Housing experts say the billions planned to be spent on affordable housing in New York City over the course of 10 years may not trickle down to many builders.
Only about 20 builders have the experience and capacity to secure city, state and federal funding and meet deadlines for Mayor Bill de Blasio’s ambitious affordable housing goals, housing experts told Crain’s. On one end of the spectrum are large builders like L+M Development Group, BFC Partners and Phipps Houses. On the other are smaller firms such as Dunn Development and Bluestone Group.
Despite being identified as the best firms for the job, even they face significant hurdles, according to Crain’s.
Builders need to supplement the city’s $8 billion capital commitment to affordable housing with tax-exempt bonds known as volume cap, and some builders worry supply of the securities might be too low.
“More volume cap is crucial to this plan,” Adam Weinstein, CEO of Phipps Houses, told Crain’s.
Current estimates expect volume cap to drum up $5 billion for the plan.
To reach its goal of building 200,000 affordable housing units, the administration may have to leave the city’s construction unions on the sidelines. The higher cost of their labor would put pressure on margins and ultimately suppress the total number of units that could be built.
The city could, however, bring smaller firms into the fold by pairing them with larger firms. Hunter’s Point South provides a template for this sort of partnership, acording to Crain’s. [Crain’s] — Tom DiChristopher