Buying in Brooklyn

Brooklyn’s De Blasio on Affordable Housing

Earlier this week, NYC Mayor Bill De Blasio released his 115-page plan on how he intends to tackle affordable housing in NYC over the next 10 years. While bits and pieces of his plan had been revealed over the last couple of months, the full plan offered a first-time view on how extremely comprehensive- and possible- Mayor De Blasio’s plan really is. While it may not seem like that big of a deal now, the proposed idea would drastically shape all future development in the NYC area, our area of Brooklyn included.

Reading and dissecting the entire 115 page report may not be as attractive to those who aren’t as obsessed with Brooklyn’s real estate landscape as I am, so I thought it might be beneficial to lay out a purely objective view on the major points of the Mayor’s plan.

 

Mandatory Inclusionary Zoning

This is what most consider to be the keystone to De Blasio’s plan. This provision will mandate that all new developments include affordable housing at a rate that isn’t locked in to the current 80/20 rule (80% market rate units, 20% “affordable”). Rather, the city will decide what the dispersal of market-rate to affordable units is necessary on a case by case basis. In addition, this zoning rule will require that affordable units remain affordable in perpetuity, guaranteeing that low-incomeĀ  and moderate-income households will be able to afford housing in NYC forever. Within the plan is also a redefinition of “very-low income” and “moderate-income” households. Very-low income housing will be defined as a 4 person household earning a gross income of $25,151 to $41,950 annually. Moderate-income households would be those that produce $67,121 to $100,680 a year.

In addition to these inclusionary zoning laws, De Blasio proposes further zoning changes, including making it easier to modify height requirements (taller residential buildings) and cutting the red tape needed to convert old warehouses and factories into residential housing.

 

Budget

De Blasio has budgeted $41.1 billion for the 10 year program, $8.2 billion of which would be picked up by the city. The remaining balance would be paid for by state, federal, and private funds. 60% of this budget would focus on the preservation of existing rent-controlled/stabilized housing; the other 40% would be allocated to new construction. Tenant advocacy, long the oft-recounted absent friend of many a New Yorker, would remain at the forefront of the Mayor’s plan. The plan’s major point of protection on tenant rights is in the building of high-rises near mass transit. Much of the budget will be spent on the identifying of potential spots by city planners and subsequent development.

At the end of the day, De Blasio’s plan would create or maintain 200,000 affordable housing units over the next 10 years- 80,000 new units and 120,000 existing units preserved.

 

Homelessness

No housing plan would be complete without identifying NYC’s alarming rate of growth in the homeless and transient population. De Blasio intends to provide more rent subsidies (almost 33% of New Yorkers spend at least half of their income on rent) as a strategy to prevent homelessness. He will also call for more supportive housing, as well as an increase in the amount of choices for senior citizens in need of assisted-living care.

 

My Take

As a real estate professional, De Blasio’s plan does not at all seem to discourage development- something we were all worried might, in fact, become a real concern. Rather, it encourages development and calls for an ease on some restrictive zoning issues. With as much development that’s happening in the downtown area of Brooklyn right now, an increase only means more choices for those in the borough (as well as even busier days ahead for me, which I welcome!). In addition, De Blasio seems to be making a real effort to confront a real problem, regardless of where one lies on either side of the political divide. If the plan is brought to fruition, it will result in a more diverse NYC with more overall housing units- and there’s nothing wrong with that.

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