The Department of Housing Preservation and Development (HPD) is considering stopping the practice of allowing developers who are receiving the tax exemption to generate inclusionary air rights for off-site use. Under the old 421a, developers building inclusionary projects in R10 zoning districts could transfer air rights to other R10 properties in the same community district or within a half-mile radius. Under the inclusionary housing program, extra building space is granted for every square foot of lower-income housing built.
Now, developers will need to keep that density bonus on site— meaning that they can’t bank on selling the air rights or adding them to a market-rate project down the street. The extra square footage will have to stay wherever the affordable units are located.
When asked about the policy change, a spokesperson for HPD commented, “We’re taking a hard look at the rules to make sure we’re not oversubsidizing any developer and that we’re using our resources to generate the most affordable housing possible.”
By some estimates, the new 421a will cost the city $8.4 billion over the next 10 years, so limiting the perks a developer can rake in from two different programs simultaneously may be part of efforts to assuage criticism of industry giveaways.
Add Comment