Since 2012, Empire State Future has worked with a coalition seeking to correct elements of Federal housing policy that restricts funding for mixed use projects. FHA, HUD, Fannie Mae and Freddie Mac programs limit loans, loan insurance and mortgages to projects with less than 20-25% commercial use. Thus, for a project to “conform” to the programs, buildings with ground floor commercial or non-profit space need four or five floors. We believe this links to disinvestment in many downtown and older suburban areas.

Many groups support changing the provisions. Congress for New Urbanism (CNU) has led this topic nationally as has the Regional Plan Association (RPA). The National Association of Realtors, National Association of Home Builders, Urban Land Institute, Smart Growth America and others are supportive. Another leader of this work is Richard Oram with the Oram Foundation.

HUD recently proposed new regulations to liberalize the restrictions, somewhat. The 25% limitations would remain but “waivers” could be issued. We think getting waivers will be complex and have limited impact. As HUD carefully considers input they get from localities, we ask you to submit comments on this issue. HUD program changes could lead to changing the larger programs. Comments are required by May 10th (changed from 4/30). Would you consider sending the attached letter? A draft letter is below to assist you. A few sentences regarding from you, your organization or your town will increase your letter’s impact.
Attached also is a background packet. The American Conservative article is especially interesting. Low-cost financing for mixed use development is vital. That financing is restricted for older downtowns and suburbs, and newer areas featuring mixed use and walkability, should change. Please join our efforts and send comments by May 10. Thanks for your attention to this.

Peter B. Fleischer
Executive Director
Empire State Future
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Please submit to [email protected], or by mail

(date)

Office of Multifamily Production

U.S. Department of Housing and Urban Development

451 7th St., S.W.

Washington, DC 20410

To whom it concerns:

This letter comments on an important element of the proposed revisions to the Multifamily Accelerated Processing (MAP) Guide released in February. (City/Town) faces development opportunities and issues that revisions to the MAP Guide could assist, and our economic and social goals for many years.

(please insert your paragraph reflecting specifics; here is an example:

With considerable effort, we developed new plans for revitalizing (town name). That mixed use projects in walkable areas are now preferred by the market is a welcomed change. Our plan pursues commercial revitalization and housing for families, seniors, and young people with various income levels; that is, we seek to develop whole communities with qualities most in demand. New project and renovation plans will be harder to implement without readily available financing. Some local banks loan for projects at the scale we desire, mostly three and four story buildings, but that financing is limited and expensive. This is partly due to commercial space limitations in the federal housing programs.

That the MAP Guide has a waiver process that may allow more mixed use could help, but an exception-based process will entail uncertainty, delays and added cost. We suggest that the commercial limits be raised to 35% so that buildings with three floors could participate. Perhaps different requirements for projects above 25 percent commercial are viable, as the added certainty that would provide will be preferable to waivers.

That would-be owners cannot get conforming mortgages burdens those seeking to move to denser areas. That middle income housing is limited by the commercial restrictions is also unfortunate. Changes to the MAP Guide are timely and could help solve development and housing programs in many cities. Thank you for considering these views.

(Signed)

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