Affordable Housing Production in the Metropolis: Potential Options and Implications of Successors to New York City's 421-a Tax Exemption

On June 15, 2022, the 421-a(16) Affordable New York Housing Program, expired. It is New York City’s largest tax incentive to build affordable housing. The 421-a program offered private capital increased returns through a tax abatement in exchange for a number of affordable units at varying levels of affordability. 421-a gave those with low incomes access to affordable homes in neighborhoods typically out of reach. With no legislative agreement for renewal or modified future program, the pipeline of affordable housing development will be diminished in New York City. This thesis offers an analytical tool and framework to determine outcome potentials for a successor program to 421-a. Using two case study financial analyses in neighborhoods representative of the range in market-rate rents citywide, this thesis: (1) comparatively examines returns based on the recently lapsed 421-a program, the Governor of New York’s proposal for a replacement, and a completely market-rate development without subsidy, (2) performs a sensitivity analysis determining outcome returns for private capital at a range of affordability requirements, (3) tests these outcomes for industry feasibility, (4) aggregates and analyzes survey response data to develop a conceptual threshold of program requirements and find the optimal policy point at which the greatest number of units and deepest affordability is feasible for private capital to consider for development.

Name thesis:degree_name

Master

Department dc:contributor.department

Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2022

Author dc:creator

• Katz, Ashley

Advisor dc:contributor.advisor

• Zheng, Siqi

Statement dc:rights

• In Copyright - Educational Use Permitted
• Copyright retained by author(s)

Licence dc:rights.uri

• https://rightsstatements.org/page/InC-EDU/1.0/

Handle dc:identifier.uri

https://hdl.handle.net/1721.1/147334

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/147334