The Daily Dirt: New York tests pro-housing incentive

Twenty down, more than 1,500 to go.

Twenty is the number of towns, villages and cities in New York that have been certified as “pro-housing communities.”

That means, per state rules, that the communities have proven that they approved permits to grow housing by at least 1 percent (if located downstate) or 0.33 percent (if upstate) over the past year. They can also qualify by having approved enough permits for 3 percent growth (downstate) or 1 percent (upstate) over the past three years.

If the localities can’t show this level of approvals, they can still be certified if they pass a pro-housing resolution.

On Wednesday, Gov. Kathy Hochul gave an update on her Pro-Housing Communities program, which she launched in July. In addition to the 20 localities that have been certified, another 80 have submitted letters of intent, the first step in the application process. New York has more than 1,500 towns, cities and villages.

During a press conference, Hochul held up a bunch of carrots, hammering home, for me at least, that carrots are not appealing enough to serve as a metaphor for incentive-based policy. 

“I’m told this is what you are willing to eat to help build more housing. And I’ve got 600 million carrots out there on the table,” she said.    

The orange vegetables symbolized the $650 million in state funding to which pro-housing communities will get priority access. But while there are carrots, there are no sticks for localities that don’t get certified.

The governor has said that she wants to make certification a condition of receiving discretionary funding. It is not clear, however, how the governor will go about doing that, as the Times Union recently pointed out.  

Housing wonks have argued that incentives are not effective in driving housing growth. But Hochul appears to be taking a “you said this is what you wanted” approach to housing this year, and avoiding unpopular mandates that could cost Democrats seats in this year’s elections. She is testing if an incentive-based approach works and if the state legislature will grant “local control” to New York City to legalize basement apartments and increase residential density. 

What we’re thinking about: Is it time to find a funding model that does not rely on revenue from new office construction to finance big, complex infrastructure projects? Send a note to kathryn@therealdeal.com.

A thing we’ve learned: The Independent Budget Office estimates that creating a city mansion tax could generate $270 million annually. Here’s the pitch: The city would add a 1 percent tax to residential sales of $2 million to $5 million; a 1.5 percent tax sales of $5 million to $10 million, and 2 percent on sales of $10 million or more. This would be in addition to transfer tax increases from 2019, and would require state legislation.

Elsewhere in New York…

— Moody’s on Tuesday downgraded New York Community Bank’s credit rating to junk status. On Wednesday, the bank promoted its chair Alessandro DiNello to executive chairman in an effort to stabilize its operations, CNBC reports.  

— Mets owner Steve Cohen and Hard Rock International announced Wednesday that it will commit $1 billion to various community benefits as part of its Metropolitan Park proposal. The benefits include $320 million for a 25-acre park and $480 million in infrastructure improvements, including upgrades to the Mets-Willets Point 7 train station. The news comes after a coalition unveiled alternative plans for the casino site, pitching a parking garage with a park on top. 

— New York is not on track to meet its target to get 70 percent of its electricity from renewable sources by 2030, Politico New York reports.

Closing Time

Residential: The priciest residential closing Tuesday was $7 million for a condo at 500 West 18th Street in Chelsea.

Commercial: The most expensive commercial closing of the day was $17 million for the one-story building at 11-06 Broadway, Queens.

New to the Market: The priciest home to hit the market Tuesday was a condo at 219 East 44th Street in Turtle Bay asking $11.8 million. Serhant has the listing.

Breaking Ground: The largest new building filing of the day was for a 5,000-square-foot, one-story, masonry warehouse at 1958 Eastchester Road, the Bronx. Kenneth Koons Architects filed the permit application. — Jay Young