Affordability Preserved on New York City Apartments
Photo: The Paul Robeson Houses in Harlem, which features 81 project-based Sec. 8 units, is among the properties being preserved by LIHC Investment Group.
Source: Affordable Housing Finance
New 40-year agreements prevent 669 Sec. 8 units from converting to market-rate housing.
New York, NY (August 17, 2018)—
More than 650 affordable housing units in New York City have been preserved for decades to come under a deal by LIHC Investment Group and local officials.
Located in neighborhoods where many similar buildings have converted to market-rate homes, the six properties feature 669 units of project-based Sec. 8 housing. The apartments will be preserved through tax abatements under Article XI and new 40-year regulatory agreements with the city.
The agreements were reached through Mayor Bill de Blasio’s Housing New York Plan, which outlines commitments to protect affordable housing and has created policies and programs intended to fight displacement. Article XI provides complete or partial exemption from local real estate taxes for up to 40 years.
“This deal will preserve existing affordable housing in neighborhoods where it is under the greatest threat, and we are proud to provide residents with an improved living environment, stable housing, and peace of mind far into the future,” said Andrew Gendron, a principal at LIHC Investment Group. “In the near term, we plan to secure Article XIs for nine additional properties under our ownership, bringing the total number of units preserved to more than 1,850.”
His firm worked the city Department of Housing Preservation and Development (HPD) and city Housing Development Corp. (HDC). LIHC Investment Group says it plans to make improvements at the properties involved:
- La Cabana Houses is located at 391 Lorimer St. in Williamsburg, Brooklyn, and contains 167 project-based Sec. 8 units. All units will be maintained as affordable to tenants whose annual income does not exceed 50% of the area median income (AMI). LIHC and its partners plan to complete more than $7 million in capital improvements over time at the property, ranging from façade repair and roof replacement to upgrading common areas, kitchens, and baths; new flooring, doors, and hardware throughout; LED lighting, and other noncritical repairs.
- Lower East Side I & II Apartments are located at 384 East 10th St. and 199 Avenue B in Manhattan. Lower East Side I contains 152 project-based Sec. 8 units, while Lower East Side II contains 91 project-based Sec. 8 units. All units will be maintained as affordable to tenants whose annual income does not exceed 50% of the AMI. Co-owners LIHC and Center Development Corp. will execute approximately $7 million in capital improvements, including the installation of new kitchen countertops and appliances, bathroom fixtures, tile floors, laminate wood flooring, doors, and lighting.
- Hudson Piers II is located at 1640 Amsterdam Ave. in the Hamilton Heights neighborhood of Manhattan and contains 83 project-based Sec. 8 units. All units will be maintained as affordable to tenants whose annual income does not exceed 80% of the AMI. Additionally, the property is being refinanced through a Department of Housing and Urban Development Sec. 223(f) loan and will secure a 20-year post-rehab Housing Assistance Payment contract to facilitate nearly $2 million in capital improvements, including new kitchens, granite countertops, and bathrooms in all apartments; common area upgrades such as LED lighting; and ensuring ADA compliance. Scott Jaffee’s Metropolitan Realty Group is a partner on this project.
- The Paul Robeson Houses is located at 1990 Adam Clayton Powell Jr. Blvd. in Harlem and contains 81 project-based Sec. 8 units. All units will be maintained as affordable to tenants whose annual income does not exceed 80% of the AMI. This property was purchased in June by LIHC Investment Group for $17 million. The Article XI will allow ownership the cash flow to make critical repairs and complete ongoing façade work.
- Inwood Houses is located at 10 Post Ave. in Upper Manhattan and contains 95 project-based Sec. 8 units. All units will be maintained as affordable to tenants whose annual income does not exceed 80% of the AMI. In this case, the Article XI will generate the necessary cash flow to complete capital improvements to both apartments and common areas.
With the exception of Paul Robeson Houses, LIHC Investment Group has owned most of the properties for over a decade. On average, the existing restrictions were set to expire in about seven years.
“Preserving the existing affordable housing stock that so many hard-working families depend on is a key pillar of the mayor’s Housing New York plan, and a victory for both residents and neighborhoods that benefit from the stability that comes from extended affordability,” said Maria Torres-Springer, HPD commissioner. “Now, more than 650 households across the city can rest assured that, despite rising costs, they can afford to remain in their homes for years to come.”
HDC president Eric Enderlin added, “These projects exemplify the administration’s efforts to combat displacement and ensure the affordability and diversity of our city’s neighborhoods.”
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