Private Developer Asked to Provide Permanent Affordable Housing??

Hundreds of units of new rental housing are being delayed by tenant advocates who insist that affordable housing within the development be provided on a permanent basis. The over-reaching threatens not only this development, but the entire process by which thousands units of affordable housing have been developed over many years.

The basic model for the development of affordable housing by private developers has been that City government provides subsidies in the form of tax exemptions for a period of years enabling private developers to provide a portion of that housing at reduced rents for the same period covered by the exemptions. The basic problem with this model has always been that such subsidized housing is time limited,requiring government to ultimately extend benefits to maintain that subsidized housing or replace it with new subsidized housing. The tenant advocate response to this conundrum is, apparently, to simply demand that private developers maintain the subsidy forever, without the commitment of additional subsidies by government.

The case in point is the development of a 750 unit rental project on West 57th St by Durst Fetner under the City’s 80/20 program, under which the developer would set aside 150 units for low income housing for 35  years. Tenant advocates, led by Councilperson Gale Brewer, have held by approval of the project insisting that the low income units be permanently affordable. The denial of economic reality by housing advocates will certainly not produce the desired inflow of low income housing and is a negative portent for the future development of affordable housing by private investors.

 

                                             – Jack Freund, Executive Vice President, Rent Stabilization Association 

(Views and opinions expressed are those of the author and do not necessarily reflect the policy or position of the RSA.)

 

Additional sources: