City of Yes
Status: Approved December 2024
Research Report Series
In December 2024, New York City Mayor Eric Adams and the City Council approved the City of Yes for Housing Opportunity, a sweeping citywide rezoning initiative aimed at addressing the city’s deepening housing crisis. This ambitious plan is expected to enable the creation of more than 82,000 new apartments over the next 15 years and includes a $5 billion investment in critical infrastructure and housing development. By expanding where and how housing can be built, the initiative seeks to make it easier to add new homes across all five boroughs.
This research report series will examine the major components of the City of Yes for Housing Opportunity. While exact housing outcomes will vary, each report will explore where the proposed changes are likely to be most impactful. The series will provide a data-driven analysis of how each aspect of the plan could influence housing production, real estate development potential, and pricing across different neighborhoods.
Universal Affordability Preference (UAP)
The City of Yes changed New York City’s longstanding zoning rules and introduced the Universal Affordability Preference (UAP), which applies citywide to zoning districts R6 through R10 and replaces the Voluntary Inclusionary Housing Program (VIH). While the city has introduced R11 and R12 zoning districts, any zoning lot would need to be rezoned to utilize them—triggering the Mandatory Inclusionary Housing (MIH) Program requirements.
Under the UAP program, developers can build up to the Standard FAR and rent the units entirely at the market rate. However, any additional residential FAR above must be rented to households averaging 60% of Area Median Income (AMI) or below, which will be permanently rent-stabilized.
If a development exceeds 10,000 square feet of UAP affordable housing, 20% of the UAP affordable units in the project must be rented at 40% of AMI, with the weighted average of all UAP units still at 60% of AMI. There can be at most three income tiers, with the highest income tier allowing 100% of AMI.
For affordable units created through UAP and/or the Mandatory Inclusionary Housing (MIH) program, the average unit sizes per bedroom type must not be less than whichever is less between the average for market-rate units in the same building and the minimum size specified below:
  • Studio: 400 SF
  • 1- Bedroom: 575 SF
  • 2-Bedroom: 775 SF
  • 3-Bedroom: 950 SF
Through this link, you can apply with HPD for a development site for either the UAP or MIH program.
Areas of NYC That Will Best Support UAP
Program’s Rents 60% of AMI: This chart compares HUD’s 2024 Small Area Fair Market Rents (SAFMR) for each New York City ZIP code to the city’s Area Median Income (AMI).
Neighborhoods with lower fair market rents are more likely to benefit from the UAP bonus, as 60% AMI rents are more closely aligned with prevailing market rates. In contrast, higher-income areas with higher rents may see less impact, as the gap between 60% AMI rents and market rates is much wider.
UAP and 485-x Tax Exemption
The City of Yes will likely spur activity when paired with the 485-x tax incentive program that was included in the 2025 New York State Budget. Each lot has a unique percentage of affordable housing required if built to the maximum UAP buildable square feet allowed depending on the zoning district and the size of the nearby streets. Wide streets are over 75' wide and narrow streets are below that threshold.
485-x Tax Exemption: The program requires that 20-25% of units be set aside as permanently rent-stabilized units. Any building with at least 100 units comes with prevailing wage requirements.
  • Projects between 6 - 99 units: 20% of units at 80% of AMI (35-year tax exemption with the last 10 years tax savings at 20%)
  • Projects with 100+ units: 25% of units at 80% of AMI (100% exemption for the full 35-year exemption)
  • Projects with 150+ units in Zone A or B: 25% of units at 60% of AMI
  • Zone A: Manhattan below 96th Street, Long Island City, Greenpoint, Williamsburg, South Williamsburg, East Williamsburg
  • Zone B: Astoria, Queensbridge, Brooklyn Heights, Downtown Brooklyn, DUMBO, Boerum Hill, Fort Greene, Clinton Hill, Carroll Gardens, Cobble Hill, Gowanus, Red Hook, Park Slope, Prospect Heights
This chart illustrates the maximum FAR bonus permitted under the UAP program, based on zoning district and adjacent street width. In some districts—such as R6 on a narrow street (< 75’ wide)—building to the full bonus FAR may be impractical, as it would require a large portion of the building to be rent-stabilized and leased to households earning at or below 60% of AMI. In contrast, districts like R6B may need to allocate a portion of the Standard FAR toward affordability to qualify for incentives like 485-x.
UAP and 485-x Examples:
Neighborhood: Crown Heights
Lot Size: 30,000
Zoning: R7-1
Standard FAR: 3.44
UAP FAR: 5.01
The site receives a 46% boost in FAR to 150,300 SF. If built to full UAP FAR, 31% of the building would be stabilized at 60% of AMI.
485-x Assumptions:
  • Less than 100 residential units: 20% affordable required - 129,000 SF
  • More than 100 residential units: 25% affordable required - 137,600 SF
Neighborhood: East Harlem
Lot Size: 13,624
Zoning: R7-2
Standard FAR: 4.00
UAP FAR: 5.01
The site receives a 25% boost in FAR to 68,256 SF. If built to full UAP FAR, approximately 20% of the building would be stabilized at 60% of AMI. If built below 100 units, this would as-of-right qualify for the 485-x Program.
