NEW YORK CITY—Mayor Bill de Blasio's ambitious affordable housing plan, though laudable, presents challenges, according to participants in a panel discussion Wed. during the “Implementing Affordable” conference in Midtown South. The event was hosted by the Steven L. Newman Real Estate Institute at Baruch College.
The panel, entitled “Financing, Implementation and Architecture,” included Paul Freitag, managing director, Jonathan Rose Cos.; Richard Froehlich, COO and general counsel, NYC Housing Development Corp.; William Stein, principal, Dattner Architects and Charles Brass, partner, Forsythe Street Advisors.
Among the challenges, Stein said, is the regulatory process. “There are an incredible number of complex regulations and a bevvy of agencies that require approvals so to implement the Mayor's plan, it's critical to streamline the process.”
He offered up a suggestion for improvement following Dattner's experience creating a project in the Bronx. “NYC Housing Preservation and Development established a design review committee with all of the relevant agencies involved. The committee got together on a regular basis to review details and address issues as they arose. This was critical for getting the project to 'yes.' “It'd be great to see that type of cooperation on other projects.”
Freitag, who also was involved in the project, seconded Stein's favorable review of the process—and made his own suggestion. “The joint review committee worked really well. Nothing was waived, we still had to go through all of the approvals but this was really effective in making the project go smoothly.”
Further, he asserted, “In order to ensure that New York City residents in need of assistance get the services they need, they get case managers. Developers should get those in order to deal with all of the departments that need to be approached for approvals. It would make a dramatic difference in getting projects to run more smoothly.
Another recent change by the city—inclusionary housing— addresses challenges and presents an opportunity, said Brass. “Inclusionary housing has been a major improvement in the past year. I used to tell clients they had to budget six to nine months but really, it could take a year to a year and a half to get HPD approval. But due to streamlining, a lot of red tape been cut out in terms of disclosure reviews, environmental reviews and design reviews. It would be fantastic if we could do that in other HPD programs.”
For its part, HDC is working to make changes that could have a big impact on the city's efforts to meet the Mayor's goal of developing or preserving 200,000 units of affordable housing.
“The Mayor's plan focuses on people who earn 30-60% of the area median income,” noted Froehlich. Our big tool at HDC is tax-exempt bonds, which makes housing tax credits available, especially at 60%. But we're trying to do more at 30-50%. That means we put more capital on the table but without that, the city struggles mightily.”
According to Froehlich, the city also is pushing for income averaging, which would mean increasing housing credits from 60% to 80% and for the federal government to stay true to the 4% tax credit that comes with bonds.
“It actually comes in at a much lower percent,” he noted, “but if we could get the Federal Government to lock in 4%, we'd get a lot more of the tax credits than we're getting. It's a great way for us to get more capital.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
