HPD Seeks Tax-free Financing for the Middle-Class

The downside of all this idealistic talk about building “workforce housing” for the middle class is that there is no easy way to finance them. The Bloomberg administration has used tax-exempt bonds to fuel much of its housing program so far, but those, because of legal restrictions, only work when there is some low-income housing being built.

So, in seeking to finance 3,000 new apartments for middle income families at Hunters Point South (which was originally part of the Queens West site), the city’s Department of Housing Preservation and Development has had to look for another way. It is considering setting up a new nonprofit corporation to issue them instead of funnelling them through the city. But that, according to one leading housing advocate, is a "back-door" way of doing things.

The city’s Economic Development Corporation held two scoping hearings on the project last week. According to the scoping document, the agency will eventually seek a private developer to build 5,000 units on 26 acres of land on the Queens side of the East River and require 60 percent of those will be targeted to middle-income households (roughly those earning $57,000 to $124,000 for a family of four).

Brad Lander, the director of the Pratt Center for Community Development, argues that setting up an alternative financing mechanism only proves that HPD is using tax-exempt bonds the way that they were not intended to be used.

“I don’t think the IRS should let the city do through the back door what they wouldn’t let them to do through the front door, which is to use tax exempt bonds to building middle income housing,” said Mr. Lander, who is also a candidate for a Brooklyn City Council seat. “I would be okay with this if there was some percentage of market, a big percentage of middle and a substantial chunk of low-income housing in it.”

HPD spokesman Neill Coleman said that throughout the city, the Bloomberg administration is financing far more low-income than middle-class housing, and that recent rezonings in Maspeth, Woodside and Jamaica would stimulate the construction of even more.

“We’ve always planned HPS as middle income and known we’d have to approach the financing accordingly,” he said in an e-mail. HPD Seeks Tax-free Financing for the Middle-Class