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New York

New York State rejiggers 80/20 program

From left: 80/20 buildings at 89 Murray Street, 1951 Park AvenueAnd 1501 Lexington Avenue
From left: 80/20 buildings at 89 Murray Street, 1951 Park AvenueAnd 1501 Lexington Avenue

A tweak in New York State’s implementation of its 80/20 program aims to give affordable housing developments a boost, and balance demand for tax-exempt bonds issued by the state division of Homes and Community Renewal.

The plan, starting in January, is to spread a smaller subsidy amount over more projects. Up until now, developers were able to finance more than 50 percent of an 80/20 building via the program, which offers cheaper financing and qualifies a project for lucrative tax credits. Now, only the 20 percent of affordable units in a development will be eligible.

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This new approach mirrors a Tribeca project that teamed the city with the Related Companies, where only $7.5 million in tax-exempt bonds were allowed to finance the project’s affordable housing portion. Under this model, Related was forced to seek traditional financing for the remainder of the project.

“This is a very positive step and very welcome in the affordable housing community,” Martin Dunn, principal at Dunn Development Corp., told Crain’s. “It will free up more tax-exempt bonds for affordable projects, and coupled with the expanded housing subsidies announced by Gov. Cuomo last week, we’re going to see more affordable units in the coming years.”

The big winner in the shift is the city, housing and finance experts told Crain’s, as a chunk of the funds that formerly went into 80/20 developments can now be funneled through projects that depend more fully on bonds, such as 100 percent affordable buildings. [Crain’s] — Julie Strickland