Mandatory Inclusionary Housing – Is it good or bad?

The Mandatory Inclusionary Housing Program (MIH) was introduced in March of 2016, as part of Former Mayor DeBlasio’s “Five-Borough-Ten-Year-Plan” to battle the chronic housing crisis that plagues NYC. This Program requires deep affordability in order to get construction permits for developments with more than 10 dwelling units. The program also provides a higher zoning to sort of compensate for the deep affordability requirements. Any private or large-scale rezoning that occurred after the debut of this program is required to comply…

So is MIH good or bad?

Drawbacks: This program targets lower income levels, which results in lower rental income. When compared to other privately subsidized programs, this is considered deep affordability. Another drawback would be that developers need to consider that MIH will impose additional bureaucratic procedures and requirements, which can be very daunting/intimidating for laymen. This can also cause project delays, specifically when the process is not coordinated with expertise.

Benefits: The maximum floor area ratios that are otherwise allowed as bonus floor area under the Voluntary Inclusionary Housing Program, are applied to MIH developments as well. In short, the City is compensating for the very deep affordable housing requirements by giving back free floor area. Another benefit to consider is that the MIH affordable housing units may be utilized towards compliance for the affordable housing requirements set forth by the 421a(16) tax exemption program. You can get two benefits for every affordable housing unit.

So is it good or bad? You decide…

But one thing is definite…. If you are developing an MIH site, doing it right is the trick. Hiring the right professionals will surely impact if your property will look good or bad…

For more information on MIH, click here.

FYI: Popular large-scale areas that were rezoned as MIH include, East New York, Harlem and the recently rezoned Gowanus.

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