New Homes for the New Year: HPD Launches Innovative Initiative to Build Affordable Homes in More Neighborhoods

Photo by Vlada Karpovich

New initiative was created to tackle the decades-long housing and homelessness crisis at a time when State and Federal resources are increasingly scarce

The brand-new program aims to build new affordable and mixed-income homes using innovative funding solutions techniques.

HPD released RFEI and will evaluate proposals based on their depth of affordability and their location in the city.

Today, the New York City Department of Housing Preservation and Development (HPD) announced a brand-new program aiming to build affordable and mixed income homes across New York City: The Mixed Income Market Initiative (MIMI). The program was created to tackle the decades long housing and homelessness crisis at a time when State and Federal resources are increasingly scarce. Understanding the urgency of the crisis, the City is pioneering new ways to build new homes for working families, older adults, children, and all New Yorkers who struggle because there are simply too few homes and nearly no affordable apartments available. Using innovative financing solutions and city capital, MIMI aims to support the construction of new homes across the city.

“New York City is in the midst of a housing and affordability crisis, so we must explore every creative idea to deliver the relief New Yorkers need,” said New York City Mayor Eric Adams. “As someone who grew up on the edge of homelessness, allowing New Yorkers to feel insecure about their housing situation is simply unacceptable. The Mixed Income Market Initiative is an example of how our administration is refusing to accept the status quo, and, instead, is relentless in our efforts to accelerate housing production, cut red tape, and get New Yorkers into safe, quality, and affordable homes.”

MIMI facilitates new construction of mixed-income, multi-family rental projects in areas without many low-cost housing options. More specifically, the new initiative provides city subsidies to projects that include homes for a wide range of household incomes – from extremely-low income and homeless set-aside units, to moderate-income and even market rate units. By including market rate units, this new financing model leverages market rate rental units to help finance affordable housing development while increasing housing choice and household mobility in parts of the city where there are fewer low-cost homes available. Additionally, the program aims to more efficiently use cite resources by leveraging higher revenue from market rate units, thus expanding the city’s affordable housing tools while preserving Federal Low Income Housing Tax Credits and other scarce resources for use on other affordable housing projects.

Innovative Financing

In addition to boosting production of new affordable housing throughout the city, the MIMI program aims to use public resources more effectively by combining city subsidy and Article XI property tax exemptions with private financing sources and revenue from market rate units. This mix of financing sources does not rely on other sources of public funding, like the city’s short supply of Federal Low Income Housing Tax Credits (LIHTC). Using city subsidy alongside private financing in mixed-income projects with market rate units enables the city to build affordable housing faster while using LIHTC more strategically to achieve the city’s affordable and fair housing goals.

As part of the city’s fair housing plan, Where We Live NYC, HPD is focused on providing more meaningful choice in the city’s housing market, including neighborhoods where low-cost units are in low supply. By experimenting with new housing models, like MIMI, that cross subsidize public with private funding, the city can create more affordable housing than it can with current resources, while leveraging market rate housing to support affordable housing development everywhere.

Deep & Broad Affordability: The RFEI Proposals and Criteria

Housing developers may apply to participate in the initiative through a Request for Expression of Interest (RFEI) on the HPD website. Projects selected to move forward must be 70 percent affordable and 30 percent market rate.

Proposals may include a wide range of housing options, including homeless-set aside units, supportive housing units, and a mix of income-restricted units at rents between 0% to 120% of the area median income, in addition to the market rate units. One in four of the rent-restricted units must be for extremely low- or very low-income households, inclusive of a 15% set-aside for formerly homeless New Yorkers, and applicants may propose deeper affordability

Preference will be given to proposals with the deepest affordability levels that also efficiently use public resources. The program assumes funding sources for selected projects including discretionary property tax exemptions approved by the New York City Council in addition to city capital. Using these sources, amongst others, HPD is aiming to maximize affordability and the efficient use of resources, none of which will be used to subsidize the market rate units.

Making the Moonshot Goal Real

The Mixed Income Market Initiative comes as the Adams administration explores several ways to increase housing development in parts of the city that have not produced as much growth. In September, Mayor Adams unveiled his City of Yes for Housing Opportunity plan that would create an additional 100,000 homes over 15 years by making it easier to build new housing in every neighborhood. Just this month, Mayor Adams announced the Housing-at-Risk Task Force to save projects that are in jeopardy due to the expiration of the “Affordable Housing New York” 421-a tax abatement program; unveiled the “Green Fast Track,” a streamlined environmental review process to accelerate the production of small- and medium-sized housing projects; and signed into law Intro 1031, establishing a “Fair Housing Framework” to help ensure that every neighborhood plays an equitable role in addressing the city’s housing crisis through community district-level housing production targets and an assessment of unique community housing needs. All of this comes as the Adams administration looks to carry its momentum forward after a record-breaking fiscal year for creating and connecting New Yorkers to affordable housing, including the most ever new supportive homes and homes for formerly homeless New Yorkers.

The administration continues to advocate for state legislation needed to create a new statewide tax incentive, as well as federal legislation such as the Affordable Housing Credit Improvement Act, which would expand the production of affordable housing in New York by increasing the city’s ability to leverage private investment, while remaining committed to exploring all opportunities and finding creative ways to build more affordable housing.

Applications for the MIMI RFEI are currently open and will be accepted through the end of February. The Agency will review applications with the intention of identifying projects that meet the Agency’s goals in the coming calendar year.

The New York City Department of Housing Preservation and Development (HPD)promotes quality and affordability in the City’s housing, and diversity and strength in the City’s neighborhoods – because every New Yorker deserves a safe, affordable place to live in a neighborhood they love. We maintain building and resident safety and health, create opportunities for New Yorkers through housing affordability, and engage New Yorkers to build and sustain neighborhood strength and diversity. HPD is entrusted with fulfilling these objectives through the goals and strategies of Housing Our Neighbors: A Blueprint for Housing and Homelessness, Mayor Adams’ comprehensive housing framework. To learn more about what we do, visit nyc.gov/hpd and connect with us on Facebook, Twitter, and Instagram @NYCHousing.