Pilot will transform vacant units and stalled construction sites into affordable housing opportunities for working families
City Hall – Speaker Christine C. Quinn and Mayor Michael R. Bloomberg today announced a $20 million commitment to fund a pilot program that will turn unsold condominiums, market-rate rental buildings and stalled construction sites into affordable housing opportunities for moderate and middle-income families. The pilot could covert as many as 400 units into affordable housing over the next year.
They were joined by Land Use Committee Chair Melinda Katz, Housing and Buildings Committee Chair Erik Martin-Dilan, NYC Department of Housing Preservation and Development (HPD) Commissioner Rafael E. Cestero and Affordable Housing Taskforce Co-chairs Felice Michetti and Maxine Griffith.
First announced in Speaker Quinn’s State of the City Address, the Housing Asset Renewal Program (HARP) will capitalize on the building bust by working with developers and banks to lower the cost of selected projects to below market rates.
“The economic crisis has forced everyone to look for new and innovative solutions to age old problems,” said Speaker Christine C. Quinn. “The credit crunch has left buildings across our city empty, just waiting for someone to call them home. And now, because of the Housing Asset Renewal Program, these units represent our best chance to confront the housing crisis head on.”
“Private developments that sit vacant or unfinished could have a destabilizing effect on our neighborhoods, but we’re not about to let that happen,” said Mayor Bloomberg. “This program holds out the promise of addressing the unintended blight caused by vacant sites, while transforming what would have been market-rate buildings into affordable housing for working class New Yorkers.”
The program will focus on two types of problematic developments: completed projects with a high number of vacancies and stalled sites that are still under construction. Projects will be selected based on 3 goals:
Neighborhood Stabilization – Priority will be given to buildings in neighborhoods that will have the greatest impact on keeping communities stable;
Efficient Use of Public Funding – Preference will be given to projects that need the lowest amount of public assistance to achieve maximum affordability;
Deep Discounts to New Yorkers – Projects will be selected based on which developers and banks offer the deepest discounts below market rates on prospective units.
Working with developers who respond to the Notice of Funding Availability (NOFA), the City will look to maximize the affordability of prospective units by selecting projects that fall in line with the outlined criteria. The City will not own the units; rather, it will provide financing and work with current owners of the building to negotiate the lowest possible price.
“It appears as though the housing crisis won’t subside any time soon due to the economic downturn,” said Housing and Buildings Committee Chair Erik Martin Dilan. “If anything, we need to come up with the right plan right now. HARP is a great step forward in turning the current recession into an affordable housing opportunity for working families.”
“At this time in history it is incumbent upon the government to look at all options to create affordable housing in our City,” said Land Use Committee Chair Melinda Katz. “The Housing Asset Renewal Program will be another tool at our disposal to continue our efforts to add affordable units citywide. The program will allow additional affordable units to be available where there are none today. Everyone would agree that a completed affordable project is a better investment for our city then a skyline of half finished projects.”
Additional details of the program will be announced later in the summer.
“In this tight economy, it is imperative that we seize every new market opportunity that arises,” said HPD Commissioner Rafael E. Cestero. “This program gives us an opportunity to stabilize neighborhoods that have been most affected by the economic downturn while giving us fresh opportunities to create affordable housing. We at HPD appreciate the leadership shown by Speaker Quinn, Housing Chair Dilan and Land Use Chair Katz and look forward to strengthening this productive relationship for the benefit of our City.”
“This pilot program is prudently structured to efficiently capture affordability in housing assets that would otherwise languish in the marketplace, said Marc Jahr, President of the NYC Housing Development. “In designing the program, we carefully considered the implications of stepping into developments that the market had effectively stepped away from. We concluded that in this tough real estate market there are great, cost-efficient opportunities to create affordable housing for New York’s residents, while stabilizing neighborhoods.”
“There are real challenges facing New York City when it comes to affordable housing,” said former HPD Commissioner Felice Michetti. “While there will never be a single solution, the Housing Asset Renewal Program is one part of the brick-by-brick effort to keep our City affordable for working class New Yorkers.”
“Even in an economic downturn, we need to address the critically important challenge of creating affordable housing,” said former HUD Assistant Deputy Secretary Maxine Griffith.
“The Housing Asset Renewal Program is one innovative and resourceful way to tap into our existing housing infrastructure in a way that will stabilize communities and our local economy.”
A NOFA to target properties for the new program will be issued in late July.