With three months left in office, Mayor Eric Adams has announced a plan to move $1.8 billion from future capital budgets into the current fiscal year to accelerate affordable housing projects in New York City.
The decision comes a day after Adams ended his re-election campaign. According to city officials, the main reason for this shift is to take advantage of recent changes in federal law that make more projects eligible for low-income housing tax credits (LIHTC). Previously, developers needed at least 50 percent of their project funding from LIHTC to qualify; this summer, Congress lowered that threshold to 25 percent. Despite this change, affordable housing developers still need public funding to complete their financing.
Of the $1.8 billion being advanced, $1.5 billion will be allocated by the Department of Housing Preservation and Development (HPD) and the Housing Development Corporation for affordable housing developments. The remaining $300 million will go toward the New York City Housing Authority’s Permanent Affordability Commitment Together (PACT) program, which brings in private developers to renovate and manage public housing campuses—a model based on the federal Rental Assistance Demonstration initiative that saw increased activity under Adams’ administration following earlier successes.
“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.
While Congress did not provide additional federal funds with its recent bill, it did give cities like New York greater flexibility in using existing resources for affordable housing projects.
By moving up this spending, future budgets will temporarily shrink; however, officials note that there is an urgent need for affordable units now. HPD-funded developments are typically carried out by both for-profit and nonprofit groups working together on individual projects. These efforts often face delays of several years while waiting for HPD funding due to project readiness requirements and agency policy goals. To address capacity challenges, HPD increased its staff over the summer so it could process more applications.
A senior city housing official told The Real Deal that only projects already well advanced in planning would be able to access part of the newly available $1.5 billion: “projects must have been pretty far along in the process.” The official also noted that HPD maintains a substantial pipeline of potential developments.
