Continuing our “Educating Zohran” series…
Today, we offer more evidence that mayoral candidate Zohran Mamdani’s pledge to build affordable housing for $500,000 per unit (with union workers) is off by a factor of two.
The latest examples are the $150 million redevelopment of Parkway Hospital in Forest Hills, which will yield 145 units of affordable and senior housing, and New Destiny Housing’s $57 million Bronx development with 72 units, including 43 for domestic violence survivors.
The Queens project at 70-35 113th Street, by Jeff Fox’s Foxy Development and Selfhelp Realty Group, also includes space for a Jewish center, so we can’t just divide the total cost by the unit count to get a per-unit cost. But clearly, it’s a lot more than $500,000. The typical cost of nonunion-built affordable housing in the city is about $800,000 per unit.
Mamdani’s union construction would cost more, if affordable housing developers actually built that way. Which they don’t.
As is customary with affordable housing, funding for the Queens and Bronx developments was patched together over several years from a plethora of sources.
Foxy got a $37.5 million construction loan from TD Bank, a $40.1 million permanent loan from Community Preservation Corporation, a $70.7 million loan from HPD’s Senior Affordable Rental Apartments program, $18.24 million in federal HOME funds, and $3.625 million from state agency Homes and Community Renewal. Construction begins Wednesday.
New Destiny’s project, which broke ground last week on Webster Avenue, includes $25 million from HPD’s Supportive Housing Loan Program, $16 million in Low-Income Housing Tax Credits, and $9.7 million from the OTDA’s Homeless Housing and Assistance Program.
If you’re not up on your acronyms, OTDA is the state Office of Temporary and Disability Assistance. New Destiny also got help from the Corporation for Supportive Housing and Deutsche Bank’s supportive housing arm.
This complicated array of funding sources, each of which takes time and comes with fees, is one reason affordable projects cost more than market-rate development.
Mamdani says he would simply issue $70 billion in bonds to pay for his housing. That would be simpler and more efficient, but not enough to cut per-unit costs in half. Regardless, a bond issuance of that size would require state approval, which is extremely unlikely.
Gov. Kathy Hochul’s former counsel, Liz Fine, explained why in a refreshingly honest op-ed last week: “The government builds roads, bridges, public buildings, infrastructure, and even housing. But it is wildly expensive for the government to build housing and so at the end of the day, we need to rely on private developers.”
What we’re thinking about: Contrary to the common sentiment that rents never go down, in the nation’s 50 largest metro areas, the median asking rent for units with two or fewer bedrooms dropped 2.2 percent year-over-year in August to $1,713, and is down 2.6 percent from the August 2022 peak, according to Realtor.com. That’s 25 consecutive months of annual declines. Send thoughts to eengquist@therealdeal.com.
A thing we’ve learned: Only 14 people own more land in the United States than Stefan Soloviev, according to The Land Report’s latest ranking. Soloviev is a grain fanatic with a voracious appetite for farmland. His place on the list has little to do with the property he inherited from his father Sheldon Solow, a portfolio which includes office and multifamily buildings, as well as a vacant parcel just north of the U.N. building where he wants to build a casino-based project, Manhattan’s largest development site.
Elsewhere…
— Mayor Eric Adams’ re-election chances remain slim, but super PAC Empower NYC has raised nearly $1.5 million to back his independent run, much from real estate developers with projects needing city approval, according to The City. Donors include firms seeking rezonings, luxury condo approvals or lucrative city leases, with contributions ranging from $15,000 to $250,000.
— The U.N. General Assembly comes to Manhattan next week, and with it comes some of the city’s worst traffic. While the MTA could raise congestion pricing as a deterrent to driving, don’t expect that, according to Crain’s. Sources told the outlet that Gov. Kathy Hochul likely wouldn’t let any toll hikes happen — especially before an election year.
— “Friends” lovers, rejoice. A permanent Times Square location of the ’90s-era sitcom’s coffeehouse Central Perk is set to open permanently this fall after a series of pop-ups, Gothamist reported. The cafe will feature the show’s iconic orange couch and a menu designed by James Beard winner Tom Colicchio.
— Quinn Waller
Closing time
Residential: The top residential deal recorded Tuesday was $18 million for a 4,600-square-foot co-op unit at 1125 Fifth Avenue on the Upper East Side. Sabrina Saltiel with Douglas Elliman had the listing.
Commercial: The top commercial deal recorded was $6 million for a 27,425-square-foot industrial property at 301 Walton Avenue in Mott Haven.
New to the Market: The highest price for a residential property hitting the market was $15 million for a 5,499-square-foot condominium unit at 37 Warren Street in Tribeca. Corcoran’s Noble Black & Partners has the listing.
Breaking Ground: The largest new building permit filed was for a proposed 1,073,485-square-foot, 10-story detention center at 357 Southern Boulevard in the Bronx. Donald Henry of Urbahn Architects filed the permit on behalf of the New York City Department of Design and Construction.
— Matthew Elo
