New York City’s latest affordable housing initiative looks to combine government sources along with private finance in order to build the mixed-income multifamily rental units it’s looking to create.
The program will provide subsidies from the city to projects ranging from extremely-low income and homeless set-aside units, to moderate-income and even market rate units to be located in areas with few reasonably priced options.
“Today, this administration introduces yet another innovative housing finance tool called the Mixed Income Market Initiative,” said Deputy Mayor for Housing, Economic Development and Workforce Maria Torres-Springer in a press release. “MIMI will surface new models for combining public resources and private financing to produce new homes for working families, seniors, children, and all New Yorkers who are struggling, with a particular focus on neighborhoods with little affordable housing.”
Affordable housing construction has long been a political football in New York, as the discussions around this deal done in Brooklyn during former Mayor Bill DeBlasio’s term shows.
MIMI intends to combine city housing subsidies and Article XI property tax exemptions with private funding sources as well as the income generated from the to-be-built market-rate rental units.
“This bold new initiative goes beyond our limited resources and then steps outside conventional financing models to create affordable housing,” said Adolfo Carrión Jr., commissioner of the Department of Housing Preservation and Development.
It will not rely on other sources of public financing for housing, such as New York’s allocation of Federal Low Income Housing Tax Credits. Doing it this way will reportedly allow the city to build these units faster, and let it use the LIHTCs more strategically to meet affordability and fair housing targets.
Those projects selected for the program must have a mix of 70% affordable and 30% market rate apartments.
“Utilizing a mixed income approach provides much better outcomes in terms of creating economically diverse communities while at the same time allowing the higher income units to subsidize the building of lower income units,” said Craig Livingston, chair of the New York Real Estate Chamber, in New York City’s press release. “The added benefit is that buildings built with this program can come to market faster because they don’t have to wait for tax exempt bond allocation.”
