 798 (Sup. Ct, Erie Co. 2007)
[economic development is a legitimate land use concern in balancing rights of church to locate in
an industrial area].
The conclusion appropriately to be drawn for the Court of Appeals discussion of Special
Zoning Districts is that zoning in such instances encompasses forward planning designed to
solve the problems of the community as a whole and is not limited to the strictures of the
Euclidian approach. Furthermore, the use of incentives and disincentives to accomplish that

goal is a legitimate exercise of the zoning powers. In the end, the test of legality is that the
contemplated actions further the overall plan for renewing the neighborhood involved.
Litigation challenging the Clinton Special District provides an excellent example of the
breadth of regulations found to be legal under the existing Enabling Laws. The case in point is
ABN 51st St. Partners v. City of New York, 724 F. Supp. 1142 (S.D.N.Y. 1989). There, developers challenged the provisions of the Special District Zoning that prohibited tenant harassment
and provided that in any case where harassment was found, the involved property could only be
renovated or redeveloped if it included a set aside of 28 percent of the building for low income
residents. The court concluded that the protection of low income tenants from harassment and
displacement serve[d] a legitimate public purpose within the State's police power and that the
28 percent set aside was a permissible means of accomplishing these goals within the Citys
zoning powers.
In another relevant case, Lazore v. Board of Trustees of Village of Massena, 191 A.D.2d
764 (1993), the Appellate Division, Third Department, held that providing jobs to local
community members was a legitimate objective of zoning. This follows inevitably from the
holdings that economic development is a legitimate purpose, since one of the goals of economic
development is to create jobs. The additional condition that local community members be given
preference in hiring clearly is in furtherance of the goal of stabilizing the area affected by the
rezoning. See also 1 N.Y. Zoning Law & Prac. 6:01 (stabilizing the neighborhood and
protecting the housing stock for low income residents are legitimate zoning purposes).
The legality of the FAAB proposals for targeted hiring and apprenticeship programs with
associated safety requirements follow directly from the cases described above. As part of any
Special Zoning District created after the adoption of MIH or any other large-scale rezoning,
these requirements would be an integral part of the overall plan designed to revitalize or
otherwise improve the area subject to the zoning or rezoning. Among other things, the proposals
would ensure that a percentage of the people who live in the rezoned community can work where
they reside and that training opportunities with associated safety criteria would be available to
local and other City residents to prepare them to work on projects that follow from the rezoning.
Local hiring would also help preserve neighborhood character by, inter alia, allowing the
members of the community to work in the community in which they reside. It would also benefit
the health of City residents in general by reducing commuting time and mitigating congestion.
Each of these outcomes would serve to stabilize the affected communities from both a land use
and social perspective and thereby promote public safety and the general welfare. In short, the
adoption of the proposals in conjunction with MIH text amendment would clearly fall within the
purposes of the Zoning Enabling Laws, as interpreted by the Court of Appeals and in the other
cases cited above.
To the above points another must be added, which is absolutely critical. This is the fact
that the FAAB proposals would only apply if and when a developer elected to take advantage of
the density bonus that they would provide. The obligations to undertake targeted hiring and
provide apprenticeship training would, in short, be by voluntary choice. They would be a quid
pro quo for the developers decision to build bigger. Nor would the resulting burdens be out of
proportion. There might be some loss of efficiency in the work force, but given the limited
percentage of required local hiring, it could not be great; and in any case, the modest burdens
would be more than offset by the resulting community benefits.

Finally, concerns have been expressed that if the FAAB proposals are connected to the
MIH Text Amendment and if some or all of the FAAB provisions were found to be illegal, that
might result in the invalidation of the MIH Amendment. There is, however, a simple answer to
these concerns. This is to include in both proposals a clause stating that if any provision of either
is found to be invalid, that will have no effect on the remainder of the other or either of them.
This is known as a Severability Clause and is standard in most statutes and ordinances.

Other Precedents

New York City would not be the first city to address labor standards through a zoning
ordinance. For example, in Rubalcava v. Martinez, 158 Cal. App. 4th 563 (2007), the California
Court of Appeal upheld a Los Angeles Zoning ordinance that included Living Wage provisions.
In RUI One Corp. v. City of Berkeley, 371 F.3d 1137 (9th Cir. 2004), the U.S. Court of
Appeals upheld a Living Wage Ordinance that specifically covered employers in the Berkeley
Marina; however, it is not entirely clear whether this was part of a zoning enactment or a standalone Living Wage ordinance.
In other examples, the City of South San Francisco has created a density bonus option for
developers who agree to hire locally. See Ordinance No. 1498-2015, City Council, City of South
San Francisco, California, and Berkeley has created a Voluntary Green Pathway program that
provides a streamlined land use permitting process for those developers who agree to hiring
locally and paying a prevailing wage.