Matt Gross (’05, Columbia, M.S.RED) came back to campus and moderated a development-oriented discussion with other leaders of NYSAFAH, on Affordable Housing in New York City. The well-rounded panel provided diverse perspectives, representing the major food groups of real estate development: lending, legal, capital markets, and public and private sector developers. The panel members were: Ashley Hartsook from Raymond James, Rick Gropper from L&M Development Partners, Anthony Richardson (’05, Columbia, SIPA) from NYC Department of Housing Preservation and Development (HPD) and Adam Verstandig from Jones Day.
The demand for affordable housing in New York City is extraordinary. Roughly 180,000 public housing units have an 8-year waiting list, 130,000 people are waitlisted for tenant-based voucher assistance, and 90,000 privately-owned project-based units also have waitlists. Even more extraordinary is the city’s efforts to support affordable housing. Bloomberg’s $7.5 billion plan to create 165,000 affordable housing units by 2014 is nothing less than the largest municipal affordable housing plan in the nation’s history. According to Anthony Richardson, the city is on pace to meet these goals and complete 15,000 units during 2011.
As the government continues to support affordable housing development, it comes as no surprise that more players are entering the industry. Fortunately, some of this added competition comes within the capital markets which directly benefits developers. Ashley Hartsook explained that companies such as Google and Goldman Sachs’ Urban Investment Group are providing equity for affordable housing development through the tax credit syndication market. Essentially, the tax credit investors provide equity for the deal, but instead of becoming a partner and receiving the benefits of real estate ownership, they receive benefits of reduced tax liability, usually for a specified amount of time (15 years for example).
Overall, the on-campus NYSAFAH event was a success. Students learned the intricacies of an often overlooked segment of the real estate industry and were able to speak at length after the program with leaders of the industry.
-by Brad Long