MTA issues RFP to build housing on its real estate

Bloomberg News

The New York Metropolitan Transportation Authority has issued a request for proposals to build hundreds of apartments on one of its properties. 

The agency is seeking to develop a Brooklyn lot that was once an MTA cable shop. The RFP is part of the agency's ongoing effort to monetize its properties across the state; it's also part of Gov. Kathy Hochul's directive that state agencies use state-owned sites to increase housing supply and affordability. 

The winning bidder will be able to build on the lot at 1119 Pacific Street and receive the air rights to build above the MTA's adjacent Franklin Avenue Shuttle subway line. The state hopes this development will result in approximately 300 housing units, including at least 75 permanently affordable units. Proposals are due in May. 

"By leveraging underutilized, state-owned land and making improvements to critical infrastructure, we will deliver the housing that New Yorkers need and deserve," Hochul said in a press release. 

The development is possible because of a rezoning plan for the Atlantic Avenue Mixed-Use District passed last year. The cable shop is being transferred from the state to New York City for development as affordable housing, according to the MTA. 

"It's a fact that transit-oriented development drives job and housing growth across the region," MTA CEO Janno Lieber said in the release. "The Pacific Street project checks all the boxes – unbeatable proximity to transit in one of Brooklyn's hottest neighborhoods."

The MTA has been leaning into transit-oriented development in recent years, according to CFO Jai Patel, seeking to leverage properties it owns in both New York City and by its Metro-North and Long Island Rail Road stations. The profit from the agreements is reinvested into system improvements. 

"In the past, we really haven't captured that value [of transit-oriented development] on our side, but I think we are, as a team, now working better with real estate," Patel said in an interview earlier with The Bond Buyer. The MTA's Construction and Development and Finance teams are "at the table and talking about it a little differently," she said.

"We get a ground lease. We get revenue from advertising, rentals, any of the parking. It's just all the different components that we can monetize, I'll say, and capture value when we do a TOD [deal]," Patel said. 

The MTA said it urges respondents to the RFP to incorporate New York's Zoning for Accessibility program in their proposals. The program incentivizes developers on properties adjacent to MTA stations to enter into public-private partnerships to build elevators and other accessibility improvements for the station. 

Hochul began a $25 billion, five-year housing plan in fiscal 2023, according to the press release, and has made further investments in affordable housing since. Her executive budget for fiscal 2027 would enact the fifth year of the five-year housing plan. The budget proposal also includes $250 million of capital funding "to accelerate the construction of thousands of new affordable homes," according to the release.