Study: How to Make Large Real Estate Projects Work

In a new study, Regional Plan Association draws on lessons from the past to recommend policies for redevelopment initiatives that encompass entire city neighborhoods. Over the next four decades, New York City might need as much as a billion square feet of new housing, office, retail and other space. This much new development will require creativity, careful planning and an approach that spurs economic prosperity while fostering a more livable urban environment.

To address these priorities, RPA is recommending a series of principles for future large development initiatives:

  • Establish policy goals and measurable benchmarks to maximize and balance economic, social equity and environmental benefits;
  • Clarify the maze of state, city and federal requirements early in the process;
  • Obtain public input at the beginning of the planning process to develop greater consensus;
  • Lead with public-realm improvements such as parks, streets and plazas to lay the groundwork for private development;
  • Connect real estate and transportation improvements;
  • Promote long-term revenue sharing among public land owners and private developers;
  • Implement district-wide sustainability practices such as green infrastructure and renewable energy;
  • Maintain continuing public oversight to guide development and maintenance.

"These projects are enormously complex and can take a generation or more to build," said Robert D. Yaro, president of Regional Plan Association. "This makes it essential to maintain both flexibility and a public stake throughout the life of the project." While many good projects succeed in spite of myriad impediments, many could be executed better or implemented faster and at a lower cost. To generate the most public benefit at the least cost, the study recommends several significant reforms:

  • Land use and environmental review procedures should be assessed and overlapping or excessive regulations should be modified. Protections that are too weak need to be strengthened.
  • An independent entity, such as New York City's Independent Budget Office, should monitor project costs and benefits over time to provide greater transparency.
  • Value recapture mechanisms such as tax-increment financing, in which the cost of new infrastructure is subsidized by anticipated higher real-estate tax revenue generated by the redevelopment project, and co-development of projects between public and private entities, should be promoted. For example, the construction of the Second Avenue Subway, combined with the city's initiative to examine the redevelopment potential in East Midtown, creates the opportunity for the MTA and private firms to jointly develop new station areas.

The recent generation of city-building initiatives, including Battery Park City, Atlantic Yards and Hudson Yardes, have benefited from a strong economy, new infrastructure investments and growth strategies implemented by the Bloomberg administration. The next generation of city-building could be more difficult. A proactive strategy of planning for infrastructure and development that identifies where and how new city-building projects are needed and how they are going to be paid for will help foster economic growth that also will make the city more livable, equitable and environmentally sustainable. The report was made possible through the generous support of the New York Community Trust and the Robert Sterling Clark Foundation.

Read the full report (PDF) Appendix (PDF) News release (PDF)