A tweak in New York State’s implementation of its 80/20 program aims to give affordable housing developments a boost, and balance demand for tax-exempt bonds issued by the state division of Homes and Community Renewal.
The plan, starting in January, is to spread a smaller subsidy amount over more projects. Up until now, developers were able to finance more than 50 percent of an 80/20 building via the program, which offers cheaper financing and qualifies a project for lucrative tax credits. Now, only the 20 percent of affordable units in a development will be eligible.
This new approach mirrors a Tribeca project that teamed the city with the Related Companies, where only $7.5 million in tax-exempt bonds were allowed to finance the project’s affordable housing portion. Under this model, Related was forced to seek traditional financing for the remainder of the project.
“This is a very positive step and very welcome in the affordable housing community,” Martin Dunn, principal at Dunn Development Corp., told Crain’s. “It will free up more tax-exempt bonds for affordable projects, and coupled with the expanded housing subsidies announced by Gov. Cuomo last week, we’re going to see more affordable units in the coming years.”