Mayoral front-runner Bill de Blasio has pledged to build or preserve 200,000 units of affordable housing during his tenure, a plan that has mostly been well received. But the manner through which he plans to accomplish his goal is making NYC’s real estate industry nervous.
“There will be incentives, there will be opportunities, but there will also be clear requirements for affordability,” de Blasio told a crowd of business executives this month. “When the public action of rezoning creates huge new values for the real estate industry, we will require—not simply encourage, but require—the production of affordable housing.”
It is the requirement to build affordable housing that has so many developers gearing up for a fight. And since similar rules already exist throughout the U.S., affordable housing and real estate interests alike are looking at the successes and failures of affordable housing requirements in cities like San Francisco, Boston, San Jose, Denver and Washington, D.C., according to Crain’s.
For example, critics of Washington D.C.’s affordable housing requirements cite the lack of a “recapture” model, which allows owners to pay the city its initial subsidy back when a property is sold and profiting. Moreover, units built under the D.C. program suffer from poor resale value because they can be resold only to buyers in the same income category as the owner.
And in Denver, Mayor Michael Hancock called the city’s mandatory affordable-housing ordinance “a failure … plagued with loopholes and inconsistencies.”
But to affordable housing advocates these problems are less damning, and more of a learning experience. For instance, a report from the Association for Neighborhood Housing and Development found that in New York less than 2 percent of the 160,000 apartments built over the last 12 years were affordable, proving that rezoning and incentives alone are not enough. [Crain's] –Christopher Cameron