News Alert: March 29
New York State 2012-13 Budget - Affordable Housing Highlights
Governor Andrew Cuomo and the Legislature have reached a three way agreement on the FY2012-13 State Budget and the Legislature is poised to pass the final parts of the plan within the next few hours. The new fiscal year begins April 1. The housing part of the Budget is very favorable to supportive housing and the popular nonprofit networks known as the Neighborhood and Rural Preservation Companies. The affordable housing program highlights are below.
Local Assistance Funding for Affordable Housing:
The final Budget will more than restore full funding to the community based nonprofit organizations under the Neighborhood Preservation Companies program (NPCs) and Rural Preservation Companies program (RPCs). According to the Budget, NPCs will be funded at $10.072 million - this includes a restoration of the $8.479 million cut that had been proposed plus an additional $1.593 million over 2011's funding level. The RPCs will be funded at $4.204 million - this includes a restoration of the $3.539 million cut that had been proposed plus an additional $665,000 over 2011's funding level. This is the first increase in funding in five years for these two programs.
• The Budget will increase funding for the Rural Rental Assistance Program (RRAP) which provides State funded rental subsidies to approximately 4,700 low income occupants of rural housing projects partially financed by the US Department of Agriculture. The program will receive an additional $4.798 million under the new Budget bringing the total appropriation to $19.6 million.
• The Budget includes an agreement to continue to assist homeowners through the Subprime Foreclosure Prevention Program. The Budget provides $9 million for the continuation of mortgage foreclosure counseling services to be administered by NYS Homes and Community Renewal over the next 6 months until proceeds from the National Mortgage Servicing Settlement Agreement are realized. At that time, additional services will be financed with proceeds from the Settlement Agreement under the administration of the State Attorney General's office.
Supportive Housing Programs:
• Medicaid Redesign Team (MRT) Supportive Housing Development Program - The Budget includes $60 million for the MRT Supportive Housing Fund. Following the recommendations of the MRT, the budget establishes and funds a new Supportive Housing Development Program that will provide service funding, rent subsidies and capital dollars to create supportive housing for high-cost Medicaid recipients. The new fund will be funded with $60 million of State general funds this year, and $75 million of State general funds in each of the following two years, with funding originating in the NYS Department of Health, to be distributed to HCR, OTDA, OMH, OASAS, OPWDD and the DOH AIDS Institute. It also allows the fund to grow to $150 million annually if the State can convince the federal Center for Medicaid and Medicare Services to provide matching funds.
• The State's draft spending plan envisions approximately one-third of this year's fund going to scattered-site rental and service subsidies, another third going to capital development of supportive housing units at NYS Homes and Community Renewal, and as much as $14.5 million to OTDA Homeless Housing Assistance Program (HHAP) for upstate projects, with the rest going to specific projects including $7 million to provide capital funding for the development of community-based permanent housing for residents of Goldwater/Coler Hospital. Further details will follow in the coming weeks.
• Community Reinvestment in Supportive Housing - In addition to the $60 million in funding this year, the budget authorizes a new, ongoing community reinvestment vehicle, the Supportive Housing Development Reinvestment Program. This new program will redirect savings achieved by closing nursing home and hospital beds to build and operate new supportive housing in the community for high-cost Medicaid recipients.
• NYS Supportive Housing Program (NYSSHP) & NYS Solutions to End Homelessness Program (STEHP) - The budget also increases funding for NYSSHP and STEHP by $1.5 million each, a total of $3 million in additional funding to the Homeless Housing and Prevention Services Program.
Capital Budget for Affordable Housing:
The Budget calls for the expansion of the State Low Income Housing Tax Credit Program. The Division of Housing and Community Renewal is authorized to allocate an additional $8 million annually in each of the next two years in aggregate credit awards to taxpayers who develop qualifying housing projects for low-income New Yorkers. Credits are given in equal installments for a ten-year period.
