As New York’s statewide housing crisis grows more urgent each day, families in New York City
are counting on their elected officials to fight for smart policies that provide more of the affordable housing they need. Recent changes at the federal level – including tax reforms that will hinder new housing production – only underscore the need for state government to utilize every resource at its disposal.
The fact is that more than half of all renters in the city are rent-burdened, meaning that they pay more than 30 percent of their income on housing costs – that means that millions of people in New York City live in unaffordable homes. Many of those households are even more severely burdened, spending 50 percent of their income or more on housing.
That is why all New Yorkers should be concerned about a state budget proposal to eliminate tax credits for three years or more that play a crucial role in building and preserving affordable housing. If state officials do not quickly correct this problem and restore these tax credits in the final, enacted budget, New York State will not be able to produce as many needed affordable housing units – and it is our low- and middle-income families who will pay the price.
The tax credits are so important because, even as New York State has recently invested heavily in housing, both public and private resources are required to meet the need for affordable housing development. The tax credits under threat include brownfield redevelopment tax credits, remediated brownfield tax credits, state low-income housing credits (SLIHC) and other credits that help to unlock and provide the private financing needed to supplement public investment and make affordable housing development possible. Depending on the situation and type of credit being utilized, this can include projects such as the rehabilitation of a historic property or the construction of a new residential building.
By limiting the availability of these credits, New York is essentially undermining their value and eroding confidence among any potential investors, which would prevent the private financing of many crucial affordable housing projects and leave many others in jeopardy. Additionally, the three-year loss of these credits would introduce more uncertainty into the market and have long-term negative impacts on the affordable housing pipeline.
Simply put, the impact of this tax credit deferral would be a reduction in the industry’s ability to build and preserve much-needed housing for low- and middle-income New Yorkers – especially right here in New York City.
Restoring these tax credits in our state budget would ensure that we are better able to mitigate other problems caused by federal tax reform and lack of additional federal housing funds. And while it is important to continue advocating for better federal housing policies, rejecting the tax credit deferral proposal is a step we can and must take now to protect families in communities across our state.
It is not too late for state officials to reverse this mistake and ensure that crucial tax credits are kept in place as part of any eventual budget deal. They must prioritize this issue not just because it is a smart fiscal move, but because it will provide more of the affordable housing that their constituents are demanding every day.
Jolie Milstein is president and CEO of the New York State Association for Affordable Housing (NYSAFAH).