Panel: Brooklyn Needs Affordable Housing Plan Geared to Outer Boroughs

Brooklyn needs its own type of affordable housing, according to a panel at the quarterly Real Estate Roundtable.  There are currently two types, which work well in Manhattan but not the outer boroughs, reported Crain’s.

The 80/20 program gives tax breaks to developers who voluntarily make 20 percent of units in their buildings affordable. Another program showers developers with other incentives and more tax breaks for building 100 percent affordable buildings. Pictured above is a recently completed 100 percent affordable complex on Atlantic between Eastern Parkway and Sackman Street in Brownsville.

The state’s Homes and Community Renewal agency, which runs both programs, is going to create a task force to study alternative methods. One idea is a 70/30 building, and another is partial subsidies for 80/20 buildings, said the agency’s commissioner, Darryl Towns.

The 80/20 program is best suited to areas with very high rents, such as Manhattan and downtown Brooklyn, according to panelist David Kramer, principal of Hudson Companies. Crain’s said:

Higher rents in the 80% portion, somewhere north of $40 per square foot annually in Brooklyn, for example, offset initial construction costs and make the whole project feasible when coupled with tax breaks associated with the affordable units. In neighborhoods with much lower annual median incomes, where developers cannot recoup those new development costs through rent and thus wouldn’t leap at ground-up developments, subsidized, 100% affordable projects are an option.

But neighborhoods such as Bed Stuy and Crown Heights, where rents are in the $30 per square foot range per year need other incentives. “Just having 80/20s and 100 percent affordable is leaving so many New Yorkers with less and less housing,” said Towns.

What do you think would work?

New Way to Spur Affordable Housing Mulled [Crain’s]