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Q&A
Financial considerations for mixed-income housing projects
0:17:11
·
80 sec
Council Member De La Rosa inquires about the possibility of market-rate units in certain projects covering the gap in costs for higher wages. Deputy Commissioner Tigani explains the financial considerations for different types of projects.
- The feasibility of higher wages depends on both the mix of market-rate vs. affordable units and the project's geography
- NIH (New Incentives for Housing) projects may take advantage of 485x in areas where it makes financial and operational sense
- The combination of NIH and 485x programs aims to cover high land costs while adjusting for limitations on rental income from affordable housing
Carmen N. De La Rosa
0:17:11
Well, a follow-up question to that is under, you know, certain provisions of NIH, there are there are projects that are coming online that have a percentage of, you know, unaffordable market rate apartments.
0:17:26
And so wouldn't that the same be true for those market rate units covering sort of the gap in cost.
Ahmed Tigani
0:17:34
There are two pieces of that.
Christopher Leon Johnson
0:17:35
And
Ahmed Tigani
0:17:35
one is both yes market versus the affordable and thinking about what the rental income can support in terms of debt and borrowing.
0:17:46
But then also geography.
0:17:48
And I will say that when NIH was created alongside 421a, we understood that these would be 2 programs that would actually need to work together.
0:17:57
So, basically, covering the high cost of land, and adjusting for the limitation on rental income for the affordable housing.
0:18:05
So in these projects, you will see NIH projects that are going to take advantage with 485x in those areas that geographically makes sense on paper.
0:18:18
And for both from a financial perspective and operational perspective can pay the higher wages both for construction workers, building service workers and allow for what's new, which is the MWD MWDE requirements.