• The Budget also calls for $32.2 million for the Low-Income Housing Trust Fund Program - same as 2011, which provides grants of up to $125,000 per unit to construct or renovate low-income apartment projects.
• The Budget includes $25 million for the Affordable Home Ownership Development Program - same as 2011, which provides grants of up to $40,000 per unit to construct or renovate homes for low and moderate- income families.
• The Budget includes $6.4 million for the Public Housing Modernization Program - same as 2011, which subsidizes repairs at 74 State-supervised public housing projects across the State. A total of $400,000 will be reserved for capital activities aimed at reducing illegal drug activities at these projects.
• The Budget includes $7 million for the Homes for Working Families Program - same as 2011, which combines State funds with other available public and private sector moneys, Federal Low Income Tax Credit proceeds and non-State supported bond funds to construct affordable rental housing for low- and moderate-income households.
• The plan calls for $400,000 for the Housing Opportunities for the Elderly Program (also known as RESTORE) - same as 2011, which provides grants to low-income elderly homeowners for emergency home repairs.
• The Budget includes $1 million for the Access to Home Program - same as 2011, which provides funding for home adaptations for individuals with disabilities to enable them to continue to live in their own residences and avoid institutional care.
• The New York Main Street Program, which provides financial resources and technical assistance to communities to revitalize historic downtowns, mixed-use neighborhoods, commercial districts and village centers was increased by $3 million, to $5.2 million.
• The Budget also funds two programs that have been in existence for many years, but infrequently funded; the Urban Initiatives and the Rural Area Revitalization programs will each be funded at $4 million this year. Both are administered by NYS Homes and Community Renewal.
News Alert: March 28
Morgan Stanley and ANHD Launch Community Development Fellowship Program
Morgan Stanley is launching the Morgan Stanley New York City Community Development Fellowship Program, in partnership with The Association for Neighborhood and Housing Development (ANHD). Eight nonprofit community development corporations will partner with eight graduate students from New York City’s finest urban planning, community development and public administration programs for an academic year. The fellows will assist the community development organization in the planning and initiating of "high-impact community projects that these groups would not otherwise have the capacity to commence."
News Alert: March 28
City Council to Vote on Wage Bill
The New York City Council is voting on a bill that would guarantee $22.65 per hour in wages for workers at buildings receiving city subsidies of more than $1 million and to large buildings where the city leases more than half the space. The bill would apply to cleaners, porters and other building workers. at some developments that benefit from city funds would be paid the prevailing wage established for their job classification by the city comptroller. The wage minimum rule would only apply to future deals.
News Alert: March 26
HUD Releases Updated 2012 Population Estimates
Novoco.com reports that the Internal Revenue Service (IRS) has released "its 2012 Calendar Year Resident Population Estimates, which are used to determine states' 2012 low-income housing tax credit (LIHTC) ceilings and tax-exempt private activity bond caps. Each state's LIHTC ceiling in 2012 is equal to the greater of $2.20 multiplied by the state population or $2,525,000; a state's tax-exempt bond volume cap will be the greater of $95 multiplied by the state population or $284,560,000."
News Alert: March 21
HPD At-Risk List Almost Doubles in Second Year
The New York City Department of Housing Preservation and Development has announced that 95 buildings have been added to its At-Risk List in the second year of its Proactive Preservative Initiative. The program is designed to proactively target at-risk housing stock and guide its management towards compliance with housing code regulations. The owners of these buildings have 45 days to show substantial improvement in the conditions of their properties.
This figure is a 193% increase over the program's inaugural year in which 49 buildings were added to the list. Eighteen buildings from the initial list have reduced their violations by more than 80 percent and removed. 85 percent of the buildings that remain on the list from the first year have averaged a 56 percent drop in violations.
News Alert: March 20
The New York Affordable Housing Preservation Fund Releases Progress Report
The New York Affordable Housing Preservation Fund, a $100 million joint venture created by Citi Community Capital and L+M Development Partners, has facilitated the preservation and rehabilitation of over 1,400 units since its inception in August 2010, putting it ahead of its original goal of preserving 2,000 units.
