What Mayor De Blasio’s Housing New York 2.0 means for homeownership in New York City

November 20, 2017

Affordable Housing Alert

Author(s): Erica F. Buckley

Last week, Mayor De Blasio released a revised “Housing New York” plan that aims to build and preserve 300,000 affordable apartments by 2026, as opposed to the original goal of 200,000 units by 2024. What is particularly exciting about Housing New York 2.0 is the emphasis on the preservation and development of affordable homeownership. This is welcome news to homeownership enthusiasts who continue to see the benefits of being a homeowner in New York City. Here is a brief overview of the newest programs for existing and future homeowners.

  • Mitchell-Lama Reinvestment Program: Touted as one of the most successful affordable housing programs in the country, the Mitchell-Lama program brought thousands of apartments to New York City, and its Mitchell-Lama portfolio still includes 45,000 affordable apartments, two-thirds of which are owned as housing cooperatives. With forces to privatize remaining strong, the Mitchell-Lama Reinvestment Program offers a viable alternative for many cooperatives: restructuring of existing debt, new money to fund critical repairs, and new tax exemptions. The Mitchell-Lama Reinvestment Program includes an initial infusion of $250 million that is specifically targeted at the preservation of 15,000 Mitchell-Lama apartments.
  • Home Fix: Being able to complete critical housing repairs is often a hurdle to keeping New Yorkers in their homes. Soon, the City will offer financial assistance to low-income homeowners to make repairs to keep their homes healthy and safe. The new program will be offered through the assistance of partnering community and non-profit organizations.
  • Open Door: In years past, the City had loan products specifically tailored to the development of multi-family homeownership housing. After the financial crisis, those tools disappeared, and now the City is finally bringing them back. The City will once again offer financing for the construction of new cooperative and condominium apartments for first-time homebuyers, with incomes ranging from 80% to 130% of the area median income (for a family of three, $69,000 to $112,000). To qualify for these new apartments, the purchaser must also complete homeownership education training. Open Door seeks to help homeowners gain modest equity appreciation while ensuring this valuable housing stock remains available for future generations.

In addition to the above, Housing New York 2.0 includes other tools that may also serve to support affordable homeownership opportunities. For example, the Mixed-Income Micro program will include new design guidelines to facilitate the creation of apartments to fit changing demographics. This may open the door for co-housing projects that could be formed as cooperatives or condominiums if the financing is right.  Same goes for Tiny Homes in the Big Apple, which seeks to launch a design competition to build small homes on otherwise undevelopable city-owned land.

The recent additions to Housing New York are welcome news for affordable housing stakeholders, including homeowners, advocates and developers. These new tools will fit nicely with some of the existing City programs already in place such as the Neighborhood Infill Homeownership Opportunities Program (NIHOP), and will likely be combined with other innovative tools referenced in Housing New York 2.0 such as the Interboro Community Land Trust – a vehicle to provide stewardship to permanently affordable homeownership housing.

Nixon Peabody is at the cutting edge of affordable housing trends, and is excited to offer legal services to developers and existing cooperative and condominium boards seeking to learn more about these wonderful new additions to Housing New York. Learn more about Condominiums and Cooperatives service offerings here.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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