New York City Advances $1.8B to Speed Up Housing Projects

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With just three months left in his tenure, Mayor Eric Adams is squeezing as much housing as possible into his remaining time.

A day after ending his re-election bid, the mayor announced he is shifting $1.8 billion from future capital budgets to this fiscal year for affordable housing projects.

The official rationale is not to burnish his housing legacy, but to take advantage of a new federal law that makes more projects eligible for low-income housing tax credits.

Previously, projects that use LIHTC had to be at least 50 percent funded by them, a threshold many could not reach. This summer, Congress reduced the minimum to 25 percent. But to take advantage of those credits, affordable housing developers still typically need public money to pencil out.

That is where the city’s Department of Housing Preservation and Development and Housing Development Corporation come in. Of the $1.8 billion being advanced from future years, $1.5 billion will go for this purpose.

The other $300 million is for the New York City Housing Authority’s PACT program, which taps private developers to renovate and manage public housing campuses. That program, based on one called Rental Assistance Demonstration, has been accelerated by Adams after promising results during the de Blasio administration.

“We’re not just talking about solving the city’s housing crisis; we’re putting our money where our mouth is to build more housing more quickly,” Adams said in a statement.

The congressional bill did not allocate more federal funding, but it allows the city to use its resources more efficiently.

Front-loading the $1.8 billion will shrink, for the moment, the future budgets from which it comes, but the city clearly needs as much affordable housing as it can get, as soon as it can get it. The HPD-funded projects are built by for-profit and nonprofit developers, who often form joint ventures for individual developments.

Such projects must often wait several years for HPD funding, which is allocated based on project readiness and whether they meet the agency’s policy goals. HPD’s capacity is also an issue, but it added staff this summer to handle more applications.

To get a piece of the newly available $1.5 billion, “projects must have been pretty far along in the process,” a senior housing official told The Real Deal. HPD has a robust pipeline of projects, the official added.