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Q&A
Challenges faced by nonprofit developers due to rising housing costs
2:52:42
·
111 sec
Commissioner Valerie White asks Michelle de la Uz about the specific impact of rising costs on nonprofit affordable housing developers.
De la Uz explains that increased costs necessitate seeking more subsidy dollars to maintain deep affordability, which lengthens project timelines.
Furthermore, it negatively impacts nonprofits like Fifth Avenue Committee that rely on earned income (developer and property management fees) to cross-subsidize other charitable aspects of their mission; reduced earned income constrains their overall work.
Valerie White
2:52:42
Hi.
2:52:43
Thank you both for your testimony.
2:52:44
Good to see.
2:52:45
I just saw you.
2:52:48
And I'm going to ask you a question that we've talked about a lot, so you know probably know what's coming.
2:52:53
Can you just expand on the impact of rising cost on nonprofit developers and how that is impacting the industry?
2:53:03
We've had some testimony on that in prior, prior, hearings, specifically on, you know, city contracts and the like.
2:53:12
But in general, it's an issue, so I would love to, you know, hear your thoughts on that.
Michelle de la Uz
2:53:16
Rising costs specifically of the affordable housing?
Valerie White
2:53:19
Or As it relates to nonprofit developers.
Michelle de la Uz
2:53:22
Well, I mean, Fifth Avenue Committee, we build 100% affordable housing, and we're often trying to build the most deeply affordable housing, which means we're layering multiple sources of subsidy or financing in order to reach the most in need.
2:53:38
And so when the costs go up, it just means we gotta go out and seek more subsidy dollars in order to reach those in need.
2:53:44
And so it that means the project takes longer as well, going back to Leila's question.
2:53:49
I mean, it is it is
Valerie White
2:53:51
the difficult impact on the industry, though, on a number
Michelle de la Uz
2:53:53
of I mean, the impact in the industry is that the pipelines are getting longer, the needs are growing, and we're we're trying to, you know, put our finger in a dike, basically, whether it's homelessness or housing cost burden.
2:54:10
For organizations like Fifth Avenue Committee, we have the benefit of having earned income from developer fees and property management fees cross subsidizing the other charitable aspects of our mission.
2:54:22
And so when you can't rely on those earned income sources, that means that you are not able to cross subsidize the other sources of your mission.
2:54:31
And that's a huge problem.