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Industry gives de Blasio housing plan cautious response

By Konrad Putzier

Mayor Bill de Blasio’s $41 billion affordable housing plan has received a cautious response from the real estate industry.

While most observers backed the Mayor’s goal to create and preserve 200,000 affordable housing units, the plan’s cost and mandatory inclusionary

HCR, HPD, HDC, The Hudson Companies And Camba Housing Affordable Housing Development In The Spring Creek Section Of Brooklyn
HCR, HPD, HDC, The Hudson Companies And Camba Housing Affordable Housing Development In The Spring Creek Section Of Brooklyn

zoning drew criticism.


“(De Blasio) plans to double City capital spending on development, but high property taxes are already one of the biggest obstacles to building and operating any apartments,” said Dan Margulies, executive director of the trade group Associated Builders and Owners of Greater New York.

The plan, announced at two separate press conferences on Monday, seeks to create 80,000 affordable housing units and preserve a further 120,000 over the next decade.

The city will spend $8 billion on affordable housing and hopes to fund the remaining $33 billion through private capital as well as federal and state funds.

In a departure from past policies, de Blasio’s plan will require developers in rezoned areas to create affordable units.

If developers want to take advantage of rezoning, they will have to set aside 20 percent of units to low-income and 30 percent of units to middle-income households. The remaining 50 percent can be sold at market rate. This mandatory scheme will replace the current voluntary one, which allows for certain benefits like tax breaks if 20 percent of a building’s units are affordable. Critics argue that the 80/20 model, implemented by de Blasio’s predecessor Michael Bloomberg, has not created sufficient incentives to expand affordable housing in the city.

Unsurprisingly, some industry insiders criticized the mandatory scheme.

Bob Knakal
Bob Knakal

“Anything that creates more requirements means that developers can afford to pay less for land. When sellers are offered less, they don’t sell,” said Bob Knakal, chairman of brokerage Massey Knakal. “The net result in the short term is that there will be fewer affordable units built.”

Seth Pinsky, executive vice president at investment and development firm RXR and former head of the City’s Economic Development Corporation, lauded de Blasio’s goals.

But he also urged the administration not to ignore job creation over its focus on rents, arguing that income is just as important for affordability.

“To avoid unintentionally worsening the issue, the Administration must ensure that, in promoting and subsidizing housing, it is not unwittingly displacing marginal commercial businesses such as those in the industrial sector that have traditionally provided jobs that pay well to those with low to moderate formal education,” Pinsky said.

On the day de Blasio announced his plan, the mayor’s affordable housing goals received a further boost when the city’s Rent Guidelines Board voted to potentially freeze rents for rent-stabilized apartments.

The measure, which still has to be approved in a final vote, calls for rent increases between zero and three percent for one-year leases and increases between 0.5 and 4.5 percent for two-year leases.

The exact increases will be determined in the final vote scheduled for June. A previous proposal by landlord representatives had called for rent increases between 3.6 and 5.5 percent. кредит на карту

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