Mayor Bloomberg’s plan to invest more than a billion more dollars in building and preserving housing across the city was welcomed with great fanfare last week, but his proposal is not just about newfound cash: He’s also called for making some sweeping changes to city housing policies that could generate affordable apartments for years to come.

The heart of the mayor’s “New Marketplace” plan shifts $500 million in federal money now used to maintain the shrinking stock of city-owned apartments, and leverages city bond funds to free up another $550 million, to create and preserve roughly 25,000 homes and apartments over the next five years. (Another 40,000 will be built or rehabbed through the city’s current commitments.)

This proposal won’t amount to nearly as much as did Mayor Koch’s housing initiatives 20 years ago: Bloomberg seeks to build 5,400 new units a year-about 1,700 of which will be affordable to families of four earning less than $37,680-a relatively minor increase from recent production levels that were the lowest in decades. In the early 1990s, as the $5.2 billion, 10-year Koch plan wound down, 7,800 new affordable units were built each year.

Still, affordable housing advocates unanimously laud the mayor for making housing a priority even as the city cuts capital spending elsewhere. “In the context of the city budget situation, it’s a major step forward,” said Joe Weisbord of Housing First!

And even though the sums of money in the mayor’s plan are modest, some of his ideas could spur the building of more affordable apartments-in some surprising ways:

• More SROs? In the mid-1950s, city officials banned for-profit developers from building new single-room occupancy housing, typically small private rooms with shared kitchens and baths, because SROs had developed a reputation as crime-ridden hovels. Bloomberg proposes lifting the ban to “encourage the development of small dwelling units for singles.” This would require City Council approval.

• NYCHA’s New Neighbors? The city housing authority owns hundreds of acres of vacant or underutilized land. The mayor hopes the city can build new affordable housing-perhaps for ownership-on that property, and staff at the city’s department of Housing Preservation and Development is already meeting with housing authority officials to make that happen.

• No More Land Giveaways? Neighborhood housing developers have long bemoaned that city agencies like the Department of Citywide Administrative Services and the Economic Development Corporation have been allowed, with little public review, to sell property that could be used for new housing. So the Bloomberg administration says it plans to shift oversight of all city property sales and giveaways to Deputy Mayor Daniel Doctoroff, who will “elevate housing development and neighborhood revitalization as priorities.”

How successful these-and other-new initiatives will be is anyone’s guess, but housing professionals are very encouraged. “We have to be very watchful to see that the new resources are actually channeled, and that their use and distribution are fair and just,” says Community Service Society housing analyst Victor Bach. “But the mayor should be congratulated.”

For more on Mayor Bloomberg’s plan, see ON THE WATERFRONT