Dive Brief:
- New York Gov. Andrew Cuomo unveiled plans Thursday for a $20 billion, five-year plan to boost affordable housing and combat homelessness in the state, according to HousingWire. Per Cuomo's office, the undertaking will be the largest investment in affordable housing in the state's history.
- The plan will use $10 billion to build and maintain more than 110,000 affordable units, including 12,000 units produced through Cuomo's new Affordable New York program. The program will also direct $10 billion toward producing 6,000 new supportive housing units.
- The plan's first phase will put $2.5 billion toward new construction of affordable housing, projects and improvements for the New York City Housing Authority, preservation of existing affordable units, and rehabilitation or replacement of public housing.
Dive Insight:
The Cuomo administration's push for the Affordable New York initiative and optimism surrounding the program likely contributed to a surge in the number of New York City's permitted residential units during the first quarter of 2017. The city's Department of Buildings issued triple the number of permits as it did in the same period in 2016, and the most in a decade.
The Affordable New York initiative, which succeeds the 421-a tax credit program, offers tax incentives to developers who construct projects with 300 units or more in certain areas of Manhattan, Brooklyn and Queens, and who pay the area's required minimum wage. However, a February New York University Furman Center report found that the property tax breaks under the new program could outweigh the affordable housing benefit by up to $5.7 million per project. The study also reported that the mandated higher wages, on top of existing labor costs, could push builders to construct smaller projects in areas with no wage mandate.
As housing prices continue to climb across the U.S., cities are seeking new ways to spur the construction of more affordable housing stock. New York City's East Harlem will see a former Metropolitan Transportation Authority bus depot transformed into a 730-unit affordable housing complex, while developers in Chicago have plans to co-locate three of the city's public library branches with new public housing projects. In San Francisco, city officials have proposed plans to commit $44 million to affordable teacher housing that could ease the market's tight inventory and help slow the outflow of teachers to more affordable areas.
