City of Yes for Economic Opportunity (COYEO)Text Amendments

by | Jul 1, 2024 | Industry Updates

On June 6, 2024, the City of Yes for Economic Opportunity (COYEO) zoning text amendments were approved and became effective. Among the many changes COYEO made to the Zoning Resolution was the complete reorganization of the zoning Use Groups. While this was a long overdue modernization, bringing the Zoning Resolution’s categories in line with the North American Industry Classification System (NAICS), adopted by the U.S. government as the official federal standard nearly 30 years ago and since adopted by many U.S. cities, it can potentially impact a building’s changes of use and certificate of occupancy (CofO).

Prior to COYEO, since 1961, the Zoning Resolution categorized uses into 18 Use Groups – 2 residential, 2 community facility, 12 commercial and 2 manufacturing – but with a significant amount of overlap. For example, eating and drinking establishments (bars and restaurants in plain English) could be Use Group 6A, 6B, 10 or 12, depending on size and whether they have live music or dancing. Various others, including grocery, clothing and furniture stores, could be in at least two different Use Groups, depending on the square footage of the store.

The COYEO amendments consolidated the former 18 Use Groups into 8 – 1 residential, 1 community facility, 5 commercial and 1 manufacturing – and created two new Use Groups: 1 for agriculture and open uses and 1 for public service and infrastructure, for a total of 10. To distinguish the new Use Groups from the old, which were numbered 1 through 18, the new Use Groups are numbered with Roman numerals I through X, as shown in the following table:

All eating and drinking establishments, regardless of size or whether they feature music and/or dancing, are now all one Use Group (VI). All distinctions between different sizes of retail stores have been eliminated so that they also are all just one Use Group (also VI). While this consolidation and simplification will provide greater clarity to property owners as to whom and for what uses they may lease their buildings, the change to the new categories and numbering system will, in some limited circumstances, present some challenges with respect to changes of use and requirements for obtaining a CofO.

The COYEO amendments include a new section (§11-24 – Equivalence of Use Group Classifications), providing that an existing use re-categorized into a different Use Group shall not be considered a change of use, with the implication being that property owners will not be required to obtain a new CofO for the sole purpose of conforming to the new Use Groups. For example, offices, which used to be a Use Group 6 use, are now in Use Group VII. But according to §11-24, such re-categorization is not, in and of itself, a change of use, requiring a new CofO.

This is confirmed in the Department of Buildings (DOB) Service Notice “Changes to Zoning Use Groups,” issued on June 20, 2024. Pursuant to the Notice, an existing CofO using the old Use Groups may continue to be used, provided (a) any proposed alterations are in compliance and conformance with the applicable use and bulk regulations, and (b) that the old Use Group is the equivalent of the new Use Group as shown on the “equivalency” tables on the Department of City Planning website. For example, because per the equivalency tables, a Use Group 6B office is the equivalent of a Use Group VII office, the old CofO may continue to be used, even where the office space is being altered for a new office tenant. In other words, as long as the use is the same, regardless of the Use Group being different, no new CofO is required.

Where a change of use is proposed, a new CofO will be required to reflect the new Use Groups, unless the applicable building permit was approved before July 1, 2024, in which case, the building may still be issued a CofO using the old Use Groups. Any permit application not approved by July 1, 2024, however, will be required to reflect the new Use Groups, and any CofO issued in connection therewith will also be required to reflect the new Use Groups.

Because of the reorganization of the Use Groups, in a limited number of instances, a new CofO will be required where it was not required under the old Use Groups. For example, offices were formerly in Use Group 6, the same as many retail uses. Accordingly, space in a building could be changed from office to retail or vice versa without it being a “change of use” requiring a new CofO. Now, however, because offices are a Use Group VII use and most retail establishments are a Use Group VI use, a new CofO will be required.

The Service Notice, with links to the City Planning “equivalency” tables can be found here.

To find out more about how the COYEO changes to the zoning Use Groups will affect your properties, please contact your trusted R&E attorney or Frank E. Chaney, Counsel with the firm’s Land Use and Zoning Department, who authored this alert.