The NYAH Preservation Fund "focuses on properties that are at immediate or longer term risk of becoming unaffordable to low- and moderate-income households and which may be in serious physical or financial distress."
News Alert: March 19
HUD Unclogs Section 232 Queue
Senior Housing News reports that the backlog of applications for the Department of Housing and Urban Development's (HUD) Section 232 program has been substantially reduced. The number of pending applications at the end of February stood at 119 compared to 300 at the end of September 2011. The seventy-four commitments issued in February outpaced that in September 2011 by almost 75%.
Section 232 is an FHA-Insured loan product that covers housing for the frail elderly - those in need of supportive services. Nursing homes, assisted living facilities, and board and care are all examples of this type of housing (a project may include more than one type). Section 232 may be used to finance the purchase, refinance, new construction, or substantial rehabilitation of a project. A combination of these uses is acceptable - e.g. refinance of a nursing home coupled with new construction of an assisted living facility.
News Alert: March 19
Williamsburg Multifamily Project Closes on $50M Loan
A $100 million project in Williamsburg is slated to proceed after the developers - LCOR - closed on a $50 million construction loan. The site is two blocks from McCarren Park. SLCE Architects designed the 234-unit building that will include studio, one- and two-bedroom units that will range from 500-1,000 square feet.
News Alert: March 18
City Council Funds NYCHA Resident Work Initiative
The New York City Housing Authority announced that it has received $10 million from the City Council to fund an initiative that hires public housing residents to perform building repairs. This effort was launched in June 2011 to ameliorate a maintenance backlog concerning NYCHA’s housing stock.
It is estimated that the $10 million from the City Council will help NYCHA fill an additional 116,000 work orders annually and create 176 new jobs for NYCHA residents. NYCHA anticipates that half of the positions will be filled by graduates of the NYCHA Resident Training Academy (NRTA) and half will be filled by current residents working at NYCHA.
News Alert: March 17
Multifamily Risk Premium Elicits Caution
HousingFinance.com has posted an article discussing future adjustments to cap rates in light of "artificially low" interest rates and an expected shift from rental demand to homebuying in the next several years.
News Alert: March 16
Federal Home Loan Bank of New York Expands Membership
Marketwatch.com reports that the Federal Home Loan Bank of New York (FHLBNY) has granted membership to Asian Americans For Equality Community Development Fund, Inc. (AAFE). "The non-profit organization has the ability to use its FHLBNY membership and the FHLBNY's Community Investment Programs to increase its lending capacity in the low- to moderate-income immigrant and minority communities it serves. Additionally, the liquidity provided by the FHLBNY can help AAFE expand its range of low-interest homeownership loan programs that assist its clients in purchasing or renovating their first home."
AAFE represents the sixth Community Development Financial Institution (CDFI) to be added to the FHLBNY membership ranks. CDFIs are broken into four major categories, which are federally insured community development banks, credit unions, loan funds, and venture capital funds that focus on communities underserved by traditional financial institutions.
News Alert: March 15
Strong Cities, Strong Communities Program Made Official
President Obama signed an executive order on March 15 converting the Strong Cities, Strong Commuities pilot program into an official White House Council. The pilot program focussed on six cities: Chester, PA; Cleveland/Youngstown, OH; Detroit, MI; Fresno, CA; Memphis, TN; and New Orleans, LA.
The interagency Council will include 19 federal agencies which "will recommend policies to the President for building local expertise in strengthening local economies and changing Federal policies and programs to address issues to strengthen local capacity and spur economic growth."
News Alert: March 14
HUD Announces $25M to Fund Multifamily-to-Assisted-Living Conversions
The U.S. Department of Housing and Urban Development is offering $25 million in grant money to help convert multifamily apartment complexes into assisted living facilities or service-enriched housing for low-income senior citizens.
The maximum amount of each award is $5 million.
