Policy Change Encourages Owners to Preserve Low-Income Rentals
Owners who currently participate in government programs that offer subsidies such as bond financing and tax breaks in return for setting aside 20 percent of a building’s units for low-income housing will be able to sell their market-rate rentals—up to 80 percent of an individual building—in exchange for permanently preserving or increasing the property’s number of low-income offerings, according to new guidelines implemented by the New York State Attorney General’s office.
Typically such restrictions expire after a fixed period, generally 30 or more years. Many owners convert such properties into condominiums or co-ops at that stage, and so the low-income units disappear from the market. The state’s Housing Finance Agency and the city’s Housing Development Corporation and Department of Housing Preservation and Development, which oversee the subsidy programs, have collectively agreed to require the same general conditions.
Market-rate renters would be the first to be offered the option to buy their units, and those who choose not to buy would be protected by existing rules from being forced out. Any partial conversion plan requires the approval of city and state housing agencies, and the specific terms of the apartment sales would still have to be negotiated between owners and the agencies.