NYC implements bold measures to address housing crisis, eyes 500,000 new homes by 2032

Less than two months after securing critical tools in the state budget, Mayor Eric Adams’ administration has rapidly begun implementing measures to tackle New York City’s housing crisis.

The initiatives are designed to incentivize affordable housing through new construction and office conversions, marking a significant step towards the administration’s ambitious goal of building 500,000 new homes over the next decade.

Mayor Adams and Housing Preservation and Development (HPD) Commissioner Adolfo Carrión announced the deployment of two key tools. The first is the “Affordable Neighborhoods for New Yorkers” (485-x) program, which replaces the previous 421-a (16) tax incentive. This program aims to boost multifamily rental construction by requiring a percentage of new units to be income-restricted and rent-stabilized. The second tool extends the 421-a (16) deadline for ongoing projects and introduces incentives for converting commercial buildings into affordable housing.

“To meet the challenge of our housing crisis, we need to use every tool in our toolbox to build more,” said Mayor Adams. “The rapid implementation of these tools is a testament to our administration’s commitment to delivering affordable housing faster, smarter, and more effectively.”

Deputy Mayor Maria Torres-Springer emphasized the administration’s proactive approach: “The steps we’re taking today will encourage new, permanently affordable housing across the city and create homeownership opportunities in the outer boroughs. Our message to New Yorkers is clear: The Adams administration is using every tool to lower housing costs and deliver for working families.”

Affordable Neighborhoods for New Yorkers (485-x)

The 485-x program sets specific affordability requirements for new rental projects:

150+ units in select areas (Manhattan south of 96th Street, western Queens, and parts of Brooklyn): 25% of homes must be income-restricted at 60% of area median income (AMI).

100+ units citywide: 25% of homes must be income-restricted at 80% of AMI.

6-99 units citywide: 20% of homes must be income-restricted at 80% of AMI.

6-10 units outside Manhattan: Option for a smaller benefit with 50% of units permanently restricted.

Construction workers on large projects will receive minimum wages, and building service workers in projects with 30 or more units will receive prevailing wages.

Extension of 421-a

The state budget also extends the 421-a (16) tax benefit completion deadline for projects started before June 15, 2022, to June 15, 2031. Projects must submit a letter of intent to HPD by September 12, 2024, to participate in this extension.

Commercial Conversions

The “Affordable Housing from Commercial Conversion Tax Incentive Benefit” (467-m) program incentivizes the conversion of non-residential properties into residential use with affordability requirements:

– 25% of units must be affordable to households with a weighted average of 80% AMI or below.
– Highest income tier capped at 100% AMI with at least 5% of affordable units at 40% AMI or below.
– Units must remain permanently affordable.

The strongest tax benefits are provided for projects starting by 2026, with decreasing benefits for later start dates.

Addressing the Housing Crisis

Mayor Adams’ administration has been proactive in securing new tools and reforms to spur housing creation, including lifting the “floor-to-area ratio” cap and launching a pilot program to legalize basement apartments.

The “City of Yes for Housing Opportunity” proposal aims to increase overall housing supply through comprehensive zoning changes, potentially adding 108,850 new homes over the next 15 years.

Assemblymember Jenifer Rajkumar, who collaborated on the reforms, praised the multifaceted approach: “The 485-x abatement will accelerate the production of affordable housing while ensuring rent regulation and prevailing wages for construction. This demonstrates how we can deliver for New Yorkers when all stakeholders work together.”

The Adams administration’s swift action underscores its commitment to resolving New York City’s housing crisis and providing affordable housing for its residents.