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Land Lease Opportunity to Preserve Public Housing
Frequently Asked Questions


       

Please note, the information contained within this FAQ section may change regularly. It is highly advised that interested parties review the RFEI documents for the most up to date information and submit contact information to LLIRFEI@NYCHA.NYC.GOV containing full contact name, company name and email address to be notified of updates.

  1. What is the timeline for NYCHA’s Land-Lease Proposal, and for the process of consulting with residents?
  2. What kind of new services will developers be required to install in the selected developments?
  3. Has NYCHA considered how construction and safety issues will impact children at the selected developments as they walk near construction zones? Is there a plan to address these issues?

  1. Why is NYCHA offering its land to private developers?

     

    NYCHA is receiving less and less money each year from Congress to maintain its developments. Since 2001, Congress has underfunded NYCHA's operating budget by $750 million to run its developments; and by another $875 million in capital to keep the buildings, elevators, and heating and electrical systems in good repair. With decreased funding, NYCHA has to find other sources of capital to preserve public housing for future generations. NYCHA's plan to lease - not sell - the land for development would potentially generate over $1 billion in capital funding for needed building improvements.

  2. What does this underfunding mean to residents?

     

    It means that roofs, elevators, heating systems, and facades do not get the maintenance, repair or replacement that they need, especially as the buildings continue to age. About 70 percent of NYCHA’s buildings are 40 years old, or older. Delayed fixes to the infrastructure and building systems impact apartments with leaks and cause heat and elevator services to become increasingly unreliable. The building systems and structures need to be maintained to ensure that public housing remains a vital resource to families in need.

  3. How would this plan work?

    NYCHA would offer several available parcels of land on public housing sites for long-term ground leases to developers. The developers would build a mix of low-income and market-rate apartments on this land. The long-term ground leasing agreement would immediately bring tens of millions of dollars of new capital to NYCHA every year, not to mention additional low-income housing, which would benefit many NYCHA residents.

  4. What would happen with this money from the ground-leasing?

    NYCHA would use these funds exclusively for capital improvements in public housing buildings—including roofs, elevators, and heating and electrical systems, among other infrastructure.

  5. What about the affected NYCHA developments—would they get this money?

    The revenue from the ground leases would most definitely benefit the affected development first, by helping address capital improvements. In addition, NYCHA residents at these locations would share in building systems enhancements—including enhanced security and uninterrupted power for critical lighting, heat, and water systems.

  6. Wouldn’t this be disruptive to the community?

    Construction would not take place forever, and would be conducted in a strictly monitored fashion. Additionally, construction would generate job opportunities for NYCHA residents. Once the new building is in place, there would also be additional, permanent job opportunities for NYCHA residents to pursue.

  7. Where is this available land?

    NYCHA is analyzing open spaces and parking lots at 8 Manhattan developments—all below 110th Street; Baruch, LaGuardia, Meltzer, Smith, and Campos Plaza on the Lower East Side; Washington and Carver developments in East Harlem; and Douglass on the Upper West Side.

  8. What is the land being used for now?

    Most of the proposed sites are parking lots or garbage compactor yards. NYCHA would ensure that all parking spaces for current permit holders would be replaced, and if necessary, compactor yards would be relocated on NYCHA grounds.

  9. Would any residents have to move?

    No public housing resident would have to move, nor would any residential building be replaced or demolished for the new building construction.

  10. What about the loss of open space and play areas?

    In most of these developments, there are additional, existing open spaces and play areas nearby. Reconfiguration of the campus would also lead to improved and relocated open spaces in some circumstances.

  11. Would these buildings look very different from other buildings in the community?

    NYCHA is proposing sites that would follow zoning regulations that are already in place for the area, and no new zoning would be sought. While the building(s) would each have its own address, they also would have features that ultimately would be a part of the surrounding developments—such as enhanced security and alternative power systems.

  12. What is the timeline for NYCHA’s Land-Lease Proposal, and for the process of consulting with residents?NYCHA is committed to conducting an open and transparent process that will continuously engage the selected NYCHA communities throughout this long process, from now until a shovel can be put into the ground to build in 2015-2016.

