New guidance from the Treasury Department would further affordable housing, but only for low-income units

If the 421-a tax break doesn't return soon, are there any alternatives for developers of the Atlantic Yards/Pacific Park project?

An 8/26/22 Bloomberg article Affordable Housing Developers Look to the White House for Help notes that, nationally speaking, "supply-chain disruptions, inflation and a shortage of construction workers drive costs up and extend development timelines."

But the White House will allow use of American Rescue Plan funding for affordable housing:

The new guidance from Treasury enables the use of these funds to fully finance long-term affordable housing loans. That would make a lot more financing available for projects built using Low-Income Housing Tax Credits, the nation’s primary vehicle for building new affordable housing.

That's low-income affordable housing, not middle-income "affordable housing," as enabled by the most recent iteration of the 421-a.

What Treasury said

From a 7/27/22 press release from the U.S. Treasury Department, Treasury Announces New Steps to Increase Affordable Housing Supply and Lower Long-Term Housing Costs for American Families:

Treasury has previously encouraged governments to dedicate a portion of the $350 billion available to them under the State and Local Fiscal Recovery Funds (SLFRF) toward the development, repair, and operation of affordable housing units. New Treasury data shows that those efforts have yielded strong results: through March 31, 2022, over 600 state and local governments had budgeted $12.9 billion in SLFRF funds to meet housing needs and lower housing-related costs, including $4.2 billion for affordable housing development and preservation. Today’s updates build on this progress and are expected to help local officials fulfill and expand upon these commitments to boost the country’s supply of affordable housing and bring down costs for the American people over time.

The new guidance offered more "flexibility to use SLFRF to fully finance long-term affordable housing loans" and expanded potential affordable housing uses to maximize the availability of those funds.

The latter included an expanded range of federal programs from multiple agencies and allows SLFRF funds to "finance the development, repair, or operation any affordable rental housing unit that provides long-term affordability of 20 years or more to households at or below 65% of the local area median income [AMI]."

And in Brooklyn?

Note that New York City defines low-income as up to 80% of AMI, but the need is even greater for "deep affordability." As ANHD notes, "more than three quarters of rent-burdened New Yorkers make less than 50% AMI."

The Atlantic Yards/Pacific Park "affordable housing" has been disproportionately middle-income, given New York State's generous definition of such housing as participating in a city, state, or federal regulatory program.

That departs from the much-hyped Atlantic Yards Affordable Housing Memorandum of Understanding and Community Benefits Agreement, both from 2005, which promised--albeit without penalties--that 40% of the 2,250 affordable rentals would go to low-income households.

If and when there's a new focus on deeply affordable units, in the 876 more required--and, perhaps, in additional units part of the Site 5 development--that would require additional financing and, perhaps, federal help.

But don't expect anything soon.