Inclusionary housing proposal expected to drop subsidies

Alicia Glen: "If you want the tax exemption, you will have to do more."

New York /
Sep.September 29, 2014 12:35 PM

Mayor Bill de Blasio’s mandatory inclusionary housing proposal is expected to try to boost the number of new affordable units in the city by asking developers to build near current benchmarks without subsidies, rather than requiring a substantial increase in the percentage of affordable housing in new developments required.

The de Blasio administration is expected to keep with a roughly 20 percent affordability requirement, rather than up that portion to 30 percent or more, as has been suggested. The idea is to push developers to provide a minimum number of affordable units to even be able to begin construction, according to Crain’s. Rather than increasing the current 20 percent mandate, the city hopes to no longer allow builders to use subsidies to hit affordable housing numbers.

“Mandatory inclusionary will set the floor for what a developer has to provide in order to build a building,” Alicia Glen, deputy mayor for housing and economic development, told Crain’s. “So in some markets, that may be 15 percent, or it could be 20 percent or 25 percent — we haven’t identified a number that will be required across all building types.”

Developers who opt into the current program get  a density bonus and can also tap into other programs granting property-tax abatements, tax-exempt bonds and low-income housing credits. Those can then be sold to generate equity. But the resources could be used instead to build additional affordable projects, under the mayor’s expected proposal. With that new model, builders developing rezoned lots with high market-rate rents may have to set aside a percentage of units as affordable, but won’t rake in any incentives to do so besides the additional size allowance — unless they go above and beyond.

“Then, if you want the tax exemption, you will have to do more,” Glen said. [Crain’s]Julie Strickland


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