By REBNY President John Banks
The US Census Bureau announced last week that New York City’s population has grown to its largest size in recorded history – with 8,550,405 people living in the five boroughs as of last summer. New York City’s continued population growth (coupled with record job growth) is another strong indicator of the City’s success. However, with such successes come challenges.
How are we going to house our growing population, specifically with rents that hard working New Yorkers can afford? This is one of the greatest challenges our City faces going forward.
Last week’s City Council vote to approve Mayor de Blasio’s mandatory inclusionary housing program (MIH) is a potentially important step in the effort to develop more affordable housing in the City of New York.
The provisions of the MIH program fall under four different options (which can be viewed in detail at www1.nyc.gov), and altogether represents the most aggressive affordable housing requirements in the country. Moving forward, all City-approved rezonings, both publicly and privately sponsored, that increase the amount of allowed residential development will be required to set aside a percentage for affordable housing. Relatedly the City is spearheading rezonings in the neighborhoods of: East New York, Inwood, East Harlem, Flushing West, Long Island City, Bay Street, and the Jerome Avenue corridor in the Bronx.
MIH, however, was intended to work in tandem with the now suspended 421a tax abatement program. For example, in a recent article about the importance of 421-a,William Neuman of The New York Times reported that City Council’s Chair of Land Use David G. Greenfield pointed out that the architects of the MIH proposal had considered 421-a so integral that it was “mentioned 438 times, by my count,” in the City’s Housing New York plan.
Assuming an as-of-right tax abatement program is put back in place, MIH is a sensible tool in the belt of the mayor to promote the construction of new affordable housing. When developers conduct their financial analyses as to whether or not to move forward with the construction of a residential building, the density benefits and the affordability requirements in areas that are upzoned in the future will be crucial data points in determining a project’s viability.
Developers will factor the new requirements along with the costs of land, property taxes, and labor when making the decision to build new rental housing.
It will take quite some time to evaluate the effects this plan will have on development in the city.
The changes will not take effect until neighborhood rezonings take place or there are private applications to upzone properties, at which time it would become possible to observe the levels that result from MIH of new construction that result.
Mandatory Inclusionary Housing is a bold experiment and an attempt to address the City’s affordable housing crisis. When a new tax abatement program is finally put in place, it is hoped that MIH, along with tax abatement program and sensible rezonings, will help pave the way for more below-market, or affordable, housing production for our growing population and our rent burdened residents.
In other REBNY News:
New Yorkers may now begin submitting applications to the Peter Cooper Village – Stuyvesant Town (PCVST) Affordable Housing Lottery.
This lottery comes as a part of Councilmember Daniel Garodnick’s agreement to preserve 5,000 units of affordable housing in PCVST over the next 20 years, and all qualified New Yorkers should strongly consider taking advantage of this opportunity.
Applications may be submitted any time before March 31st at www.pcvstlottery.com, and can be made available to those who mail a request with a self-addressed envelope to Peter Cooper Village/Stuyvesant Town, 243 5th Avenue, Box 425, New York, NY 10016.
As a result of CM Garodnick’s advocacy, current PCVST tenants who make it onto the waitlist and move into an affordable unit will not be required to pay a fee for breaking their lease, and Blackstone will pay their moving expenses.
REBNY’s next Secrets of Top Brokers and Industry Leaders seminar will be on March 23rd from 5:30 p.m. to 7 p.m. in the Mendik Education Center. Register now to hear our panel of real estate experts examine and present current trends in real estate to enhance the professional knowledge of each attending agent. Registration is required, and more information can be found on www.rebny.com, or by contacting Yesenia Dhanraj at YDhanraj@rebny.com.
Our Commercial “Crossfire” will be on April 5th from 6:00 p.m. to 8:00 p.m. in the Mendik Education Center. The panel discussion, “New York – Capital and Debt Markets: Where Are We Now?” will include Aaron Appel of Jones Lang LaSalle, Kwasi Benneh of Morgan Stanley, Mike Hofheinz of Originations-MetLife, Dustin Stolly of Jones Lang LaSalle, and Jacob Werner of Blackstone, and be moderated by Evan Pariser of HFF. To register, contact Desiree Jones at DJones@rebny.com, and for more information visit the Events section of www.rebny.com.
REBNY will be honoring outstanding leaders in the field of Commercial Property Management at their upcoming Commercial Management Leadership Breakfast on Thursday, June 2, 2016.
At this highly anticipated breakfast, we will be presenting the John M. Griffin Community Service Award, the On-Site Manager of the Year Award, the Portfolio Manager of the Year Award, the Small Buildings Engineer of the Year, the Large Buildings Engineer of the Year, the Security Professional of the Year, the Porter of the Year, the Rising Star of the Year and the Best Engine Room Award. To register, visit www.rebny.com or contact Cindy Ramotar at CRamotar@rebny.com.