Dive Brief:
- New York City Mayor Bill de Blasio has achieved a milestone in his affordable housing initiative with the passage of game-changing housing and re-zoning plans by the City Council.
- The plan requires developers to meet mandatory set-aside requirements in exchange for building height waivers, special financing and tax breaks, according to ABC 7 NY. De Blasio’s plan also designates 15 neighborhoods where significant changes to zoning rules have been made with the goal of increasing development.
- City officials estimate that the changes passed by the City Council will result in the addition of 80,000 new affordable units and the preservation of 120,000. Developers, according to the New York Business Journal, said that without the 421a tax break, the only available subsidies will result in the building of public housing.
Dive Insight:
As far as the mandatory inclusionary piece of the plan, there are four choices for developers. They range from setting aside 20% of apartments for those at 40% of the median income ($31,000) with a rent of approximately $775, to making 30% of the units in a development affordable for those making 115% of the median ($89,000) with a monthly rent of approximately $2,225.
"New York City is now one step closer to being a city where everyone can work and live," de Blasio said.
The 421a tax incentive gave city developers hefty tax breaks to build new residential buildings; however, the program expired at the end of 2015 when the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York could not agree on the issue of prevailing wages.
After the credit’s expiration, the New York City Department of Buildings said it issued only 453 residential construction permits in January — a 94% drop from December. The number of applications for construction permits also sank after the credit expired.