Why Building Affordable Housing in New York Has Rarely Been More Difficult

Jed Resnick, CEO, Douglaston Development. Image courtesy of Douglaston Development

The affordable housing crisis in New York continues to be more present than ever. According to a 2021 Housing in New York and Vacancy Survey, nearly a third of metro tenants spend more than 50% of their income on rent each month.

For more than four decades, Development of Douglaston is on a mission to alleviate the city’s affordable housing crisis. Active in the sectors of housing at market price, affordable housing and affordable housing for seniors in the five boroughs, the developer has been extremely busy. Douglaston has several projects underway, including 601 W. 29th St.⁠, a development that includes 703 market-priced and 235 affordable housing units in Manhattan’s West Chelsea submarket, as well as a 60-meter high-rise. floors called 3ELEVEN at 311 11th Ave.


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In an interview with Multi-Accommodation News, CEO Jed Resnick admits that developing affordable housing projects in the metro has never been such an uphill battle. But although the city’s affordable housing sector has undergone many changes since the start of the pandemic, there are still opportunities for development in the industry at the local level.

How would you describe the multi-family climate in New York today?

Resnick: Currently, demand in the multi-family industry has never been stronger, with rental prices and occupancy rates continuing to soar as the city continues its post-pandemic resurgence and more and more people migrate to the region.

This increased demand for housing has also proven the need for new supply to continue to meet market demands. In turn, this proved difficult for developers and potential residents. With the expiration of the 421-a tax abatement, ongoing supply chain issues related to COVID-19, and rising construction costs, creating new rental housing has rarely been more difficult.

What are the major changes that New York’s affordable housing sector has gone through in the past two years?

Resnick: Over the past two years, we have seen major changes and challenges arise in the affordable housing sector, primarily on the construction side of our operations as well as in the lifestyles of our residents. Significant supply chain issues and the extended lead time for materials acquisition certainly lengthened the development and construction processes.

For many of our residents, employment was a big issue. Although many residents are back at work today, New York City still lost more than 200,000 jobs compared to February 2020, which continues to have a direct impact on people residing in our portfolio of affordable housing.

What is hindering the development of affordable housing in New York today?

Resnick: For developers working to create affordable housing offerings in New York City, a myriad of challenges present themselves throughout the development and construction process. The City has limited capital and personnel capacity to close proposed projects in the development pipeline. Due

For many of our residents, employment was a big issue. Although many residents are back at work today, New York City still lost more than 200,000 jobs compared to February 2020. This continues to have a direct impact on people residing in our housing portfolio affordable.

What is hindering the development of affordable housing in New York today?

Resnick: For developers working to create affordable housing offerings in New York City, a myriad of challenges present themselves throughout the development and construction process. The city has limited capital and personnel capacity to close proposed projects in the development pipeline. Because of this, many proposed projects remain on hold in city systems, slowing affordable housing development.

Additionally, many proposed projects remain on hold in City systems, slowing the development of affordable housing.

How can public-private partnerships support the creation and preservation of affordable housing at the local level?

Resnick: The impact of public-private partnerships on the creation and preservation of affordable housing is enormous. To cite just one example we know well, the New York City Housing Authority’s Permanent Affordability Commitment Together initiative is an incredible demonstration of the power of public-private partnerships to change communities.


READ ALSO: New York spends $1.4 billion on affordable housing


By entering into a joint venture with private real estate companies, NYCHA can access a variety of federal funding programs that would not be available without private sector participation. This allows joint ventures to raise billions of dollars in private debt and equity to fund long overdue real estate improvements.

The private market expertise we bring to the table enables higher quality improvements at lower cost, and ensures that NYCHA provides its residents with the healthy, safe and dignified communities they deserve.

Elaborate on the development opportunities that arise in the industry at the local level.

Resnick: The demand for affordable housing remains as strong, if not stronger, than ever. It is crucial to the vitality of New York City that quality and affordable living options are available to all of our city’s workforce in all sectors.

On the market rate side of the industry, we see an opportunity in the development of projects for sale that do not depend on tax breaks to be fundable. Mortgage rates are certainly higher for buyers than they have been, but they remain low by historical standards. With rents as high as they are, home ownership still compares favorably in many cases.

Resnick: The impact of rising inflation and high interest rates has primarily affected us as they impact the construction costs of our projects. The cost of building materials has risen dramatically, and material delivery times have increased dramatically.

In addition to inflation, we are closely monitoring employment statistics in the New York area because ultimately we need continued job growth to help our residents keep pace. of rising costs in their own lives.

How do you see NYC’s affordable housing sector moving forward?

Resnick: As New York City continues to emerge from the pandemic, we as a city and region must be increasingly aggressive in developing housing options for households at all income levels. This means that we also need more affordable housing and market-priced housing.

Otherwise, we risk pricing ourselves out of competition with other cities. If helpful government policies and resources continue to be available to developers, we will continue to move forward in creating affordable, market-priced housing to keep pace with population growth.

Trends to watch?

Resnick: The expiry of the 421-a program and the impact on the market if this incentive is lost, as well as the alternatives to 421-a that could be adopted.

The private market expertise we bring to the table enables higher quality improvements at lower cost, and ensures that NYCHA provides its residents with the healthy, safe and dignified communities they deserve.

Elaborate on the development opportunities that arise in the industry at the local level.

Resnick: The demand for affordable housing remains as strong, if not stronger, than ever. It is crucial to the vitality of New York City that quality and affordable living options are available to all of our city’s workforce in all sectors.

On the market rate side of the industry, we see an opportunity in the development of projects for sale that do not depend on tax breaks to be fundable. Mortgage rates are certainly higher for buyers than they have been recently, but they remain low by historical standards. With rents as high as they are, home ownership still compares favorably in many cases.

Douglaston Development’s pipeline includes several affordable housing projects in several boroughs. What are the most representative projects you are currently working on?

Resnick: Most recently, we announced the completion of the first phase of a two-phase mixed-use project located adjacent to the 250-acre New York Botanical Garden lot in the Bronx.

2856 Webster Ave.
Rendering of the project 2856 Webster Ave. in the Bronx. Image courtesy of Douglaston Development

The project includes 188 affordable housing units for seniors, on-site social services for residents in partnership with Fordham Bedford Community Services, and a full-service supermarket for the entire community on the ground floor. The supermarket is particularly important because the neighborhood has been identified as having inadequate access to fresh produce and groceries under the City’s FRESH program.

How have you felt the impact of rising inflation and high interest rates?

Resnick: The impact of rising inflation and high interest rates has primarily affected us as they impact the construction costs of our projects. The cost of building materials has risen dramatically, and material delivery times have increased dramatically.

In addition to inflation, we are closely monitoring employment statistics in the New York area because ultimately we need continued job growth to help our residents keep pace. of rising costs in their own lives.

How do you see NYC’s affordable housing sector moving forward?

Resnick: As New York City continues to grow as it emerges from the pandemic, we as a city and region must be increasingly aggressive in developing housing options for households at all income levels. . This means that we also need more affordable housing and market-priced housing.

Otherwise, we risk pricing ourselves out of competition with other cities in other parts of the country. If helpful government policies and resources continue to be available to developers, we will continue to move forward in creating affordable, market-priced housing to keep pace with population growth.

Trends to watch?

Resnick: The expiry of the 421-A program and the impact that the loss of this incentive could have on the market, as well as the alternatives to 421-A that could be adopted.