HPD Previews the AQRS Path for Low-Density QRS Projects
For low-density sites in New York City, the question is no longer just whether multifamily housing is possible. In the right case, the question is whether the added density still works once the affordability obligation is accounted for.
That is where Affordable Qualifying Residential Site (AQRS) comes in.
As part of the December 2024 City of Yes amendments, the Zoning Resolution created the Qualifying Residential Site (QRS) framework for certain sites in low-density districts. Where the maximum residential floor area on a QRS zoning lot exceeds 50,000 square feet and the developer elects to use the increased floor area ratio (FAR) allowance, that additional residential floor area carries an affordability requirement: permanently affordable housing at a weighted average of 80% of area median income (AMI). HPD’s January 2026 AQRS fact sheet describes this requirement and reflects that the program is moving from zoning text into implementation.
As reflected in Belkin Burden Goldman LLP’s (BBG’s) April 23, 2025 article, when HPD released the Universal Affordability Preference (UAP) and updated Mandatory Inclusionary Housing (MIH) application materials, it also confirmed that QRS application materials were forthcoming.
HPD has now posted interim AQRS materials, including the application, checklist, workbook, and fact sheet. HPD expressly states that these materials are interim guidance pending formal rulemaking, and that AQRS applications will ultimately be governed by the adopted rules and the Zoning Resolution. The checklist likewise notes that it is subject to change.
Why AQRS Matters
QRS can unlock additional residential floor area in traditionally low-density districts and, in the right circumstances, make multifamily development viable where the prior zoning envelope did not support it. Section 23-21 of the Zoning Resolution (ZR) now provides separate residential FARs in R1 through R5 districts for standard zoning lots and qualifying residential sites.
For owners, developers, and investors evaluating sites in R3 through R5 districts, and in certain R1 and R2 situations involving existing community facility floor area, that can be significant. The QRS definition in ZR Section 12-10 includes, among other qualifying paths, sites in R1 through R5 districts within the Greater Transit Zone that include a building containing floor space allocated to community facility uses existing as of December 5, 2024.
But the added density is not always free. The Zoning Resolution provides that where permitted residential floor area on a QRS zoning lot exceeds 50,000 square feet, all residential floor area above an amount equivalent to the maximum FAR divided by 1.2 must be restricted through either an affordable housing regulatory agreement or a restrictive declaration. That restricted floor area must serve households at a weighted average of 80% of the income index, with no more than three income bands and no band above 100%.
That formula works out to approximately 16.7% of total residential floor area being affordable at full build-out, a useful planning benchmark that should still be verified on a project-specific basis. That is the real AQRS underwriting question: does the added density still pencil once the affordability obligation is layered in?
485-x Coordination Should Happen Early
AQRS is a floor-area-based affordability mechanism created by the Zoning Resolution and implemented through HPD’s AQRS process. For projects also seeking 485-x, the affordability and tax-exemption analysis should be done together from the outset. The AQRS floor-area restriction and the project’s tax-benefit strategy may not align automatically, and resolving that interaction early, before unit mix and financing assumptions are set, is a practical necessity. HPD does not address this coordination point in the AQRS materials, but it is exactly the sort of issue that should be analyzed early in the design process.
HPD’s Interim Materials Clarify the Approval Path
The release of HPD’s interim AQRS materials also matters because it provides the first real preview of the approval path.
The AQRS checklist places the program within HPD’s Office of Development, Division of Housing Incentives, Inclusionary Housing, and provides for assignment of an HPD Inclusionary Housing Project Manager, a kickoff meeting, Building and Land Development Services (BLDS) review, underwriting, legal documentation, closing, and permit-related sequencing. The front-end materials called for are largely familiar to developers who have navigated prior HPD affordability approvals under the Zoning Resolution.
HPD’s fact sheet goes further and confirms that HPD and the New York City Department of Buildings (DOB) have coordinated to operate AQRS similarly to the existing MIH and UAP programs: DOB will hold the new building permit until HPD’s Inclusionary Housing Program issues a Permit Notice; that notice will follow execution and recording submission of the AQRS Restrictive Declaration; and the developer may not request a temporary certificate of occupancy for the portion of the building in excess of the unrestricted floor area until DOB has received HPD’s Inclusionary Housing Completion Notice, mirroring the permitting and certificate of occupancy sequencing developers are familiar with under UAP and its predecessor, Voluntary Inclusionary Housing.
The workbook also signals that AQRS will rely on familiar HPD affordability concepts, including affordable floor area and requirements relating to unit mix, size, and distribution, even though the program is tailored to the QRS-specific framework. At a practical level, AQRS appears likely to move through the same broader Inclusionary Housing administrative framework as MIH and UAP, rather than through a wholly new regime. For developers, that reduces guesswork and means AQRS can be approached less as an entirely new program and more as a new variation on a familiar HPD approval and completion process.
What Developers Should Take From This Now
HPD has been explicit that the interim materials are subject to future rulemaking and not yet final. But AQRS is now far enough along that developers can begin treating it as a real path rather than promising zoning text. The practical questions are becoming clearer: Does the site qualify as a QRS? What is the actual affordability obligation once the increased FAR is used? How does that interact with 485-x or another tax benefit strategy? And how should the project timeline account for HPD review, restrictive declaration execution, permit notice issuance, and completion signoff?
Those are the questions that will determine whether AQRS creates real value on a given site, and the path is now taking enough shape that developers should begin planning accordingly.
Contact Us
Reach out to your BBG attorney of record or contact us here to discuss how these new requirements may apply to your building and to ensure you are positioned for compliance.
Written by: David Shamshovich, a Partner and co-head of the Tax Exemptions and Zoning Incentives Practice Group at Belkin Burden Goldman LLP. David can be reached at dshamshovich@bbgllp.com or (212) 485-5237.