Turning Luxury Condos Into Affordable Housing

Housing advocates and policymakers in Brooklyn are working with developers to take half-finished luxury condos (stalled out by the economic crisis) and transform them into affordable housing.

"'There are hundreds of units of empty luxury apartments that developers are unable to sell or rent because of the declining housing market,' said Assembly Member Hakeem Jeffries (D-Brooklyn), whose district includes some of the newest high-rises in Brooklyn. 'It makes sense to figure out a way to convert those empty luxury units into affordable housing for the community.'

The plan is seen by advocates and even some developers as a creative if untested strategy for easing the city's housing woes as credit tightens and prices plummet.

'When we see vacant units around, often times we can fantasize about relieving the homeless crisis, and also the overcrowding issues that we have,' said Michelle de la Uz, executive director of the Fifth Avenue Committee in Brooklyn. 'It's an idea that resonates.'

Jeffries' plan, which he calls Project Reclaim, got its first major boost in February, when Council Speaker Christine Quinn (D-Manhattan) featured a similar blueprint in her State of the City address."

Full Story: Quinn, Jefferies, Towns Look to Reverse-Engineer Development Bubble

Comments

Comments

GReat idea but developers?

Do we really think developers will bite on this? Or is there an alternate strategy that can over-rule it if they resist?

I think it's great idea, though not a novel concept if we put our imaginations to it. What sense does it make to have places for people to live in, that people do not occupy? Who does that help?

Its perhaps even more ironic because these were probably units that were once affordable. -_-

k. freeman
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Don't forget the banks

Just as important is whether or not the lender will bite on it. When banks make condo development loans they typically require that each unit be sold at a price high enough so that the loan is completely paid off by the time 70% or 80% of the units sell. The bank's willingness to waive that requirement will probably depend on how long it is willing to carry the project and its view of the longer-term resale prospects. Speaking generally as a CRE banker, the answers to those questions are 1) not very, and 2) dim. So there probably is room for city agencies to negotiate buying the projects at a discount and converting them to more affordable rentals.

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