Kingston committee reviews public mixed‑income development model to build permanent affordable housing

Joel (presenter) told the Unity Development and Housing Committee that the city is exploring a ‘‘public mixed‑income development’’ model intended to produce permanently affordable housing using local tools rather than federal or state subsidy.

The proposal would pair long‑term public ownership with low‑cost public debt and a revolving loan fund that would make construction financing available, Joel said. ‘‘There’s 3 ingredients, to make this model work. So number 1 ... long term public ownership ... Number 2, there’s low cost debt ... and third, there’s a revolving loan fund,’’ he said.

The model targets mixed‑income projects that include deeply affordable units alongside market‑rate units. Joel described an ‘‘ideal size’’ of about 100 units but said the model can scale to smaller projects and that each project would be mixed income. He said the affordability would be permanent and the design ‘‘will last for generations.’’ The presentation said a typical affordability target is roughly 20% of units at 50% AMI and another portion at or under 80% AMI; Joel said the 50% AMI floor is a ‘‘nonnegotiable.’’

Why it matters: Kingston speakers said the municipality has limited access to federal subsidy programs and that a local, recycling fund could support more predictable production. Joel said the model has gained attention after pilot work in Montgomery County, Md., and a NYU Furman Center brief, and that other jurisdictions are adapting the approach.

How it would work: Under the model the city would create a nonprofit entity (a local arm or subsidiary) that would in turn create a separate Housing Development Fund Corporation (HDFC) for each project to hold title. The public partner would typically assume majority ownership (Joel said public ownership normally exceeds 50%), with a selective private or nonprofit development partner responsible for construction and operations. The revolving loan fund would make low‑interest construction loans and be replenished as completed projects stabilize and repay initial financing.

Financing and tax treatment: Joel said jurisdictions that have used this model have used tax relief as part of the capital stack, but noted New York law limits HDFC tax exemptions to no more than 40 years. He said a full, permanent tax abatement like Montgomery County’s proposal is not required in Kingston’s financial models; instead, a shorter abatement (for example, to help initial stabilization for the first 10–20 years) would likely be the focus. Joel identified bonding as a likely mechanism to raise the initial fund and cited Chattanooga’s use of ARPA funds as an example of an alternative approach.

Market interest and next steps: The city issued a request for information and received six responses from potential developer partners, Joel said, noting five of the six had prior work in the state. He recommended forming the nonprofit arm that would oversee the revolving fund and creating project‑specific HDFCs. He asked the Common Council to adopt a tax‑exemption policy for HDFCs under this model and suggested the council pass a memorializing resolution of support; he said he would draft proposed language for the next meeting.

Committee discussion focused on governance, ownership shares, whether nonprofit partners should be included, the permanence of public ownership, and how projects would interface with state initiatives for permanently affordable housing. Joel said the model is intended to be ‘‘locally controlled’’ and to operate in parallel with any state programs that might form.

Ending: Committee members asked Joel to draft the resolution language and share it before the next meeting. Joel said there is no formal ask of the Common Council now beyond future votes on tax‑exemption policy and an eventual memorializing resolution once the nonprofit structure is ready.