(Photo by Kavitha Surana)

(Photo by Kavitha Surana)

While the city council was busy debating high-level zoning changes to promote affordable housing, Community Board 3 also engaged in the ongoing effort to battle the effects of the city’s red-hot real estate market, putting forward ideas for new zoning to preserve downtown Manhattan’s traditionally vibrant retail scene.

At last night’s Land Use meeting William LoSasso presented a proposal from CB 3’s Economic Development Committee to create a special purpose district to limit bars, banks and chains in the East Village and Lower East Side. The area would potentially cover Houston to Grand and Allen to Ludlow or Clinton in the Lower East Side, and most of the East Village.

As discussed in the past, many board members think that tamping down liquor licenses in an already oversaturated area is the key to fostering a more diverse retail scene. This plan stems from some unproven if-then logic: if the market has a taste for the bottle and landlords raise rents ever-higher because they know successful bars and nightclubs can earn significantly more than the lowly pizza maker, then limiting liquor licenses might force landlords to settle for less and level the playing field for other types of shops. (Hey, we all love our local booze hole, but we need a laundromat, bodega and, dare we say, Sock Man t00.)

LoSasso said the plan was a loose starting point, meant to spur discussion and feedback to eventually build a more robust proposal. This first iteration recommends only 25 percent of any block be allotted to eating and drinking establishments and allows only one bank and one chain store per block.

The closest example of a similar rezoning, according to LoSasso, is one on the Upper West Side that limits banks– but since it was only implemented in 2012, it’s too soon to study effects on the neighborhood.

Many board members were enthusiastic about pursuing the zoning changes even while noting it would be an uphill battle, but some warned that zoning is a “blunt tool,” perhaps not the best way to ensure retail diversity.

Tim Laughlin of the Lower East Side Partnership (recently changed from the BID) warned of the unintended consequences of using an untested rezoning strategy to add more artificial constraints to New York’s already-warped real estate market. “There are a lot of pieces to this puzzle that aren’t as easy as arbitrarily setting the limit at 25 percent of a block as eating or drinking establishments,” he said, urging the committee to look “holistically at the community,” which currently doesn’t get very much daytime foot traffic (though that will soon change with Essex Crossing).

Board member Enrique Cruz also wondered about the longterm effects of strictly limiting liquor license establishments, thus increasing their value and perhaps locking current tenants in place. “Will this keep [current establishments] there in perpetuity, because it’s going to be a lot more expensive?” he asked. “What if we are doing something, and we are actually going to make it worse because we didn’t wait for some of that data?” he continued, referring to the Upper West Side’s rezoning.

LoSasso didn’t have all the answers, but said he believed it was necessary to do something big and forceful to try to solve the problem. Last week the EDC also discussed parallel efforts to limit liquor licenses through CB 3’s State Liquor Authority committee, but he said that it would not be enough to make a dent.

“We know what the problem is – we live in it, we complain about it,” he said. “If we kick the can down the road we have nobody to blame but ourselves. I think it’s worth pursuing.”

The committee decided to work towards more outreach with local business owners and public officials. Gigi Li, CB 3’s board chair, said the idea will be discussed at the next SLA committee meeting and the Executive Committee would plan next steps to reach out to stakeholders and hold a public meeting on the idea.