News Alert: March 13
L+M Development Breaks Ground on Yonkers Project
Construction has started on Warburton Lofts, a $10 million mixed-use historic restoration of loft-style rental apartments. The project is a partnership between L+M Development Partners Inc. (L+M) and the Yonkers Industrial Development Agency (IDA) and will provide 10 loft-style apartments over 9,000 square feet of retail with historic storefronts. The apartments will be priced for households making 80% of AMI.
Funding sources for the project include:
• $2.7 million in New Markets tax Credit equity from Citi Community Capital/ Greenline Ventures LLC
• $1 million of U.S. Department of Housing and Urban Development (HUD) HOME funds from the City of Yonkers
• $2.9 million of Empire State Development Corporation RESTORE NY funds from the City of Yonkers
• $3.4 million in private financing, including $1.8 million from L+M Development Partners
News Alert: March 12
Bloomberg Housing Plan Bypasses Washington Heights
The Daily News reports of the 11,627 affordable units built in Manhattan during Mayor Bloomberg's affordable housing program, only 139 have been built in Washington Heights. The neighborhood also lags behind other uptown Manhattan neighborhoods when it comes to affordable housing unit preservation - 1,363 units compared to 7,582 in central Harlem and 5,970 in East Harlem.
News Alert: March 12
HCR Teams with DOE on Weatherization Conferences
NYS Homes and Community Renewal (HCR) and the U.S. Department of Energy (DOE) have announced two co-sponsored New York State Weatherization Plus Health Conferences. One will be held March 19-20 in New York City and another March 22-23 in Syracuse. HCR and DOE are collaborating with the NYC Department of Health & Mental Hygiene and the NYC Department of Housing Preservation and Development.
This conference provides an opportunity for housing, health and energy organizations to share ideas and to begin to form creative public/private partnerships that can have a real impact on the New York State communities.
News Alert: March 12
HUD Tests Multi-Family Energy-Saving Program
The Department of Housing and Urban Development announced a $23.5 million pilot program designed "to develop ideas and mechanisms that could potentially be replicated nationally, as well as help create industry standards in the home energy efficiency retrofit market" that will help owners of older apartment buildings to reduce energy costs.
Four organizations which operate in the New York market received over $11.4 million in program funding:
News Alert: March 9
Affordable Housing Funding House Bill Introduced
Novogradac & Co. reports:
Rep. Joe Baca, D-Calif., on Tuesday introduced H.R. 4144, the Strengthening Economic Development Through Affordable Housing Act. H.R. 4144 makes community housing development organizations eligible to receive direct funding from the State Small Business Credit Initiative (SBCI) funds for affordable housing development. The SBCI would provide not-for-profit agencies and community development corporations (CDCs) with access to funds necessary to improve blighted areas and spur economic development. The act amends Section 3003 of the State Small Business Credit Initiative Act of 2010. The bill was referred to the House Committee on Financial Services.
News Alert: March 8
Affordable Housing Firm Purchases Four Overleveraged Buildings
The Wall Street Journal reports that MHANY Management has taken over the distressed mortgages for four rental buildings in building through the New York City Acquisition Fund. The Fund "was created to give developers interested in developing affordable housing assistance in acquiring property while they assemble permanent financing for a project."
The buildings, comprised of 29 affordable apartments, were purchased using a $1.35 million loan provided by the Fund. Three of the four buildings have been placed in the Alternative Enforcement Program due to excessive housing violations and deficient maintenance.
"As of a couple of years ago, at least 1,300 multifamily buildings in New York City were either overmortgaged or in foreclosure, according to the Citizens Housing & Planning Council. In a recent study, the council, a nonprofit research organization, also found that foreclosures had a harmful ripple effect and housing-code violations spiked in nearby buildings."
News Alert: March 8
Sen. Snowe's Departure to Impact LIHTC Industry
HousingFinance.com offers a story on Sen. Snowe's history of support of the LIHTC program and the concerns surrounding her recently announced retirement from the Senate at the end of this year.
