L+M’s Ron Moelis says 421a lapse won’t kill all affordable housing

Developer says he expects mixed-income rentals to suffer without tax break

New York /
Apr.April 13, 2016 05:50 PM

Many developers have pointed to the death of 421a as a major obstacle to Mayor Bill de Blasio’s affordable housing goals. But developer Ron Moelis, head of L + M Development, said he doesn’t expect the lapse to dramatically disrupt the pace of all affordable housing construction.

“The city’s doing a great job, has a lot of resources to create affordable housing,” he said during a panel at Strook & Strook & Lavan LLP Wednesday. “I don’t think it’s going to kill the production of affordable housing.”

In an interview after the panel, Moelis said housing that is eligible for other state tax exemption programs — like 420-c or article 11 — will continue to be built, but mixed-income rentals or buildings with a higher area median income (AMI) tenant requirement will suffer from the lack of 421a. A majority of L+M’s projects include an affordable housing component, and Moelis said that some of its mixed-income housing developments are stalled by the tax break’s absence.

Following the collapse of negotiations over the future of 421a in January, developers and public officials have emphasized the need for a replacement program to offset sky-high property and construction costs. Without the incentive, they’ve warned, developers will turn to luxury condos because market-rate and mixed-income rentals won’t turn a profit without a property tax break.

Vicki Been, commissioner of the City Department of Housing Preservation and Development, said she “took exception” to the name of Wednesday’s panel — “Will New York City Ever See Affordable Housing?”— saying that the city is “going gangbusters” and has financed 40,000 affordable new housing units in the past two years. She did, however, note that a replacement for 421a is needed to encourage mixed-income rental housing.

Bronx Borough President Ruben Diaz Jr. said that he supports the mayor’s housing goals “conceptually” but he feels that the Mandatory Inclusionary Housing text amendment didn’t adequately take into consideration the different dynamics of the borough. He said that the city needs to create affordable housing that not only helps the Bronx retain lower-income families but also working professionals who are at a higher-income level.

“In the Bronx, it’s very complex,” Diaz said. “What you’re doing is you’re painting the city with one broad stroke. Something as profound as trying to plan out how the city is going to look was done in such haste.”


Related Articles

arrow_forward_ios
1065-1075 Gerard Avenue in the Bronx 
Prana pays Related $36M in Bronx multifamily play
Prana pays Related $36M in Bronx multifamily play
448 East 143rd Street in the Bronx (Credit: Google Maps)
Private developer’s NYCHA project in Mott Haven lands $79M in financing
Private developer’s NYCHA project in Mott Haven lands $79M in financing
1159 and 1184 River Avenue with Maddd Equities' Jorge Madruga (left) and Joy Construction's Eli Weiss (right) (Credit: Google Maps)
Maddd Equities, Joy Construction score $64M for massive Bronx project
Maddd Equities, Joy Construction score $64M for massive Bronx project
Mayor Eric Adams (Photos by Paul Dilakian)
Eric Adams critiques DOB, wants to roll out “red carpet” for development
Eric Adams critiques DOB, wants to roll out “red carpet” for development
Gary LaBarbera, James Whelan, Eric Adams, Tiffany Cabán and Kathy Hochul (Getty, iStock / illustration by Ilya Hourie for The Real Deal)
Council backs off sabotage of 421a
Council backs off sabotage of 421a
Gov. Kathy Hochul (Getty, iStock)
With 421a dying, apartment project financing “has come to a stop”
With 421a dying, apartment project financing “has come to a stop”
At Home's Lee Bird with 2100 Bartow Avenue (Google Maps, iStock) Bronx, New York
Home decor retailer leases 135K sf for first Bronx store
Home decor retailer leases 135K sf for first Bronx store
From left: Ismene Speliotis, executive director, MHANY; Clare Miflin, director, Center for Zero Waste Design; a rendering of The Peninsula in the Bronx (Mutual Housing Association of NY, LinkedIn/Ismene Speliotis, Center for Zero Waste Design)
Bronx development aims to turn trash into cash
Bronx development aims to turn trash into cash
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...