By Michael Lappin.
Published April 6, 2023
SEE ORIGINAL ARTICLE IN CITYLIMITS: https://citylimits.org/2023/04/06/opinion-bringing-affordable-housing-to-nys-market-faster-and-less-expensively/
A detriment to building sufficient affordable housing is the long and laborious path projects must go through to reach completion. Projects built via the Low-Income Housing Tax Credit (LIHTC), a major source of affordable housing, have multiple sources of financing and long and complicated processing requirements. In New York City, from the time an application is accepted to a construction start, two to three years can elapse.
Add to that the building out of a project, followed by complicated rent up protocols, and the total process, from start to being fully leased and operational, can take six years or more. If a project requires rezoning and/or sites transferred from public to private ownership, the time period may be even longer, with no guarantee of success. Both Gov. Kathy Hochul’s housing initiative and Mayor Eric Adam’s BLAST plan are designed to improve the latter processes.
Pricing for projects over such long periods is fraught with uncertainty, leading to highly conservative cost estimating. This reverberates throughout the affordable housing industry characterized by ever higher development costs. Thus, the call for more public subsidies to off-set those higher costs, while production still falls behind the need. The result: too much subsidy going to too few projects.
Contrast this with the speed of gentrification in many low and moderate-income communities. A small army of builders and developers looking for the next “hot” neighborhood buy and build market rate housing in residentially-zoned areas, often outpacing affordable housing production. Projects are done “as of right” with the only subsidy, if used at all, the now expired 421-a real estate tax benefit program. Projects typically take two to three years to completion.
Lost in New York City’s tempestuous legislative battles over rent regulation is the fact that the largest number of low- and moderate-income residents in the city live in privately owned rent-regulated housing. This often leads to a blind spot in city housing policy.
According to the last New York City Housing and Vacancy Survey (HVS) published in 2017 (the 2020 HVS was delayed and will be available later this year), an estimated 1.4 million low- and moderate-income New Yorkers live in privately owned, rent-regulated housing. These tenants—retirees, service workers, new immigrants—live in households earning up to 80 percent of the area median income. (MORE)
New funding and subsidies practically beg the Mayor to build affordable senior housing on NYCHA-owned land
Rehabilitation of Parkchester to preserve affordability was a cooperative effort between a new sponsor, lenders, residents, clergy and government. https://citylimits.org/2018/08/22/cityviews-the-lessons-we-learned-from-saving-parkchester/
New York City is beset with challenges in its affordable-housing policy. Efforts to upzone neighborhoods and mandate affordable units in those areas have been met with skepticism as residents fear that gentrification will outweigh any increased odds of obtaining a low-cost apartment…
Read at http://www.crainsnewyork.com/article/20151223/OPINION/151229973/geeky-solutions-for-affordable-housing
NEW AFFORDABLE RENTAL HOUSING FOR NEW YORK CITY: A Program for Large Numbers of Small Buildings
This paper originally prepared in 2014 as a recommendation for the in-coming DiBlasio administration is being updated as a recommendation for the up-coming new administration.
By Michael Lappin and Mark Willis
Download the paper here.
New York Times: Residential Real Estate; Park Slope Walk-Up Revival May Signal New Rental Era
The four-story walk-up is a form of housing not often produced in New York City any longer. But two new side-by-side walk-ups in Park Slope, Brooklyn, may lead the way to resurrecting it for rental housing designed for moderate-income tenants throughout the city…
Read at http://www.nytimes.com/2004/01/16/nyregion/residential-real-estate-park-slope-walk-up-revival-may-signal-new-rental-era.html
Today’s low interest rates provide a window of opportunity for urban communities to take a bold step to increase the energy efficiency of their privately owned apartment buildings. Maturing 5- and 10-year mortgages can now be refinanced at interest rates that are 100 to 150 basis points lower, creating the potential for additional investments in these properties. Read Article