Recent changes to New York City zoning laws will now permit many property owners in the five boroughs to profit greatly in developing neighborhoods. Under NYC Mayor Bill de Blasio, a huge rezoning plan is now in effect. The goal is to create affordable housing that accommodates people with moderate income and spurs economic development in targeted areas of the city.
The new zoning plan can turn things around for homeowners who are struggling to meet their mortgage payments and allow them to remain in the neighborhood they love. As an important added bonus, when structured accordingly, some homeowners may be able to stay in their home and live rent free for as long as they wish.
The glamor and economic opportunity of New York attracts many new residents. The rezoning plan is designed to alleviate the housing crunch in the city by protecting existing housing, allowing taller buildings and encouraging new development. Current zoning districts are Commercial (C), Residential (R) and Manufacturing (M). The plan would rezone some of the “M” zoned land now designated manufacturing districts and authorize residential growth.
In some areas, land previously zoned for manufacturing will now allow for mid-density residential development, often with retail space on the lower floors. The new plan would also eliminate some parking space requirements to free up more land for residential development. Another aspect of the rezoning plan that is under consideration is allowing multi-floor industrial buildings to “densify” industry. For many New York property owners, rezoned developing neighborhoods present a major financial opportunity.
Zoning Changes Benefit Homeowners
The new zoning law allows owners to build on more of their property by adding a level to make the building taller, creating housing in a basement area and/or expanding square footage to the side or around the back. In other words, what was once a 2-family home may now be zoned as a 10- or a 20-unit property. Homeowners benefit by creating more residential units that can generate a steady income stream from renters. The effect on homeowners struggling to keep up with their mortgage payments is that they get to stay in their homes and live rent free until they decide to move out.
Connecting with a Real Estate Development Company
Property owners who want to take advantage of changing New York City zoning laws can partner with a real estate company to optimize their situation. Partnering with an agency that specializes in urban development provides the property owner with a number of distinct advantages. The agency will provide all the funding so the homeowner has no responsibility to put up any money. They will hire architects and developers to complete the job and act as the project manager from start to finish.
When the project is completed, the property owner benefits from increased equity and a steady cash flow from rental income. The rental income can be used to pay off any mortgage on the property, so in effect the owner lives in the house rent free.
The Best Alternative
Taking advantage of the new zoning laws by partnering with an accredited real estate company can be the best option for people who are having a hard time meeting their mortgage payments and want to avoid foreclosure.
Refinancing: A less attractive option is to refinance the existing mortgage loan on the property to lower the monthly payments and make them more affordable. However, in order for the bank to agree to refinance you may need to show at least 20 percent equity in the property and you must be able to qualify for the new mortgage loan.
Loan Modification: If refinancing is not an option, a loan modification is another possibility. Banks are often reluctant to give out loan modifications, and if they do, they may offer a bad deal where the you wind up paying more than the house is worth in the long run in exchange for a lower monthly mortgage payment.
Walking Away: A fourth option is to give up the home and the equity in the property by walking away in a deed in lieu agreement with the bank.
Short Sale: A short sale is often a better option If the property will not produce enough in a traditional sale to cover the mortgage. Some people find themselves in this situation if they miss back mortgage payments and the interest, fees and escrow charges start piling up.
With the new zoning laws, you can increase your equity in the home and use rental income from additional units to cover your monthly mortgage payments. This option can be the best alternative by far for struggling homeowners who live in the 5 boroughs. A real estate company specializing in avoiding foreclosure can give you the one-on-one advice you need to make the right decision for the best result.
Ten frequently asked questions about short sales
Living Rent Free
If you are a property owner in the 5 boroughs, taking advantage of changing zoning laws can be the best way to avoid foreclosure and create an income-producing property that allows you to live rent free for the rest of your life. Realty Warehouse enjoys an A+ accreditation rating from the respected Better Business Bureau. The company has a program in place to help New York homeowners who want to take advantage of rezoning laws and contribute to the development of their neighborhood.
If you own property on Long Island or in the 5 boroughs, Realty Warehouse can help you avoid foreclosure by helping you find right option and guiding you through the process. Whether it is a short sale, a rent-to-own agreement or a partnership to develop your property, experienced representatives at Realty Warehouse will give you the best advice. Realty Warehouse has a relocation department that can help you find more affordable housing, and the company may be able to get you money for relocation.
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This blog is for informational purposes only, subject to change.