New York City announced Wednesday a pilot program to turn empty or stalled condominium developments into affordable housing, an idea consumer advocates have been pushing for years.
The program, which aims to convert as many as 400 units, is designed to provide grants to real-estate developers and lenders to subsidize the completion of developments if the owners agree to turn the building into rental units for middle-income families, which in New York means an income of up to $126,720 for a family of four.
The pilot project will be funded with $20 million of city funds, but could be expanded at a later date if initial results proved successful.
“It’s not going to solve all of these problems by any means but it allows us to throw out a net and see what we pull in,” said Marc Jahr, president of New York City’s Housing Development Corporation. “We see an opportunity here to really capture affordability at a relatively inexpensive price to the public and to do it in a timely manner.”
The move comes as cities nationwide are struggling to deal with the glut of empty and unfinished construction projects that are threatening to destabilize some communities. New York City has more than 140 stalled construction projects, said Marc Jahr, president of New York City’s Housing Development Corporation.
Nationwide, about 51,000 condos were looking for buyers in May and more supply is on the way. Some 93,000 new condo units will be completed nationally this year, including more than 12,000 units in New York and northern New Jersey, according to Reis Inc., a New York real-estate research firm. In downtown Miami, nearly 23,000 new units have been added since 2003, but only 13,000 are occupied, according to Condo Vultures LLC.
Other cities will be watching New York’s effort closely as they deal with rising numbers of developments that are heading into foreclosure. Housing advocates say that several cities are considering similar programs using funds from a federal grant program designed to restore abandoned homes and complexes.
City officials said New York’s effort would target neighborhoods that are being hard hit by the condo construction bust, including Harlem in upper Manhattan and New York’s outer boroughs. The program is designed to speed along the completion of developments such as 23 Caton Place, a 107-unit luxury condo complex in Brooklyn that stands unfinished after the developer filed for bankruptcy and the lender moved to foreclose on the project.
“It’s a blight and an eyesore,” says Brad Lander, a senior fellow at the Pratt Center for Community Development who is running for city council. Residents met with city officials earlier this year to see if they might be able to recruit a developer to finish the project as a mixed-income housing development. “People here feel like their neighborhood was made worse by the boom and then by the bust,” Mr. Lander says.
Write to Nick Timiraos at firstname.lastname@example.org