The Real Deal New York

Policy change urges landlords to maintain affordable offerings

Building owners now able to sell market rate rentals in exchange for preserving low-income units

October 10, 2014 11:00AM

From left: New York Attorney General Eric Schneiderman and Rockrose's Paul Januszewski

From left: Eric Schneiderman and Rockrose’s Paul Januszewski

As of today, New York landlords will be able to sell their market rate rentals — up to 80 percent of an individual building — in exchange for preserving or increasing the property’s number of low-income offerings.

The new guidelines, implemented by the New york state Attorney General’s office, apply to existing rental buildings participating in government programs that offer subsidies such as bond financing and tax breaks to landlords who set aside 20 percent of a building’s units for low-income housing.

Typically such affordability restrictions expire after a fixed period, generally 30 or more years. Many owners convert such properties into condominiums or co-ops at that stage, and so the affordable offerings disappear from the market, according to the New York Times.

The state’s Housing Finance Agency and the city’s Housing Development Corporation and Department of Housing Preservation and Development, which oversee the programs offering subsidies to property owners who set aside 20 percent of apartments for low-income housing, have collectively agreed to require the same general conditions.

Property owners praised the changes, saying there was little downside to the new guidelines. But housing advocates and building owners were somewhat more cautious.

“You have to look at the financial picture of each building individually,” Paul Januszewski, vice president of planning at Rockrose Development, which owns two 80-20 buildings in Manhattan and is currently building another in Long Island City, told the Times. “It could be good policy but it will depend on what the additional constraints will be.” [NYT]Julie Strickland

  • Bullied and Damaged by Rent Re

    I don’t understand how this helps us maintain affordable housing when there is no discount on property taxes for having rent regulated units. This costs the government nothing but it doesn’t really help the buildings that are actually bearing the brunt of affordable housing.

    And aren’t owners scared of taking government subsidies now that J-51 turns out to have created rent overcharges and advocates are arguing that Section 8 should not be cancellable?

  • John Patrick Larkin

    Maybe more people should worry about making sure people arent pushed out of their own neighborhood then padding their pockets..

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