New York City faces an affordable housing crisis of staggering proportions. Vacancy rates hover around 1.4 percent. Families earning moderate incomes are priced out of entire neighborhoods. Yet in May 2025, when the Department of Housing Preservation and Development (HPD) announced it would stop processing most new applications for Section 610 of the Private Housing Finance Law, the city turned its back on a policy that was working.
Section 610, signed into law by Governor Kathy Hochul in December 2022, represented a rare moment of policy innovation that benefited everyone involved. The law allows owners of rent-stabilized affordable housing to collect the full amount of federal and local housing vouchers, even when that amount exceeds the building’s registered legal rent, without increasing what tenants pay. Tenants continue paying only 30 percent of their income toward rent. Building owners receive additional income to cover rising operating costs and building repairs. The government maximizes the value of its existing subsidy programs. It was an elegant policy design: preserving affordability while preventing the deterioration of the affordable housing stock we already have.
Then HPD pulled the plug, citing federal funding uncertainty. While maintaining that buildings with already-approved amendments can continue operating under Section 610, the agency announced it would no longer process new authorizations for most subsidy types, including crucial programs that serve the city’s most vulnerable residents: the City Fighting Homelessness and Eviction Prevention Supplement (CityFHEPS) and HIV/AIDS Service Administration (HASA).
This decision reflects a fundamental misunderstanding of what Section 610 accomplishes. The program doesn’t create new government obligations; it simply allows existing subsidy dollars to flow more efficiently to where they’re already committed. When a voucher holder moves into a Section 610 building, the city is already obligated to pay that subsidy. The difference lies in whether those dollars are allocated toward maintaining quality, affordable housing or are constrained by artificially low registered rents that leave buildings financially struggling.
Consider the reality facing affordable housing providers. Insurance costs have skyrocketed. Property taxes continue climbing. Labor and material costs for maintenance have surged. Meanwhile, developers who built affordable housing under regulatory agreements years ago are locked into rent caps that no longer reflect the economics of building operations. Some are collecting only 93 percent of rents compared to the 95 percent they underwrote, and those projections were considered conservative before 2020.
Without Section 610, these buildings face a slow death spiral. Insufficient cash flow means deferred maintenance. Deferred maintenance leads to building deterioration. Deterioration results in tenant displacement and the loss of affordable units from the city’s housing stock. We’ve seen this story play out countless times across the five boroughs.
Section 610 offered a lifeline. By allowing buildings to capture the full voucher amount, it provided the financial breathing room needed to maintain properties, make necessary repairs, and remain viable participants in affordable housing programs. This wasn’t a windfall for owners, but a survival mechanism for the affordable housing ecosystem.
HPD’s justification, federal funding uncertainty, rings hollow. The federal voucher programs that Section 610 leverages are not new appropriations. These are existing commitments. If HPD is concerned about budget constraints, the solution is to prioritize which buildings receive Section 610 authorization based on demonstrated need, not to shut down the program entirely for new applicants.
Moreover, the timing couldn’t be worse. New York is in the midst of implementing its most ambitious housing agenda in decades. The City of Yes for Housing Opportunity aims to create new homes across all neighborhoods. The 485-x tax incentive is designed to stimulate affordable housing construction. Yet what good are new affordable units if we’re simultaneously allowing our existing affordable stock to deteriorate through bureaucratic paralysis?
The policy’s design already includes safeguards. Regulatory agencies assess project financials to prioritize buildings with the greatest need. The program requires that rent stabilization protections remain in place. If a tenant loses their voucher, rents must drop back to the legal regulated amount. These provisions ensure that Section 610 serves its intended purpose: preservation of affordability, not profit maximization.
HPD claims it will continue processing authorizations for NYCHA tenant- and project-based vouchers and Emergency Housing Vouchers. But this carve-out is insufficient. CityFHEPS and FHEPS serve thousands of New Yorkers, including families with children and individuals experiencing homelessness. HASA vouchers support people living with HIV/AIDS. Excluding these programs from Section 610 means the buildings that serve our most vulnerable residents are precisely the ones left without financial support.
What HPD calls uncertainty, housing providers call existential threat. Affordable housing developers who planned projects around the availability of Section 610 now face financing gaps. Buildings that were in the application pipeline when the pause was announced are stuck in limbo—unable to move forward, unable to plan, slowly hemorrhaging money while waiting for bureaucratic clarity that may never come.
The city should reverse course. HPD should immediately reopen Section 610 applications with appropriate prioritization criteria based on demonstrated financial need. If federal budget constraints genuinely require limiting the program’s scope, then create a transparent waitlist and approval process rather than an arbitrary shutdown. Work with the state legislature to expand and formalize Section 610’s provisions.
Most importantly, recognize that preserving existing affordable housing is just as critical as building new units, and often more cost-effective. Every dollar spent propping up struggling affordable buildings through Section 610 saves the much larger investment that would be required to replace those units once they’re lost.
New York cannot afford to let bureaucratic caution and budgetary pessimism undermine smart housing policy. Section 610 works. It should be expanded, not abandoned. The affordable housing crisis demands bold action, not timid retreat. HPD should open the doors to both Section 610 applications and the affordable housing future New York desperately needs.
Jonathan Petak
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