The legislation was backed by the area’s former councilwoman, Margaret Chin, who was term-limited.
It would have imposed a $15,000 fee, for the first time, on residents who lived in the area and decided to sell their property to another person without an artist license.
The money would have gone to a fund to bolster neighborhood artists.
“We are still committed to increasing options for existing [arts zone] owners by providing a legal pathway to residential use for non-artists in the neighborhood should they elect to legalize or sell, and to make sure windfall profits of those sales get invested back into the artistic legacy for SoHo and NoHo,” said Adams in a statement.
For decades, city law limited residency in the neighborhood to just those who qualified for an artist license, a relic of the area’s industrial past and pitched battles over how to redevelop it after it was left largely abandoned in the 1960s.
But SoHo and its iconic iron buildings became a much-desired destination for well-heeled New Yorkers — many of whom signed letters while purchasing their apartments that acknowledged that City Hall could require them to prove their eligibility in the future.
Adams’s decision does not impact the recently departed de Blasio administration’s hard-won rezoning of the neighborhood — potentially bringing 3,000 new apartments to the area, which is among the most-well-to-do in the Big Apple.
The artist requirements would not apply to the newly built housing.