2023 Spring Issue - 28

developments
Michael Zukerman: In terms of
affordable and attainable housing,
this has become a crisis. Every
mayor in every town is dealing
with an affordable housing crisis.
And at Greystone we believe this
requires a creative, 'all of the
above' approach. And we undertake
that all-of-the-above approach
as a lender, as a developer, and as
an owner.
In terms of the lending space,
" Bloomberg has forecast
ESG AUM to hit $3 trillion by
2025, or a third of global
assets. As capital searches for
deal flow, the development
of workforce and affordable
housing could check the
box for ESG as clearly as
sustainability and climate
resiliency work do
already today. "
-MATTHEW KWATINETZ,
DIRECTOR, NYU URBAN LAB
one of the areas that we've been
focusing on is the mixed-income
area, echoing some of what Lionel
mentioned, as well. The mixedincome
space provides for a
broader impact and that, coupled
with inclusionary zoning, enables
for more affordable housing in
areas that traditionally you may not
see it. We're providing a financing
solution for mixed-income housing
in Chicago, which dovetails
nicely with their Affordable Housing
Ordinance [AHO], as well as with
their tax abatement [incentive program]
to provide for mixed-income
development in a high-rent area
within the South Loop of Chicago.
Greystone has unique, proprietary
financing tools that enable creative
mixed-income solutions.
Hill: For efforts to be successful,
there has to be a positive
and enabling environment.
What positive factors have
you all seen in your efforts
delivering units that may cross
markets?
Buell: Amazon is new to the affordable
housing field, which means
we get to look at it with fresh eyes
and understand where a tool like
the Amazon Housing Equity Fund
is effective and where it's not. In
doing this work, we found that
having a strong local enabling environment
is critical to the success of
our efforts. This means we are more
successful where there is a supportive
local policy environment, a
range of financial tools-including
28
URBAN LAND
SPRING 2023
local housing funds-and strong
partners on the ground that can
actually create quality affordable
housing stock.
As an example, we're seeing that
in the Arlington, Virginia, region
there's almost three times as much
funding going into affordable housing
as there is even in a place like
the Puget Sound.
We're seeing a lot more local
governments creating affordable
housing trust funds, simplifying
their entitlement processes and/or
their tax assessments to encourage
more affordability. This is multiplying
affordable housing developers'
ability to actually do the good work
that they're doing. We are also
seeking investments in communities
where there is cofunding for
affordable housing because we're
seeing that it allows us to get to
deeper levels of affordability-
30 percent levels. Putting two and
two together, the enabling environment
coupled with multiple funding
options is critical to scaling
the impact of new partners like
us who want to do good in our
communities.
Matthew Kwatinetz: Cities
originally were the hubs of great
labor markets because they offered
housing opportunity that served
people and households at all levels
of income. The success of cities to
serve this function hinged upon the
ability to build densely.
But over the last few decades,
cities have limited density in their
central cores, leading to a vast
reduction in housing production
and a corresponding spike
in gentrification. This problem is
exacerbated by new labor entering
the market, creating a false choice
between affordability and jobs.
Vastly more production is needed
everywhere. For example, New York
City has on average produced over
10,000 affordable units annually,
but even at that production rate it
would take over 65 years just to
catch up to the existing backlog of
needed housing today.
As Lionel mentioned, solutions
will involve leveraging new sources
of capital. In particular, we must
harness the rising capital flows
into ESG [environment, social, and
governance factors] to develop
affordable housing while considering
more cross-subsidy options
such as diverse mixed-income
projects. In some critical areas,
cities are running out of volume
cap and therefore can't qualify for
LIHTC funding. That's a huge chilling
effect to actively developing
affordable housing. We need workarounds.
Lynch:
There are fund managers
like LISC Strategic Investments or
Enterprise Community Investment
who have a long track record in
being able to [leverage new sources
of capital], and those institutions
can be very agile. They can craft
both on a transaction-structuring
perspective, and also the way in
which they can aggregate a variety
of forms of capital or commitments
to go beyond this sense of, " we
have to rely upon new forms of
public programs. "
The sole vehicle [to build affordable
housing] has largely been
Low-Income Housing Tax Credits,
which by definition means that the
only individuals that can participate
are those that have tax capacity,
whereas, to the extent that you
have even pension funds-the
most savvy real estate investors-if
they're tax exempt, they haven't
been able to contribute to the ability
and the need to solve moderateincome
housing.
Or to the extent that you have
health care systems, they may be
the largest employers in their
region and their community, or
even in their state. They have
investable assets, they have balance
sheets, they have endowments,
and so forth. But again,
they're tax exempt.
2023 Spring Issue

Table of Contents for the Digital Edition of 2023 Spring Issue
