Committee Reports

The Role of Community Benefit Agreements in New York City’s Land Use Process

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REPORT

THE ROLE OF COMMUNITY BENEFIT AGREEMENTS IN NEW YORK CITY’S LAND USE PROCESS*

March 8, 2010

Introduction

A community benefits agreement (CBA) results from negotiations between a developer proposing a particular land use and a coalition of community organizations that claims to represent the individuals and groups affected by the proposed development.[1] In a typical CBA, community members agree to support the developer’s proposed project, or at least promise not to oppose the project or to invoke procedural devices or legal challenges that might delay or derail the project. In return, the developer agrees to provide to the community such benefits as assurances of local jobs, affordable housing and environmental improvements.[2]

CBAs are a relatively recent phenomenon across the United States, although they grow out of a long history of negotiations among developers, land use authorities and public officials, and the affected community and various stakeholder groups (such as environmental groups or organized labor) over development proposals that require governmental approval.[3] The first major CBA, the Los Angeles Staples agreement, was signed in 2001. Since then, scores of CBAs have been negotiated across the country.[4] In New York City, developers and community groups began to use CBAs in the last few years. Because most CBAs are relatively new, there is scant evidence, either empirical or anecdotal, to evaluate whether CBAs are a net benefit to the parties who enter into these agreements. Similarly, little is known about the impact CBAs have on those individuals or community groups that are in the neighborhood of the development, but were not parties to the agreements. Nor is it yet clear what effect CBAs will have on the land use process or the City’s development climate more generally.

Given the rising popularity of CBAs, and the growing controversy over their use, however, it is important to evaluate the benefits and drawbacks of these agreements in light of both the experience of parties who have entered into CBAs and more theoretical concerns about the impact that CBAs may have on the processes of land use regulation and real estate development. Those theoretical concerns are grounded in a long history of efforts by communities, developers, and local governments to find flexible ways to address neighbors’ concerns about development proposals. Conditional rezonings, development agreements, negotiated exactions, conditional negative declarations in environmental impact review, and compensated siting agreements between industries needing to develop locally undesirable land uses (LULUs) and host communities have been used for decades.[5] The debates about, and experiences under, such progenitors of CBAs offer important insights into the possible advantages and disadvantages of CBAs.

Part I of this report summarizes the structure, history, and political and legal context of CBAs. Part II briefly reviews the history of New York City’s debates over deal-making in land use controversies over the past few decades. Part III evaluates the benefits and drawbacks various stakeholders perceive CBAs to offer or threaten. Part IV surveys some of the thorny legal and policy questions presented by CBAs. Part V concludes with recommendations to the City.

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Footnotes

* The Association of the Bar of the City of New York’s Land Use Committee established a Subcommittee to review and write a report with respect to Community Benefits Agreements in New York City. The Subcommittee responsible for drafting this report consisted of Vicki Been, Boxer Family Professor of Law, NYU School of Law; Mark A. Levine; Ross Moskowitz; Wesley O’Brien; and Ethel Sheffer AICP. All members of the subcommittee participated in their individual capacities; their affiliations are listed only for identification purposes and none purported to participate in the deliberations as representatives of their institutions. Laura Wolf Powers served on the subcommittee early in its deliberations, but moved from the City and was not able to participate in final discussions. Professor Been would like to thank Matthew Jacobs, NYU ’10, Michael Nadler, NYU ’11 and Carolyn Nagy NYU ’10 for their superb research assistance in the preparation of the report, and Bethany O’Neill for her tireless administrative support through many drafts.

[1] Julian Gross, with Greg LeRoy and Madeline Janis-Aparicio, GOOD JOBS FIRST, COMMUNITY BENEFITS AGREEMENTS: MAKING DEVELOPMENT PROJECTS ACCOUNTABLE 9 (2005), available at http://www.goodjobsfirst.org/pdf/cba2005final.pdf.

[2] Id. at 10.

[3] Vicki Been, Compensated Siting Proposals: Is it Time to Pay Attention?, 21 FORDHAM URB. L.J. 787, 794–95 (1994);William Ho, Community Benefits Agreements: An Evolution in Public Benefits Negotiation Process, 17 J. AFFORDABLE HOUS. & CMTY. DEV. L. 7, 9 (2007/2008).

[4] Harold Meyerson, No Justice, No Job Growth: How Los Angeles is Making Big-Time Developers Create Decent Jobs, AM. PROSPECT, Nov. 5, 2006, at 39.

[5] See Been, supra note 3.