New city rule requires luxury rental buildings to house homeless families

Vacant affordable housing units across the city will now be open for shelter families

New York /
Feb.February 19, 2020 09:15 AM
A rendering of The Dime at 209 Havemeyer Street in Brooklyn (Credit: Fogarty Finger)

A rendering of The Dime at 209 Havemeyer Street in Brooklyn (Credit: Fogarty Finger)

Homeless families will be able to apply for housing in luxury buildings thanks to a new city rule.

Developers who are unable to fill affordable units in their luxury buildings through the housing lottery will be required to provide those apartments to shelter residents, Bloomberg reported. The rule applies to developers who received tax breaks in exchange for setting aside affordable units.

About 200 vacant units were eligible as of Friday, Bloomberg reported, citing data from the city’s Department of Housing Preservation and Development. The city will pay the building owners to lease the apartments.

It is the latest effort to address the city’s homeless crisis. In December, the city passed a requirement for developments of 41 or more units that receive financial assistance from the city to set aside at least 15 percent of units for homeless tenants.

“We saw an opportunity to provide high-quality, permanent housing to some of our homeless neighbors, and we’re seizing it,” Matthew Creegan, a spokesman for HPD, told Bloomberg.

Luxury developments with units set aside for middle-income families — such as Essex Crossing on the Lower East Side and The Dime in Williamsburg — are most likely to be affected, Bloomberg reported. Those middle-income units are only slightly below market-rate rents, so potential tenants sometimes don’t realize they are eligible or prefer not to go through the lengthy approval process.

But a spokesperson for The Dime project said its affordable units are likely to be filled by the usual lottery process before HPD makes them available to shelter residents. “The developers of The Dime believe that given the number of applications, there will be more than enough qualified candidates to fill the 54 apartments,” the spokesperson said, noting that 12,500 applications have been received since the lottery opened Jan. 28.

A spokesperson for Delancey Street Associates, the owner of Essex Crossing, said the development has “zero vacancies” among middle income units and has a “significant” waitlist of qualified tenants.

“We have no reason to believe that Essex Crossing will be impacted by this new policy,” the spokesperson said.

Developers and landlord advocates do not see an upside to the new city requirement, and some builders might consider pulling out of the program, according to Jordan Bardach, COO at landlord consultant City5.

“The developers who agreed to enter their property into a lottery process — this is not what they were signing up for,” Bardach told the publication. [Bloomberg] — David Jeans


Related Articles

arrow_forward_ios
A rendering of 165 Broome Street (Credit: Handel Architects)

Nonprofit plans affordable housing development near Essex Crossing

Nonprofit plans affordable housing development near Essex Crossing
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
Kirk Goodrich, president of Monadnock Development, is opposed to the bill sponsored by Bran Lander. (Getty, Monadnock Development)

Council bill favoring nonprofits for affordable housing will hurt minority-led firms: developers

Council bill favoring nonprofits for affordable housing will hurt minority-led firms: developers
700 Meadow Lane in Southampton and Marcia Riklis (Photos via Bespoke Real Estate; Getty)

Former ad exec asks staggering $175M for Hamptons estate

Former ad exec asks staggering $175M for Hamptons estate
Ray McGuire photographed by Axel Dupeux.

The Closing: Ray McGuire

The Closing: Ray McGuire
8 Montague Terrace (inset) (Photos via iStock; VHT Studios)

What Brooklyn’s record $25.5M sale means for borough’s resi market

What Brooklyn’s record $25.5M sale means for borough’s resi market
429 Kent Ave in Williamsburg and 245 President Street in Carroll Gardens (Photos via StreetEasy; Google Maps)

Brooklyn luxury contracts dip in first week of 2021

Brooklyn luxury contracts dip in first week of 2021
Michael Rubin, HFZ Capital Group’s Ziel Feldman and 187 Dune Road in Bridgehampton (Photos via Getty; Google Maps)

Michael Rubin buys Ziel Feldman’s $50M Hamptons mansion

Michael Rubin buys Ziel Feldman’s $50M Hamptons mansion
arrow_forward_ios

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

Loading...