MAYOR MICHAEL R. BLOOMBERG, GOVERNOR GEORGE E. PATAKI AND COMPTROLLER WILLIAM C. THOMPSON JR. ANNOUNCE FINAL APPROVAL OF $130 MILLION FUND FOR AFFORDABLE HOUSING
BatteryPark CityAuthority Board AuthorizesTransfer of Revenues to Build 4,300 Units for More than 11,000 New Yorkers
Mayor Michael R. Bloomberg, Governor George E. Pataki and New York City Comptroller William C. Thompson, Jr. today announced the final approval for the New York City Housing Trust Fund, which will be funded by $130 million in Battery Park City Authority revenues. The Fund will be used to create or preserve 4,300 affordable housing units over the next three years. The Housing Trust Fund will also provide the first financing for the New York Acquisition Fund, a $200 million initiative that will serve as catalyst for the construction and preservation of more than 17,000 units of affordable housing Citywide in the next 10 years. The Battery Park City Authority’s board voted today to approve the Housing Trust Fund which was proposed by the Mayor and Comptroller in April 2005. The 4,300 affordable units will be part of Mayor Bloomberg’s New Housing Marketplace Plan. The $7.5 billion Plan will build and preserve 165,000 units of affordable housing over ten years, providing homes for 500,000 New Yorkers, more than the entire population of Atlanta.
“Today’s vote allows us to use Battery Park City Authority revenues to create affordable housing for some of the New Yorkers who need it most,” said Mayor Bloomberg. “Affordable housing is one of New York’s most pressing needs. The Housing Trust Fund is another example of how we are using new and innovative sources of funding to build and preserve affordable housing. Thanks to Governor Pataki, BPCA Chairman James F. Gill and the State Legislature, the Housing Trust Fund will help us build and preserve 4,300 units of housing and help us realize the ambitious goals of our New Market Housing Marketplace Plan, the largest municipal affordable housing plan in the nation’s history.”
“Since 1995, the State has created and preserved nearly 200,000 units of affordable housing throughout the State,” said Governor Pataki. “I would like to thank Mayor Bloomberg, Comptroller Thompson and BPCA Chairman Gill and President Cavanaugh for their hard work and partnership in ensuring the dedication of this new $130 million infusion of funds for use throughout the five boroughs. This new initiative will be leveraged to induce additional private investment and partnerships to further increase affordable housing opportunities for thousands of City residents and their families who need it most.”
“As housing costs continue to rise in our City, so do the concerns of many hard-working New Yorkers who are being squeezed by the real estate market. Today’s vote will help create options for these New Yorkers by creating and preserving housing they can afford. I am very pleased that we were able to fulfill a longstanding promise to use Battery Park City funds for the benefit of all New Yorkers,” said City Comptroller William C. Thompson, Jr.
“The Battery Park City Authority has throughout its history taken enormous pride in its ability to contribute to the strength, support and development of New York City,” said James F. Gill, Chairman of the Hugh L. Carey Battery Park City Authority. “We are delighted today to be able to offer this payment in support of affordable housing for the City of New York.”
The Fund will be administered by the New York City Department of Housing Preservation and Development (HPD). It will provide a flexible funding source that can address New York City’s affordable housing challenges in three ways:
Housing for Hard to Reach Populations
The Fund will provide an additional subsidy for new construction or substantial rehabilitation that targets income groups which are currently the most difficult to reach, such as those earning below 30% of area median income ($21,250 for a family of four), or those earning between 60% and 80% of area median income ($42,540 to $56,700 for a family of four). HPD will use $70 million towards the development of an estimated 2,000 apartments for these families.
Large Scale Preservation
The Fund will preserve existing affordable units by funding large-scale acquisition of properties requiring repairs to maintain long-term viability and rehabilitation of loans at risk of converting to market rate. Potential beneficiaries include properties or loans currently held by HUD and Low Income Housing Tax Credit - assisted projects reaching the end of their tax credit investor period. After purchase of properties or loans, these units will be rehabilitated and transferred as necessary to responsible new owners. HPD will use a cumulative total of $35 million towards the preservation of approximately 1,800 dwelling units.
Large Scale Land Acquisition
The Fund will pay for land acquisition and predevelopment costs for affordable housing. Given rising prices and a shortage of City-owned sites, the Housing Trust Fund will create a “land banking” capacity to find, acquire, hold and prepare land which can later be developed for affordable housing. Potential sources of land include State and Federal land that is underutilized and could be acquired for affordable housing development at discounted prices, or land held by other institutional partners such as churches, hospitals, or universities that may be looking to develop underutilized land in their portfolios. The Fund may be used for pre-development expenses such as appraisals, environmental reviews, soil borings and post-acquisition maintenance. HPD will use a cumulative total of $25 million for these costs that will ultimately result in the creation of an estimated 500 affordable homes.
The Housing Trust Fund will provide the first financing for the New York Acquisition Fund, a $200 million initiative that will serve as catalyst for the construction and preservation of more than 17,000 units of affordable housing citywide over the next 10 years.
The Fund provides local and not-for-profit developers with financing to acquire private property for the construction and preservation of affordable housing. Several national philanthropies have committed $32 million to the Acquisition Fund. The $8 million from the Housing Trust Fund will represent the City’s contribution. Some of the City's major banks and financial institutions will provide $160 million for the fund.
“The Housing Trust Fund will help provide the City with the ability to meet New York City’s housing challenges in innovative ways,” said HPD Commissioner Shaun Donovan. “The flexibility of the Fund provides us with an opportunity to address several key challenges of our new housing marketplace: from providing housing for hard-to-reach populations, to maintaining the affordability of existing affordable housing, to acquiring land in a City where it is very expensive. The 4,300 affordable units that will be created and preserved will be another important step towards making New York a city of opportunity for all.”
“Battery Park City is a successful urban renewal project,” said James Cavanaugh, President of the Hugh L. Carey Battery Park City Authority. “To be able to use the funds generated from one successful project to begin another is a fine example of government at its best. I congratulate the Governor, the Mayor, the Comptroller and our Chairman, James Gill, for having the foresight to establish such a program.”
The Battery Park City Authority’s mission is to develop and maintain 92-acres of landfill located at the southern tip of lower Manhattan across from the former World Trade Center sites. The Authority accomplishes its mission by leasing plots of land to private developers through a public bid process. Developers construct the buildings and pay both ground rent and Payments in Lieu of Taxes (PILOT) to the Authority. Excess revenues collected by the Authority, excluding PILOT and after operational expenses and payment of debt service, is held in special reserve until the New York City Mayor, Comptroller and the Authority’s Board agrees to its use. To date, Battery Park City Authority has transferred more than $1.2 billion dollars to New York City, the most recent transfer coming last month when the Authority turned over $107 million dollars to the City’s Budget Office.