NEW YORK, NY - First revealed in her state of the city address, Council Speaker Christine Quinn and the Bloomberg administration announced this morning via press release that the city's plan to convert stagnant or vacant condominium buildings into affordable housing is moving forward.
The administration and the council said the city would earmark $20 million for the pilot program, which could convert as many as 400 units from market rate to affordable.
The details of the plan are still hazy. Though, potentially, it could work like this:
Say a developer was unable to sell units in Crown Heights for about $500,000. To try to spur their sale, the developer could reduce that price to $400,000. The city, according to the council, could then come in and subsidize units for another $50,000 each. The housing would only be available to certain income levels, and the buyer would have to be able to qualify for a loan.
That scenario would depend on the neighborhood. Obviously, the plan could only be successful if the real estate market continued its downward trend, and developers were willing to lower their original asking price.
But to the pilot program's advantage, condos on 4th Avenue in Brooklyn may not seem like a deal at $450,000 anymore. Even the immune Manhattan market is feeling the real estate recession woe. In the second quarter of 2009, apartment prices there fell 25 percent.
The city will be putting out a Notice of Funding Availability later this month, and it will then work with developers who respond. The city will not own the units, according to the council, but just work with property owners to finance them.
Selected projects would have to fill the following criteria: they would have to stabilize the neighborhood, need the smallest subsidy to become affordable and provide a deep discount to buyers.
Source: GothamGazette.com