You cannot build affordable housing in much of the City according to a report from the Furman Center at NYU yesterday. As developers have been saying for years, the numbers do not pencil out. Creating Affordable Housing Out of Thin Air, the Economics of Mandatory Inclusionary Zoning estimated that a new one bedroom apartment in a mid-rise building in an outer borough neighborhood would have to rent for $3200 to justify development. Significantly, eliminating property taxes, would bring that number down to $2000. Neither calculation, however, includes land costs. The report did say that in the highest rent areas of Manhattan and Brooklyn, market rents were high enough to support some affordable units either on site or through credits elsewhere…highlighting the importance of 421a tax breaks.
Speaking of 421a, Herrick Feinstein reported on its website this week that the State Attorney General is investigating developers who get 421a benefits, looking for prevailing wage and tenant qualification violations.
Affordable or not, there will be one less neighborhood to build in. The Landmarks Preservation Commission this week designated another historic district in Crown Heights.
Water for existing buildings will be more expensive. The Water Board is looking at a 3.24 percent increase for the year starting in July.
There may be a way to save on water damage. The Mayors Office of Recovery and Resiliency is reminding property owners in areas that will be added to the flood plain that if they buy flood insurance now, before the official maps change, they can get lower base rates grandfathered in under federal rules.