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Real estate execs laud de Blasio’s affordable housing plan: May 05, 2014

Mayor Bill de Blasio’s unveiling on Monday of a $41 billion plan to create 200,000 units of affordable housing over the next decade — an initiative that he described as “the largest and most ambitious program in the history of the United States” — was immediately hailed by a number of prominent voices from the real estate industry.

Steven Spinola, president of the Real Estate Board of New York said in a statement that the plan “identifies the problems and provides a realistic roadmap for solutions.”

Bill Rudin, CEO of Rudin Management and chairman of pro-business group the Association for a Better New York, said that “we agree that the time is right to take bold new steps to address our city’s housing crisis and we applaud Mayor de Blasio and his administration for issuing this important plan.”
The mayor’s scheme seeks to preserve 120,000 affordable units and build 80,000 new units across the five boroughs. The plan will create 194,000 construction jobs and more than 7,000 permanent jobs in the process, de Blasio added.

David Picket, president of the Gotham Organization, applauded the proposal. He noted that 250 Ashland Place, which Gotham is developing, would keep 282 of the 52-story tower’s 586 units permanently affordable for low-and-middle-income families.

Despite the initial response to the plan, some of the methods the administration will use to meet its aggressive target may not sit so well with the industry. The scheme, for example, calls for mandatory inclusionary zoning, which stipulates that, in all rezonings that substantially increase a development’s housing capacity, the developer will be required to build permanently affordable units “in order to ensure diverse and inclusive communities.”

Spinola and other industry voices have previously expressed their concerns about mandatory inclusionary zoning and have come out in favor of the existing voluntary inclusionary zoning program.

De Blasio’s new plan also puts an end to the 80-20 development model, which provided low-cost financing – in the form of 421-a abatements or other incentives — for developments in which at least 20 percent of units are affordable. The new plan will push for as much affordability as possible at each development project, the mayor said.

“Every site is different and every situation is different,” he said. “We’re going to drive a hard bargain.” He noted the example of the Domino Sugar Factory redevelopment project, where his administration pushed through an eleventh-hour deal to create more affordable units at the site.

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May 05, 2014
Hiten Samtani
http://therealdeal.com/blog/2014/05/...-housing-plan/