City set to impose new requirement of 15% of affordable units for homeless households. Would this tighten pool of units for lower-income households?

So, City Council next week is expected to pass a law requiring that affordable housing, funded with city assistance, include 15% of units for the homeless, at least for rental buildings with more than 40 units, as the New York Times reported yesterday, in Facing Homeless Crisis, New York Aims for 1,000 New Apartments a Year. It would take effect 7/1/20.

This would be a larger mandate than in other cities; the Times note that Boston's requirement is 10%, with buildings 10 units or more. The proposed language, as per NY1's Courtney Gross:

§ 26-2802 Set asides. The department shall require that any developer who receives city financial assistance for a housing development project sets aside for homeless individuals and families at least 15 percent of the number of dwelling units offered for rent in such housing development project that are subject to a regulatory agreement requiring that occupancy of such units be restricted based on the income of occupants in such housing development project.

The Atlantic Yards/Pacific Park impact

Currently, buildings financed under the Affordable New York (former 421-a) tax break--expected to assist future Atlantic Yards/Pacific Park buildings, but not all future buildings in the city with affordable units--have 25% or 30% affordable units.

Assuming that the new mandate is not additive but rather layers onto the current plan, at 15% of the affordable units, that would mean that buildings with 30% affordability would designate 4.5% units of the total for homeless households, and buildings with 25% affordability would designate 3.75% of the total units.

So a building with approximately 800 units, like B4 (18 Sixth Avenue), with 25% affordability, would include 200 affordable units, among them 30 units for homeless households. (Note: that building is under construction, but won't be finished until 2022; I'm not sure if it would be covered by the mandate.)

What's unclear, however, is how this would affect the overall income "bands." In other words, if the homeless households have lower incomes than those otherwise eligible in the lottery for affordable units, do the units for them come get subtracted from the pool of lower-income units, or the middle-income affordable units?

I suspect the former. If so, the societal benefit may be limited; many low-income households who are not homeless do live in drastically constrained circumstances: overcrowded, unsafe, etc. But I'll update this if/when I learn more.

As I've written, the three current options under Affordable New York include:

• Option A: 25% of the units must be affordable: at least 10% at up to 40% of AMI, 10% at up to 60% of AMI, and 5% at up to 130% of AMI
• Option B: 30% of the units must be affordable: at least 10% at up to 70% of AMI and 20% at up to 130% of AMI.
• Option C: at least 30% of the units must be affordable at up to 130% of AMI;

If the homeless set-aside is carved out of Options A or B, that would tighten the pool of units for other lower-income households.

Past practice; future concern

I believe this would not the first time homeless households have moved into Atlantic Yards/Pacific Park buildings. Some smaller fraction of affordable units have gone to formerly homeless households.

It's not that Mayor Bill de Blasio has done nothing; the Times notes that 9% of units financed "are reserved for homeless people, higher than the original 5 percent goal." But this spreads it citywide. Not everyone's happy. From the Times:

But the developers, who agreed to discuss the legislation only on the condition of anonymity, suggested that it made more sense to place housing for the homeless close to other city social services. They favored a framework that gave the city the right to tweak the percentages in each residential project.
...“A robust set of services is essential once housing is provided,” said Basha Gerhards, the group’s vice president of policy and planning. “We join with advocates across the city to ask that the mayor and the Council put forward a plan that truly provides for this.”

That depends on what "homeless" means: it includes people who are down on their luck, often employed, but can't afford rent, or people who have substance abuse and/or mental illness issues and need supportive housing (as noted by Jordan Barowitz of The Durst Organization).