Creative Zoning

Bonuses for builders, at a price

The first American zoning law was passed in New York City in 1916 to limit the size of new skyscrapers that were casting shadows on nearby streets. But now city fathers in several revenue-strapped cities are using zoning regulations as a money-saving way to improve the local urban landscape. City planners will permit developers to put up new buildings only on the condition that they also improve the area around the new structure, at their own expense.

The toughest new zoning requirements have been laid down in overcrowded San Francisco. Since 1981, the city has forced developers to pay for the construction or renovation of a certain amount of housing whenever they put up a major office building. The idea is to create new dwellings for the people who will work in the offices. Should the developer balk, he must contribute $6,000 to a housing bond program for each 1,000 sq. ft. of new construction.

Developers have so far paid $5 million into the bond program. A few describe the city's zoning laws as extortionate. Others have tried to make the rules work in their favor. While building a 24-story office tower in the San Francisco financial district Texas Real Estate Developer Trammell Crow satisfied the letter of the law by installing 33 posh condominiums on the upper floors and put them up for sale at $400,000 to $2.5 million each. Crow eventually got to keep his apartments, but other builders were warned against violating the spirit of the housing regulation by constructing luxury units.

Other cities are now evaluating the San Francisco model. Seattle is considering adopting a similar plan. Officials in Santa Monica, Calif., where a moratorium on new construction was imposed for six months in 1981, forced one builder with plans for a $150 million shoppmg-office-hotel complex to agree to a package of concessions. They include construction of 100 low-cost housing units, a child-care center and a 3 1/2-acre park, plus a $2.25 million contribution over 20 years to a city cultural fund.

Montgomery County, Md., offers bonuses to developers for providing certain public facilities. If they build pedestrian walkways or include an entrance to Washington, D.C.'s subway system as part of their buildings, they are permitted to increase floor space or add extra stories to new structures. The county has also set up a novel way to protect farmland from suburbanization. Farmers can sell "rural development rights" for their property to builders, who can then use those rights in such urban areas as Bethesda and Silver Spring. The farmer gets paid, his land is protected from builders, since the development rights have already been sold, and the construction firm gets to build more rentable space in another part of the county. A similar scheme is being used in Dade County, Fla., to halt construction in the eastern Everglades, and rights from the Everglades can be transferred to communities like Key Biscayne, where development causes less environmental damage.

In New York City, developers commonly add plazas at the ground level of office towers in return for permission to erect taller skyscrapers. IBM was granted the right to build five extra floors for creating a tree-filled atrium at the foot of its Madison Avenue building. But now the whole zoning program is running into serious problems. Citizen groups complain that some plazas are so poorly designed and maintained that they discourage public use. At the Harley Hotel, which is co-owned by Multimillionaire Harry Helmsley iron spikes were installed in seating areas, which kept people out of the public space. After a protest last month, the spikes were removed. Builders of an office tower on the fashionable East Side were given permission to construct additional floors on the condition that they improve the nearby subway station and put in a small shopping area. The extra floors went on the building, but the local improvements have not all been made. The New York City Planning Commission has now taken the developers to court in an effort to force them to keep their end of the deal. But despite those complaints and problems, New York and other hard-pressed cities are likely to continue using innovative zoning as an inexpensive way to spruce up the neighborhood. This file is automatically generated by a robot program, so viewer discretion is required.