Neighborhood: Mott Haven
Lot Size: 9,500
Zoning: R8A / M1-5 / MX-1
Standard FAR: 6.02
UAP FAR: 7.20
The site offers an as-of-right development potential of 57,190 square feet for a fully market-rate residential project. By utilizing the Universal Affordability Preference (UAP) bonus, the allowable Floor Area Ratio (FAR) increases by 20%, resulting in a total buildable area of 68,400 square feet.

Of this total, 13,680 square feet (20%) is allocated to affordable housing under the 485-x program. This includes 11,210 square feet qualifying as UAP units at a blended affordability level of 60% of Area Median Income (AMI), and an additional 2,470 square feet at the highest permissible income band under 485-x (100% of AMI). The weighted average AMI across the affordable component is 67%, which satisfies the 485-x program’s requirement of being at or below 80% of AMI.

Assuming a fully residential development, the remaining 54,720 square feet is available for market-rate units.
Mandatory Inclusionary Housing (MIH) Update
Under the City of Yes, the basic MIH threshold remains unchanged: development sites within MIH zones that are under 12,500 buildable square feet and fewer than 10 residential units are still exempt from MIH requirements.
For larger sites above this threshold, the City of Yes increases the allowable Floor Area Ratio (FAR) in many zoning districts to align with the new Universal Affordability Preference (UAP) FAR.
For example, an R9 zoning lot located in an MIH zone with MIH Option 1 now has a higher buildable capacity than before, as the FAR has increased from 8.00 to 9.02—matching the new UAP FAR for R9 districts. However, MIH affordability requirements still apply. In the case of MIH Option 1, at least 25% of residential units must still be affordable to households earning no more than 60% of Area Median Income (AMI).
UAP Program Pricing
The UAP Program bears a striking resemblance to Mandatory Inclusionary Housing (MIH), which mandates that approximately 20-25% of units be permanently rent-stabilized at 60% of AMI if built to the maximum FAR allowed with the UAP bonus.
Pricing under the UAP Program will vary significantly by tax lot, as factors such as zoning regulations and location will determine development requirements and potential. Additionally, the program’s interaction with the 485-x program, introduced in 2024, will influence outcomes. The 485-x program incorporates deeper affordability measures, permanent rent stabilization, and, for projects with 100 or more residential units, potential wage requirements. In certain areas, it may be more viable to develop condominiums or market-rate rental properties instead, depending on local market dynamics.
The charts below illustrate significant pricing discounts for MIH-restricted development sites compared to those without affordability requirements across each borough.
Special Purpose Zoning Districts?
Special purpose districts have unique regulations regarding the allowable floor area ratio (FAR) for new developments. With the recent passage of the City of Yes, it is essential to carefully review these rules, as many districts may qualify for the UAP bonus. Be sure to consult the specific FAR guidelines for each district.
Below are examples of modified FAR regulations associated with Special Purpose Zoning Districts:
1
  • Special Clinton District: For any zoning lot within the Preservation Area, the floor area ratio for a residential, commercial, or community facility building, or portions of a mixed building in R8, C1-5, C2-5, or C6-2 Districts:
  • Standard residences or community facility use (the maximum FAR pre-COY): 4.20
  • Universal Affordability Preference Bonus FAR: 5.04 (20% above Standard residences)
2
  • Special 125th St District: The following zoning districts have varying residential zoning equivalents in the Core Subdistrict. All have an as-of-right FAR of 6.00 and a UAP FAR of 7.20, lower than the typical buildable capacity in R9 and R10 districts. This special purpose district also offers additional bonuses for incorporating spaces dedicated to Visual or Performing Arts.
  • C4-4D (R8A Residential Equivalent)
  • C4-7 (R10 Residential Equivalent)
  • C6-3 (R9 Residential Equivalent)
Removal of Voluntary Inclusionary Housing Zones
As noted, the UAP provision in the City of Yes replaces the Voluntary Inclusionary Housing Program (VIH), which featured designated zones across New York City offering additional buildable square footage in exchange for allocating 20% of all residential units to households earning an average of 80% or less of AMI. Under VIH, if developers opted to construct entirely market-rate housing up to the base Floor Area Ratio (FAR), they would have faced a reduction in buildable size for their site. Under the City of Yes, the base FAR in these areas will now align with the Standard regulations for the respective zoning district.
Offsite Inclusionary Transfers: The transfer of development rights under the VIH program remains available in previous VIH zones, however, thanks to grandfathering provisions under UAP for the next 10 years.
  • Developers in R10 districts (and equivalents), VIH districts, or certain Special Purpose Districts can still purchase VIH rights at the same bonus ratios as before COY HO.
  • Generating sites with a New York City Department of Housing Preservation and Development (HPD) regulatory agreement in place by December 5, 2024, retain the right to sell VIH development rights.
  • Additionally, sites with pending New York City Department of Buildings (DOB) applications as of December 5, 2024, may sell VIH rights if:
  1. the DOB approves relevant permits within one year of adoption and
  1. HPD signs a regulatory agreement within two years of adoption.
This report is part of a series by Ariel Property Advisors that offers an in-depth analysis of the new initiatives introduced under the City of Yes. The series aims to explore these programs and their potential impacts on New York City's development market.
Click here to view a high-level summary of the notable programs within the City of Yes.
Click here to request a complimentary asset evaluation and learn how the City of Yes impacts your property or development site.
By: Adam Pollack, Head Analyst - Investment Sales, Ariel Property Advisors