Big developers weigh in on new 80/20 building homeless policy

“I think it would put the entire 421a program at risk” said Extell’s Gary Barnett

Nov.November 07, 2016 12:12 PM

Some of city’s top developers and housing officials met at the offices of the Real Estate Board of New York last week to discuss the city’s new policy of referring homeless shelter residents to buildings developed with the 421a tax credit.

The policy, which gives the city the right to reserve a portion of so-called “community preference units” for the homeless in buildings that are 80 percent market rate and 20 percent affordable, was buried in an updated affordable apartment marketing materials released by HPD last month, as TRD exclusively reported two weeks ago.

Now developers and policy makers, with the real estate’s most powerful lobby as the broker, are hashing it out.

Department of Housing Preservation and Development commissioner Vicki Been attended the REBNY meeting last week along with about 40 developers, lawyers and marketing agents, the New York Times reported. At the meeting, Been reassured developers that homeless New Yorkers referred to their buildings for residence would be stable, working families who do not require special social services. “They are the working poor, not that different from households already served by the 421-a program,” Been later told the Times.

But it wasn’t enough to convince Gary Barnett, founder and CEO of Extell Development.

“It’s unfair to change the rules of the game overnight for very little public benefit,” Barnett told the Times. “I think it would put the entire 421a program at risk, a program that has generated thousands of affordable units.”

Other developers were, at least on the record, far less concerned than Barnett. L+M Development’s Ron Moelis said that the homeless referrals were “not unreasonable” and Douglaston Development’s Jeff Levine said he saw the proposal as “helping the city” and described it innocuously as “[not] a great exposure to us as landlords.” Adam Rose of Rose Associates said he agreed with Levine but was concerned that those who have already been told they have secured an affordable apartment may now be replaced by homeless applicants.

The new policy would affect Gary Barnett’s latest west-side luxury building, 555Ten, according to the Times. The project received tens of million of dollars in 421a tax breaks in exchange for 120 affordable apartments. The deadline for that building’s affordable housing lottery was July 6 of this year.

The article did not mention any other buildings affected by the new homeless referral policy, although L+M does currently has one project under lottery, Five Blue Slip, part of a 5,500-unit redevelopment plan in Greenpoint, where 102 affordable units will be up for grabs until Dec. 29. [NYT]Will Parker

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