    Before RFP Issuance:

    Resident engagement commenced at the beginning of 2013, and will continue well into 2014. Thus far, there have been a series of resident engagement meetings where residents have had an opportunity to comment and provide input. At these meetings NYCHA senior staff has reviewed the overall aspects of the plan, discussed site specific design related issues and gone over the different components of the Request for Proposals (RFP) from developers.  Additionally, there have been Q&A sessions at the end of every meeting to ensure that residents have an opportunity to raise any issue they wish to have addressed.

    The meetings have been very informative and have provided us with a good deal of feedback that we are analyzing for inclusion into the RFP.  Additionally, processing and funding of Tenant Participation Activity (TPA) funds requests will be expedited in order to give Resident Associations the opportunity to assemble teams of qualified experts to assist in advising residents after the drafting of the RFP. To a limited extent, NYCHA will give residents and other stakeholders the opportunity to review and comment on pre RFP discussion documents before the RFP is finalized and released.  NYCHA has pushed back the issuance of the RFP. A release of a single RFP for all 14 sites is projected for July.

    After RFP Issuance:

    After the RFP is issued, NYCHA will continue to engage residents, community members and other concerned stakeholders to gather their thoughts and comments and may incorporate changes into the RFP through the issuance of addenda, prior to submissions from proposers. NYCHA expects to hold one or more pre-submission conferences for interested developers.  The dates and locations for these meetings have not been determined.  If a pre-submission conference is not open to the public, a transcript or recording of the conference would be made available.

     

    Potential developers will have about 3 months to respond to the RFP after it is released. NYCHA will review the responses. NYCHA is considering requests from some stakeholders that limited, nonfinancial information be shared with them.

    NYCHA also intends to engage residents in collaborative capital planning meetings to discuss the use of proceeds generated from the Land Lease Initiative.  The capital needs at the respective developments will be presented to residents who will work together with NYCHA professionals to prioritize the order of capital investment projects identified in the PNA, or physical needs assessment, for the particular development. Conditional designations of developers for the sites will begin in December 2013.

     

    After Conditional Designations of Developers:

    After Conditional Designations, NYCHA will require Conditionally Designated Developers to conduct multiple meetings in several formats to ensure that residents have opportunities to obtain information and express concerns.  These plans are a necessary component of HUD’s Section 18 process. They will be required in the RFP, and further implemented through Conditional Designation Agreements with selected Proposers.

     

    Residents, elected officials, and other stakeholders will have an opportunity to help shape these engagement plan requirements, and have already been instrumental in doing so.

    Section 18 Application:

    Preliminary environmental assessments have commenced, with full review under NEPA a pre-requisite to HUD’s final approval of any application under Section 18. NYCHA will conduct environmental review as required by HUD regulations and guided by the City’s CEQR process. NYCHA would not be bound by any lease agreements until the completion of the Section 18 approval by HUD. Once a draft Section 18 application is prepared, it will be made available to residents, and consultation with the residents would follow all of the procedures prescribed in HUD’s regulations.

    Regarding zoning and land use approvals, these are expected to be routine; however, as with all developments, we will be required to comply with zoning. 

    HUD Approval:

    After a Section 18 application is finally approved by HUD, including completion of environmental review, NYCHA will continue engagement efforts with stakeholders to guide implementation, despite the fact that this will no longer be a pre-condition for HUD’s approval. Each site’s ground lease will also require developers to adhere to a process to keep residents informed and provide a method for their concerns to be communicated to, and addressed by, the developers.

    Construction:

    Construction will begin no earlier than late 2015. During construction, Developers will be required to keep residents informed and to attend meetings on a regular basis to provide answers to residents’ questions and address their concerns.

    NYCHA will also continue to engage residents, elected officials and stakeholders concerning the leasing plan.

  13. Will any existing residential or service building be torn down, or any building vacated, because of this proposal?

     

    No.

  14. What criteria were used to determine locations for development?

    Sites were selected for their potential to generate significant revenue and permit the construction of new buildings in compliance with the existing NYC Zoning Code.  It was critical that there not be any demolition or loss of any existing housing units. It was also imperative that the sites selected offer frontage on existing streets, thereby minimizing disruption to NYCHA campuses during construction.

