City Council to overhaul affordable housing mandate

March 8, 2023 – Media Mention
The Real Deal

Chair of Herrick's Land Use and Zoning Practice, Mitch Korbey, spoke to The Real Deal discussing the City Council's pitch to require deeper affordability for projects than currently mandated by the city's affordable housing program. The proposed new revisions to New York City's Mandatory Inclusionary Housing ("MIH") may soon be required by law for a majority of projects. 

The article explains that under the current MIH, a de Blasio administration law, developers are mandated to choose from three to four affordability options for the ability to take advantage of rezonings. One City Council member proposed a revision to MIH to require Option 3 for developments. Presently Option 3, the deeply affordable option, states that 20 percent of a project’s units must be reserved for those making 40 percent of the average area median income. The revision would increase that percentage of units to 25. This proposal adds that Option 3 hinges on affordable housing credits from the state. 

The article highlights that this proposal poses a challenge to developers coping with the loss of the 421a tax abatement for rental projects. The industry argues that high taxes on rental housing makes development only profitable for ultra-luxury projects.

“These ideas are innovative and good,” Mitch noted of the speaker’s plan. “But by itself, it is not meaningful. We need to do this with 421a or its replacement.”

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