We often hear from developers that a building required by existing zoning “doesn’t pencil out” and that they therefore must be allowed to build bigger. Several issues make this claim suspect.
First, developers never show the math they use to make this statement. Never.
Secondly, there appears to be no set building size that does ‘pencil out’. Proponents always ask for one more story. If the zoning is two stories, they insist it won’t work, but three will. If the zoning is 3, they need 4. If the zoning is 4, they need 5, etc.
Thirdly, there are plenty of examples that contradict these statements: the Roe Building on the SW corner of 3rd and C St. (3 stories, mixed use); Central Park West across from Central Park (2-1/2 stories, residential); Pizza and Pints (1 story, commercial); the most recent Ace Hardware addition on 3rd St. (1 story, commercial); The Arbors on C St. (3 stories, mixed use); the building on the SW corner of G and 5th St. (3 stories, mixed use), etc.
Fourth: developers site the increase in material costs as part of their reasoning (the number 15% is suspiciously common and has been cited before and during the Pandemic). While material costs definitely increase over time, they certainly increase far less than residential rents. Material costs are also a one-time expense, while rental income continues – and increases – for the life of the building.