News Alert: March 5
Congress Pushed on Tax Credit Bill
Novogradac & Company reports that members of Congress have been sent a letter urging them to support H.R. 3661, which would make permanent the fixed floor rate for 9 percent low-income housing tax credits that was enacted as part of the Housing and Economic Recovery Act.
The letter from Reps. Patrick Tiberi, R-Ohio, and Richard Neal, D-Mass., argues that developers will have to assume an 18 percent reduction in the amount of investor equity that they will be able to access as the 9 percent fixed floor expires. The representatives also describe the cost of the 2008 legislation as minimal.
News Alert: March 4
Stalled LIC Site Possible HPD Target
The New York Daily News has a story about a stalled construction project on Vernon Boulevard in Long Island City. The former site of an oil refinery, site remediation was expected to include "clearing 150,000 tons of contaminated soil and treating 97 million gallons of water."
The property has fallen into foreclosure but an HPD spokesman is quoted as saying that the city agency might be willing to “discuss options with the current owner if they were interested in putting together a viable affordable housing plan.”
News Alert: March 2
Jonathan Rose and Citi Team Up on $75M Housing Fund
SustainableBusiness.com reports that Citi Community Capital and Rose Investments, a division of Jonthan Rose Companies, have partnered to create a $75 million fund to finance multifamily green affordable housing. The fund will focus on creating housing in high-demand, mass-transit accessible locations along the east coast, primarily in Connecticut, New Jersey and the Washington, D.C. metro area.
The development projects will be in the range of $25-$50 million of total capitalization, "with a special focus on Section 8, Low-Income Housing Tax Credits and expiring use assets in need of renovation."
News Alert: March 1
Rochester Housing Group Receives $1.1M in Funding
The Rochester Business Journal reports that he Greater Rochester Housing Partnership has received $1.1 million to acquire and rehabilitate 50 vacant, single-family homes in Rochester.
"The New York State Affordable Housing Corp. funding will be used for the housing partnership’s Home Rochester Program, which rehabs foreclosed city properties and sells them to low-income, long-term, owner-occupants, the partnership said Wednesday."
News Alert: March 1
Center for American Progress Pushes for Housing Bond Program
NCSHA.org reports that the Center for American Progress (CAP) is calling for a bond program patterned after the Build America Bond (BAB) program. The proposed program would allow HFAs to "choose to use some of their private activity bond cap to issue taxable bonds and receive a direct subsidy from the federal government to cover a portion of the HFA’s bond interest costs."
In its paper titled "A House America Bond for State Housing Finance Agencies", CAP argues:
Since their creation housing finance agencies have financed the construction of nearly 1 million affordable rental units and approximately 4 million affordable mortgages for low- and moderate-income households. Yet over the past several years, many of them have struggled to raise funds from their traditional source of capital—the tax-exempt bond market—at affordable rates and long maturities to finance their mortgage programs. This has made it more difficult for them to provide affordable mortgages for low- and moderate-income households where the lack of mortgage credit is greatest.
News Alert: March 1
HPD's Doug Apple Leaving for Samaritan Village
HPD Commissioner Mathew Wambua announced yesterday that First Deputy Commissioner Doug Apple will be leaving HPD at the end of March to become Executive Vice President and Chief Operating Officer of Samaritan Village. The move allows Doug to team again with Tino Hernandez who serves as President of Samaritan Village, a leading addiction rehabilitation service provider. Doug has dedicated more than 26 years to public service including two-and-a-half years at HPD and eight years at NYCHA. In making the announcement, Commissioner Wambua said that Doug “helped HPD hone its focus, leading the way through our reorganization, while building strengthening and supporting our really extraordinary leadership team. The decisive, determined teamwork that launched HPD’s new Asset Management function and Proactive Preservation Initiative, and which re-energized our Section 8 program and technology division, testifies to the strength of Doug’s style and energy.”
Best wishes to Doug Apple on behalf of the Board of Directors of the New York Housing Conference. We will miss you.