Housing News

New York City faces a severe affordability crisis. According to the report released recently, nearly half of the city’s working-age households do not have the earnings to meet the minimum cost of living. Out of those households, nearly 79% of them are overburdened and spend half of their income on housing. 

The biggest issues across real estate are inflation, interest rates, and supply chain delays. Besides this, the housing operators tend to face other political and financial challenges such as increased costs, and longer waiting periods for government subsidy programs. 

Inflation has increased costs due to which affordable housing providers are facing insurance challenges. The insurers may charge higher rates or deny them coverage. The best way forward would be to work with insurance brokers specializing in securing insurance for affordable housing properties. 

Besides this, the developers should focus on building neighborhoods that embrace affordable housing and understand its value. The developers should try to cultivate relationships with the officials before acquiring a site. 

Developers are exploring alternatives to 100% affordable housing projects due to prolonged waiting periods for Low Income Housing Tax Credit (LIHTC) financing. To circumvent these delays, some are considering blending market-rate or workforce housing units into their projects or incorporating commercial spaces in mixed-use developments.

It is this shift that is addressing the missing middle’s need for workforce housing. New York City’s residents need to win the housing lottery to obtain an affordable rental housing unit whereas other communities are addressing the lack of affordable sale units. 

The provision of housing for low-income and extremely low-income families is essential. Encouraging developers to allocate a portion of units in market-rate properties for these households in exchange for extended property tax breaks can be a viable solution.