Dive Brief:
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New York City Mayor Bill de Blasio’s plan to allow developers to build taller apartment buildings if they will set aside some of the units for moderate-income tenants is unlikely to spur building in low-rent neighborhoods, The Wall Street Journal reported.
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Builders might be happy to make the deal for buildings where they can charge the typical $2,500-plus a month for a one-bedroom apartment because those high rents could subsidize lower fees for tenants who earn less than $50,000 a year. But few of those high-paying tenants choose to live in the 15 lower-rent neighborhoods included in the plan, so there are no high rents to subsidize those who can’t afford to pay more.
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A report by New York University’s Furman Center said it wouldn’t be worth it for developers to build in neighborhoods where rents aren’t high enough to justify construction costs.
Dive Insight:
The way to persuade developers to build more affordable housing units in cheaper neighborhoods is to offer them tax breaks, government subsidies, and other incentives, housing experts told The Journal.
De Blasio’s plan would create 80,000 units of affordable housing over the next decade.