New York

THE search to find shelter for New York City's growing homeless population has led local officials to luxury rental buildings.

Developers who get tax breaks to build towers with yoga rooms and billiard tables, in exchange for designating some units as affordable, will now be required to fill those apartments with shelter residents if they fail to find tenants through an affordable-housing lottery.

The rule applies to about 200 units that were vacant as of last Friday, according to the city's Department of Housing Preservation & Development.

"This administration is identifying new and creative ways to combat homelessness," said Matthew Creegan, a spokesman for the department. "We saw an opportunity to provide high-quality permanent housing to some of our homeless neighbours, and we are seizing it."

Placements in some buildings could begin as early as this week. They will be limited to families in shelters who can live independently - not the homeless who need extra social services or support, Mr Creegan said. Their rents will be paid to the developer by the city.

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The rules will largely affect buildings where the affordable units are designated for middle-income tenants - from single people who earn as much as US$97,110 to families of three with a combined income of US$124,930, according to city guidelines.

This includes Essex Crossing on Manhattan's Lower East Side, where one-bedroom apartments are available for US$1,912 and US$2,717, depending on an applicant's income.

At The Dime, a tower in Brooklyn's Williamsburg neighbourhood with a basketball court and a bar, there are 19 studios in the building that will be rented for US$2,116 a month, and 24 one-bedrooms for US$2,270, according to its lottery advertisement.

The developers at The Dime have received 12,500 applications for a total of 54 units, according to a spokeswoman.

"The developers believe that given the number of applications, there will be more than enough qualified candidates to fill the 54 apartments," she said in a statement.

Affordable rentals for middle-income residents are only slightly below market rate, making them a popular choice for developers who opt in to the tax-exemption programme, said Jordan Bardach, chief operating officer at City5, a consulting firm that helps developers comply with housing programmes.

But prospective tenants often do not realise they qualify, and when they do, may not want to endure a lengthy lottery and income-verification process for apartments that only come at a slight discount. That sometimes leaves units vacant after the lottery is over.

Under the old rules, developers could widen their search and find qualifying tenants for those apartments by posting on standard rental sites and with brokerages, Mr Bardach noted.

With the change allowing homeless placements, "some developers might pull out of the programme completely", he added. "The developers who agreed to enter their property into a lottery process, this is not what they were signing up for." BLOOMBERG