"Mandatory Inclusionary Housing: Implications of 421-a and Vested Rights"

Since taking office in 2014, the signature policy initiative of the de Blasio Administration has been to create and maintain permanently affordable housing in the City of New York.  The centerpiece of this initiative is the text amendment to the Zoning Resolution known as “Mandatory Inclusionary Housing” or “MIH,” which the City Council adopted yesterday.  MIH seeks to spur the production of affordable housing by making it mandatory under certain circumstances.

As discussed in previous Stroock Special Bulletins on the topic, requiring that a certain percentage of residential development be affordable is not a novel housing policy concept, and several jurisdictions, including San Francisco, California and Cambridge, Massachusetts, have adopted similar programs (although most experts consider New York City’s MIH to be the most ambitious program of its kind in the United States).  As with most major policy changes in New York City, the Mayor’s proposal was not adopted wholesale by the City Council, but rather was modified and negotiated among the Department of City Planning (“DCP”), the Department of Housing Preservation and Development (“HPD”), the City Council and various other stakeholders. MIH’s passage is a major victory for the de Blasio Administration. 

The new affordability requirements are summarized in this article.  Also discussed are two critical issues with respect to MIH – the expiration of the 421-a tax exemption under New York State law and the doctrine of vested rights.

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