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NYS ahead of NYC: Sets 50 years affordability for housing
August 27, 2013
New York State Ahead of New York City in Making Housing Affordable for the Long-Term: Sets 50 Year Affordability Term for Developments Built with Low Income Housing Tax Credits.
The fight for Permanent Affordability - championed by ANHD and our local member groups - achieved a significant victory last week, with the proposed new State RFP featuring a minimum 50 year affordability term for projects developed using Low Income Housing Tax Credit (LIHTC). This change adds 20 extra years of public benefit with no additional cost by extending the affordability from 30 years to 50 years. This change makes obvious sense. Over the last 5 years, around 90% of NYC developments financed by the State with Low-Income Housing Tax Credits already pledged 50 years of affordability. It was clear that that the 50 year length of affordability works for everybody. Locking it in through the RFP solidifies our commitment to longer term affordability and frees up points to incentivize other aspects of good development and is a smart move by the State. Now it's up to the City to follow suit. Developers have already shown they're willing and eager to do Tax Credit projects that are affordable for longer-terms beyond just for 30 years. This is not a surprise: Low Income Housing Tax Credits are an enormous public subsidy, direct equity provided by the taxpayer that goes straight to a private developer. So it's no wonder that the demand for this subsidy is seriously competitive. In fact, in 2011, when briefly there was an incentive for 60 year affordability, every single LIHTC-financed project pledged the 60 years. No affordable housing opportunities were lost due to longer affordability limits. And no additional subsidy from the government was needed. The best part is that we managed to leverage the competition for tax credits into a doubling of affordability, just with the stroke of a pen. Of course, community-based not-for profit developers, because they are mission-driven to meet neighborhood need, are the surest guarantors of permanent affordability even beyond 50 years. Unfortunately, the Bloomberg administration has neglected the opportunity to lock in this additional affordability like the Cuomo administration has. The City Council leadership has already moved beyond Bloomberg on this issue and taken some important steps to move the permanent affordability ball forward at the City level. The next mayor shouldn't let this opportunity pass again - guaranteeing long-term affordability for Tax Credits projects is an easy and proven step toward ensuring that the investment made in affordable housing doesn't just benefit current tenants and developers, but also the generation of New Yorkers to come.
Blogger - Moses Gates