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Midtown Manhattan is going to be getting thousands of new and newly affordable apartments, thanks to a landmark deal between the City Council and the Bloomberg administration.

Last Monday, Council Speaker Gifford Miller, West Side council member Christine Quinn and Land Use Chair Melinda Katz announced they had reached an agreement with the administration on the rezoning and redevelopment of the far West Side, from 7th to 12th Avenues, 30th to 43rd Streets. The deal, which will be come before the full council this Wednesday, alters proposed financing for improvements, including open space and the extension of the No. 7 train, to rely less heavily on borrowing, and severs the redevelopment of the area from the administration’s plans to expand the Javits Center and build a sports arena.

It also sets the stage for more than 3,300 new units of affordable housing, as well as permanent affordability for more than 420 existing apartments. City planning officials project that 13,000 new apartments in all can now be built.

The planned rezoning will not require developers to provide affordable housing. Instead, the city plans to deploy powerful incentives. Builders in the area will now be eligible for the “80-20” tax break given in much of Manhattan to those who set aside one in five apartments for households making less than 60 percent of the area’s median income (or about $30,000 a year for a family of four). Usually, 80-20 apartments can go to market rate after 20 years; these new apartments will be permanently affordable.

At the heart of the deal, the rewritten zoning code will include a form of “inclusionary zoning,” for the first time granting builders who agree to produce affordable homes the right to build significantly bigger and therefore more lucrative buildings than those who don’t. They’ll also be able to use various city housing finance programs not available to other 80-20 participants.

The city has additionally committed to selling three sites it owns, whose buyers will have to agree to build several hundred apartments in all for low-, moderate-, and middle-income occupants. One is the Housing Authority’s Harborview project on 56th Street, where unused land will be sold to a private developer and the proceeds used to refurbish the old complex. The sale of another site is expected to generate $45 million, $5 million of which will help expand a neighboring school and the rest of which will be put into a new fund for affordable housing development citywide.

City officials say the package is a historic breakthrough for affordable housing. “I really feel this is not just a new model for the city; I think it’s a new model for the nation,” said Shaun Donovan, commissioner of the city Department of Housing Preservation and Development. “We’ve created the most progressive inclusionary zoning program in the country.”

Activists pressing for affordable housing production through inclusionary zoning say they consider the plan a coup. “There’s a significant affordable housing guarantee built into a rezoning—that’s a big deal,” said Brad Lander, executive director of the Pratt Institute Center for Community and Environmental Development. Lander calls the incentive package an effective way to guarantee the production of affordable housing, even though it does not outright require anyone to build it. But elsewhere in the city, he cautions, where construction won’t be as dense or tall as in Manhattan, it could be harder to structure such powerful incentives. “Mandatory inclusionary zoning would be a better way, citywide, to offer a guarantee.”

The association representing major real estate developers expressed confidence its members will build the affordable housing. “The administration and the council leadership have been speaking to us, the board and our members who would be building here, and that’s always been everybody’s question: Would this be the right incentive to make sure we get the affordable housing?” said Steven Spinola, president of the Real Estate Board of New York. “The answer is absolutely yes.”

Some activists in Williamsburg and Greenpoint, where inclusionary zoning is now under consideration, still say they will not accept anything short of hard requirements for developers to build affordable housing. Said Martin Needelman of Mobilization Against Displacement and Legal Services Corporation A, “80-20 is not available for us in the outer boroughs. We’re very concerned that without a firm guarantee it’s going to be very hard to be assured that [affordable housing development] is going to happen.”

Councilmember Quinn suggested she wouldn’t have minded mandates for Manhattan, either. “It was out of scope,” she noted—not in the city’s zoning proposal, and therefore legally outside the council’s power to consider. “That’s my out.”