Can policy change revitalize Manhattan’s Midtown East?

We partnered with Cornell University to investigate the development of a new set of urban policy recommendations for the “up-zoning” of Manhattan’s Midtown East neighborhood. Our goal is to encourage building renovation and neighborhood redevelopment in an area of Manhattan that is currently undervalued despite robust existing, and upcoming, transit connections.

This research builds upon a prior proposal to change zoning laws in Midtown East put forward by the Bloomberg administration in 2013, which is being reconsidered by the current administration. Our ideas also build on prior Gensler research and design exploration around “Hackable Buildings,” which focused on the potential to transform existing buildings to meet new uses and tenant expectations via creative design intervention.

Midtown East has the potential to be a model central business district. Despite the multiple problems that the area has today—an antiquated office building stock with an average age of 70 years and 78 percent of buildings 50 years old or more, alongside pedestrian network challenges, overcrowded transit, a lack of open space, and a dearth of capital investment for renovations and upgrades—its future can be bright if the right actions are taken.

Its proximity to Grand Central Terminal, a major local and regional transportation hub and architectural landmark, makes the area particularly ripe for development. The in-progress “East Side Access” project, which promises easier commuting from Long Island and Queens via Grand Central, and the eventual addition of a new Second Avenue Subway both represent significant opportunities for the area. And proximity to major development projects focused on the technology and biotech industries— from Cornell Tech on Roosevelt Island to the NYU Alexandria Center for Life Science—makes the area poised for future interest from similar tenants.

A key challenge for the area is that the existing buildings are largely old, but not the type of historic or loft buildings currently drawing premium rents from tenants in the creative and technology industries. These buildings are often challenged by low slabto- slab heights, tight column spacing, and small windows—all traits typical to their age, and a roadblock to traditional renovation schemes focused on the more open, flexible workplaces prevalent today

Despite the challenges of Midtown East’s existing building stock, it is not financially feasible to demolish and rebuild every building in Midtown East. Instead, we must find new ways to incentivize the revitalization of the existing buildings in this area to achieve transformational change in a manner that is more economically and environmentally sustainable. Often development is spurred by the use and transfer of unused Floor Area Ratio (FAR)— building area or “air rights” allowed by code but not used by an existing building—to adjacent buildings.

The district’s current zoning laws are too restrictive for this to happen at the scale and pace necessary. A prevalence of smaller buildings makes the assembly and redevelopment of large parcels extremely challenging, which in turn makes the opportunities for large-scale redevelopment projects, to which current zoning and development policies and practices are tailored, few and far between. At the building scale, redevelopment often requires dramatic intervention that can reduce usable space—for example, removing floors or adding atria to increase ceiling heights or natural light—which can mean lost revenue and even greater unused FAR.

The result is a significant amount of development opportunity within Midtown East in the form of this unused FAR. We propose a modified zoning and FAR transfer strategy for Midtown East, which would provide excellent opportunities for companies that need creative space with easy access to transportation and amenities. This would also enable building owners to renovate parts of existing floor plates to create more open spaces, implement smart and playful design to existing buildings, and increase program/usage diversity through strategic programming.

Allow building owners and developers to transfer FAR to nonadjacent properties within their portfolio. The ability to transfer recovered or unused FAR to nonadjacent properties has precedence in NYC policies that designate “special districts” to free development opportunities, often while preserving historic landmarks. This strategy is currently in place for the Grand Central Subdistrict, and is also in use at Hudson Yards.

Create a FAR marketplace through which air rights can be aggregated, bought, and sold. This would expand incentives at the level of individual buildings; unused air rights and/or FAR “recovered” through building renovation or repositioning could be sold in an open marketplace. The city would also directly benefit through taxation of transactions.

Provide incentives to developers willing to renovate existing buildings and the public realm. Creating policies that prioritize building renovation not only is more sustainable and more feasible at a district level, but also offers opportunities to incentivize public realm improvements. Tax incentives or bonus FAR in exchange for infrastructure and public realm improvements should be pursued.

Now is the time to create policies and incentives that will help Midtown East evolve into a vibrant district reflective of the significant location and transportation benefits that it already holds. We hope to use this research to open discussions with the city’s policy makers, building owners, and developers to make that happen.