The Low-Income Housing Tax Credit (LIHTC) is the largest federal subsidy for affordable housing in the United States, and New York is one of the most active LIHTC markets. NYC developers use both 9% credits (allocated competitively through New York State Homes and Community Renewal) and 4% credits (paired with tax-exempt bonds) to finance rent-restricted multifamily projects.
9% Credits vs 4% Credits
The 9% credit is competitively allocated and produces ~70% of eligible basis in tax credit equity — making it the deeper subsidy. The 4% credit is "non-competitive" (allocated when paired with at least 50% tax-exempt private activity bonds) and produces ~30% of basis. The 4% structure is preferred for larger NYC projects because it doesn't face the 9% allocation cap.
Qualified Allocation Plan (QAP)
New York's QAP prioritizes deep affordability, geographic diversity, integration with services, energy efficiency (Passive House preferred), and developer track record. NYC HPD also has its own term sheets that layer on top of NYS HCR — Extremely Low and Low Income Affordability (ELLA), Mixed Income, Senior Affordable Rental Apartments (SARA), and the Mix and Match programs are all LIHTC-compatible.
Intersection with 467-m Office Conversions
The 467-m office-to-residential conversion abatement requires a minimum 25% affordable unit set-aside. Several conversion projects layer LIHTC equity on the affordable component while leveraging 467-m for the market-rate units — stacking the structures meaningfully improves yield. Skyline brokered the $135M sale of 6 East 43rd Street to Vanbarton Group, which is converting under 467-m with 111 of 441 units permanently affordable (~25%).
- Engage LIHTC counsel before you commit to a site — eligible basis rules disqualify certain land and acquisition costs.
- For 4% bonds, coordinate with NYC HDC or NYS HCR early; bond cap allocations are first-come for non-priority projects.
- AMI thresholds shift annually — model the project against the latest HUD-published AMI for NYC HMFA.
- Skyline maintains relationships with active LIHTC syndicators and senior lenders in NYC affordable housing.
Skyline Properties advises principals on the intersection of office-to-residential conversion, LIHTC, and NYC affordable housing programs. Robert Khodadadian has closed $976M+ in NYC commercial real estate and works with developers structuring 467-m + LIHTC stacked conversions. Email info@skylineprp.com or call (212) 537-9239.