An unorthodox financing scheme that would pay for the city's planned 6,400-unit development in Queens West is an end run around federal mandates for affordable housing, an advocacy group is charging.
Project's financing plan ripped for lack of affordable housing in Queens West
The scheme, which is based on a model used for a project under construction in Hawaii, would allow the city to pay developers with federal tax-exempt bonds that are typically designated for construction by nonprofit entities, or 501(c)(3) bonds.
Normally, such bonds would go toward the construction of a facility such as a hospital or a YMCA.
By obtaining status as a legitimate nonprofit, or 501(c)(3), the city avoids dipping into its limited supply of tax-exempt municipal bonds that finance the administration's other affordable housing developments.
But the city also wriggles out of certain development restrictions: The federal government mandates every project funded with municipal bonds must include at least 20% of housing for low-income residents.
"There's a million people in Queens who make less than the income required for Queens West," [Pratt's Brad] Lander said.