The 80-story, 1,200-unit project at 130 Liberty Street is the only residential project at the World Trade Center site. This project, also known as 5WTC, is expected to have 25% permanently below market rental housing units. Despite this project providing 300 affordable units – the same number of affordable, New York City financed units since 2014 in the district – activists are seeking 100% of the units to be rented at below market rates.
Without effective public-private partnerships, projects like 5WTC will be unable to increase below market units, much less build an entire tower that consists of affordable housing units. Project economics require at least another $500 million to meet the affordability goal set by activists.
This project highlights the broader question of housing affordability within high-cost urban agglomerations. Although there may be broad agreement among planners, policy makers, and activists that there is a dire need for affordable housing to maintain socio-economic diversity in these locales, financial and bureaucratic impediments severely curtain developers from expanding the number of below market rental units.
In many high-cost areas such as New York City, San Francisco, and Boston, policy makers recognizing the housing affordability crisis run on platforms that seek to expand the below market housing stock. The high financial costs of supporting affordable housing development and the entrenchment of bureaucratic processes associated with large scale residential projects serve as a rude reality check for even the most well-intentioned elected officials. This phenomenon results in affordable housing targets remaining unmet, and an increasing concentration of luxury housing across most sought-after districts of metropolises.
Therefore, innovative solutions are necessary. On the financing side, tax exempt bonds, a rarely used financing tool, may be deployed. For 5WTC, a fresh allocation of Liberty Bonds, previously limited to commercial development, may help. Shifting to the bureaucratic end, the removal of federal, state, and local regulatory barriers may reduce project costs and save time. Perhaps a project meeting a certain affordable housing threshold may be placed on a no administrative cost ‘fast track.’ Most critically, the onus of creating affordable housing development needs to shift away from a developer-centric conversation and evolve to include housing activists, planners, and policy makers on a project basis.
What are some public-private solutions to bridge the gap in affordable housing in high cost, urban areas?
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