Will a key housing program be expanded or repealed under Trump?
Lawmakers and housing advocates have long called for an expansion of the federal Low Income Housing Tax Credit program as a major funding source for building affordable housing. The Affordable Housing Credit Improvement Act, which would expand this program in a few ways, enjoys strong bipartisan support.
Then again, so did previous iterations. Attempts to build on the tax credit program tend to get tangled up in other policy debates.
This year, Trump is looking for ways to pay for various tax cuts. Cato Institute, a libertarian think tank, has suggested repealing LIHTC, citing that it could raise $150 billion to help pay for those cuts.
I sadly cannot predict the future. But even before the tax bill threatened LIHTC, city and state officials have been trying to prepare for a future where the amount of available tax credits remains constrained.
In late 2023, the Department of Housing Preservation and Development launched the Mixed Income Market Initiative, a program that provides financing for housing projects where at least 70 percent of the apartments are affordable, including at least 15 percent for formerly homeless New Yorkers. Projects cannot qualify if they are using housing tax credits. We’re still waiting for that funding to be awarded.
In December, Sen. Rachel May introduced a bill that seeks to create a revolving loan fund that would provide low- and no-interest loans to developers building affordable housing. The idea is to provide mezzanine debt or full construction financing to projects where at least 20 percent of the apartments are rented to those earning at or below 50 percent of the area median income. When the project is completed, the developer can secure other financing to pay the state back, likely at a cheaper rate because the risk of construction and leasing will be out of the way.
The measure calls for an initial investment of $1.5 billion. Projects that are using LIHTC are not eligible for the loans.
These programs, of course, cannot alone make up for the constraints in financing affordable housing, nor can they replace housing tax credits, but show that lawmakers are trying to find alternatives to LIHTC while Congress figures out the program’s future.
What we’re thinking about: A JPMorgan analyst says that Vornado Realty Trust’s stock could get a boost if CEO Steve Roth retires, Crain’s reports. Will that happen? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: Before passing the Safe Hotels Act, the City Council tweaked the bill to exempt hotels with fewer than 100 rooms from a ban on subcontracting out certain services. That amendment means only 27 percent of nonunion hotels are likely to be affected by the law, the Independent Budget Office found. The initial version of the bill would have affected 95 percent of them. The IBO also found that about a quarter of hotels in the city are unionized, and account for almost half of all rooms. — Erik Engquist
Elsewhere in New York…
— The MTA says that, on average, 43,000 fewer drivers entered Manhattan below 60th Street each weekday last week, Gothamist reports. That represents a 7.5 percent decrease compared to traffic projections for this time of year. The agency expects congestion pricing to bring in $500 million in tolls annually, but did not have stats for tolls collected last week.
— A new poll shows former Gov. Andrew Cuomo to be a favorite among likely Democratic voters in a race he has not officially entered, Politico New York reports. The poll, commissioned by Progressives for Democracy in America, asked would-be Democratic voters in the city to choose their favorite mayoral candidate. Cuomo received 32 percent, followed by Scott Stringer with 10 percent. Brad Lander got 8 percent. Seven percent of those polled chose state Sen. Jessica Ramos, while 6 percent selected Adams and state Assemblymember Zohran Mamdani.
— New York Republicans met with President-elect Donald Trump over the weekend, but don’t appear to have much clarity on what will happen to the SALT cap, City & State reports. Rep. Nicole Malliotakis told the publication that Trump “tasked us with coming up with a number that’s fair, can build consensus within our Republican Conference, and is tailored toward the middle-class so they can keep more of their hard-earned money.”
Closing Time
Residential: The priciest residential sale Monday was $7.2 million for a 2,000-square-foot condo unit at 432 Park Avenue. The Midtown unit last sold for $7.7 million in 2015. Engel & Volkers’ Mercedes Berk Team had the listing.
Commercial: The most expensive commercial closing of the day was $14.4 million for a mixed-use, eight-story building at 1590 East 19th Street. The building is 40,000-square-feet and was developed by Gabriel Sakass.
New to the Market: The highest price for a residential property hitting the market was $45 million for a penthouse unit at 20 Greene Street in Soho. The condo is 6,800-square-feet and listed by Compass’s Clayton Orrigo and Stephen Ferrara of The Hudson Advisory Team.
— Joseph Jungermann