In Washington, a key change to an affordable housing program is in the works.
Low-Income Housing Tax Credits do not get a lot of attention but fund thousands of units of housing in New York each year.
This week, Democratic Senate Finance Committee Chair Ron Wyden and Republican House Way and Means Chair Jason Smith announced an agreement on legislation that includes key changes to the program long sought by affordable housing groups.
Stay with me: Under the program, housing developers sell the credits to private investors, who use them to offset their taxes. The sale proceeds help fund affordable housing projects. There’s a 4 percent credit, which is as-of-right, and a 9 percent credit.
Congress limits how much of the larger credit each state can allocate. The new bill would increase the allocation by 12.5 percent through 2025. An identical increase was in place between 2018 and 2021.
The measure would also tweak the so-called 50 percent rule for 4 percent credits. The rule says at least 50 percent of a project must be financed through private activity bonds, which are also capped by the government. The “Tax Relief for American Families and Workers Act of 2024” would reduce that threshold to 30 percent.
The New York Housing Conference predicts the change would generate more than 60,000 affordable housing units in New York over a decade.
However, proposed changes to the tax credit program have a funny habit of garnering bipartisan support and then not passing. We’ll see where this effort lands!
What we’re thinking about: Will state legislators let the city set affordability requirements for a new 421a program? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: In 1920, the state authorized NYC to enact a tax exemption for housing construction. It resulted in more than 760,000 homes being built, more than twice what any other decade produced, according to the Citizens Housing Planning Council. The tax break did not include any affordability requirements.
“The crisis had been averted by the exemption, but the more permanent problem — the inability of private initiative to provide accommodations for those with low incomes — remained unsolved,” a 1960 report by CHPC notes.
New York is still trying to boost housing supply while making housing available for low-income New Yorkers. Howard Slatkin, executive director of CHPC, said this is a challenging balance to strike, but the state also isn’t starting from scratch.
“We don’t have to invent the wheel; we have to perfect it,” he said.
Elsewhere in New York…
— More changes are on the way in the City Council. Council member Chi Ossé is expected to lose his position as chair of the Committee on Cultural Affairs and Council member Tiffany Cabán her role as chair of the Committee on Women and Gender Equity, City & State reports. The changes are viewed as retaliation for their votes against the budget last year. New appointments will be announced Thursday.
— The lobby of a Queens apartment building at 94-43 222nd Street partially collapsed Wednesday, Gothamist reports. A small staircase fell about two feet into a crawl space near the main entrance. No injuries were reported.
— A federal judge threatened to throw former President Trump out of court Wednesday after attorneys in a civil defamation trial complained twice that he muttered within earshot of the jury, Politico reports. An attorney for writer E. Jean Carroll, who sued Trump over derogatory comments he made about her while president, said Trump muttered that the case is a “witch hunt.”
Closing Time
Residential: The priciest residential closing Wednesday was $3.8 million for a condo at 15 Hubert Street in Tribeca.
Commercial: The most expensive commercial closing of the day was $13.5 million for a townhouse at 53 Prospect Park West in Park Slope. Poly Prep Country Day School, as expected, was the buyer.
New to the Market: The priciest residence to hit the market Wednesday was a condo at 520 West 28th Street in West Chelsea asking $9.4 million. Corcoran Group has the listing.
Breaking Ground: The largest new building filing of the day was for a 59,000-square-foot building for vehicle storage and repair at 151 Morgan Avenue, Brooklyn. — Jay Young