  15. What is the estimated annual revenue from the land-lease opportunity? How will it be spent?

     

    The annual estimate for revenue for all the sites is $30-$50 million. This money will be spent on NYCHA-identified Capital Needs.  The Board would amend the capital plan based on the jointly developed scope from the collaborative capital planning process.  HUD requires that uses of Section 18 funds be itemized in advance and the expenditures tracked.

  16. Will any priority on the expenditure of these funds go to the 8 selected developments?

     

    Absolutely. NYCHA’s current policy is that at least 100% of the revenue generated should be earmarked for investment at the affected development.  The actual level of investment will take into account the magnitude of required capital needs at each affected developments; other capital funds currently budgeted for the development; and the magnitude of the local need versus the amount of the anticipated ground rent required to fully address that need. Resident input will be considered by the Board in making the determination of the spending commitments at each of the affected developments.

  17. How likely is it that the federal government will reduce NYCHA’s funding in light of the new ground lease revenue?

     

    To our knowledge it is not likely based on the experience of other cities.  The various existing formulas do not take this into account.

  18. Will Tenant Participation Activity (TPA) funds be available for Resident Associations?

    NYCHA will make funds available to provide technical, financial, legal, environmental, planning and architectural professional support to Resident Associations at the affected developments.  These funds will not reduce a development’s existing TPA fund allocation.Generally, requests for TPA funds must be submitted using the TPA Funding Application and must contain the following:Written proposals, resumes, and any applicable professional certificates (from consultants providing professional services, such as training or other services)Consultants’ and vendors’ price quotesCompletion of other relevant attached formsTPA funds are only available to Resident Associations that are recognized pursuant to Subpart B of 964 and are in compliance therewith, their by-laws, and the MOU with NYCHA.  Resident Associations must have, among other requirements, a 5-member, democratically elected Resident Association Board and must also have current by-laws.

  19. What is the difference between the City’s Uniform Land Use Review Procedure (ULURP) and HUD’s Section 18 process? Why wouldn’t NYCHA adopt ULURP’s standards?

     

    ULURP is simply different from the Federal process which governs NYCHA.  Delegating ultimate authority for the disposition of NYCHA property to the City could be viewed as violating agreements between the US Government and NYCHA.

  20. What is NYCHA’s rationale for an “80/20” mix of market-rate and affordable apartments?

    NYCHA considered the full spectrum of affordability mixes, from all affordable to all market rate. Any mix with less than 20% affordable apartments is not financially feasible for a rental building due to the amount of real estate taxes that would be due from the inception of the lease.  Therefore, we looked at the following mixes with 20% or more affordable units:

  21. Will any priority be given to a developer who proposes to increase the percentage of affordable housing in the new construction above the minimums included in the RFP?

    Yes. However, our current plan is that this criterion would be considered only if there is no substantial reduction of financial return to NYCHA.

  22. What is NYCHA’s plan to market the new apartments and offer community preferences?

    NYCHA residents from the selected developments will have the highest possible preference for the low-income apartments. There will also be a preference for NYCHA residents from other developments, and for residents of the local communities surrounding the selected developments. Other preferences may apply based on particular financing sources utilized by developers.

    The residential units will be marketed in compliance with federal fair housing laws and the affordable units will be marketed via a housing lottery similar to many NYC housing lotteries that have preferences set aside for identified groups.

  23. Will there be separate entrances or amenities for residents of the market-rate apartments? Will the affordable apartments be segregated or concentrated in one part of the new buildings?

     

    No. All will use the same entrance, both market-rate and low-income apartment residents. NYCHA is committed to making sure the 20% of affordable units are not segregated or concentrated in one part of the building or one type of unit.

  24. What happens if a Developer goes bankrupt or otherwise cannot afford to maintain the new housing? What if conditions deteriorate?

     

    Assuming the lender does not foreclose and take over the property, NYCHA would terminate the lease.  NYCHA would be entitled to use a reverted site in any permitted manner – any covenants and restrictions would be eliminated in the event of a lease termination.  In some circumstances, the low-income housing would need to be maintained or replaced.

    Under the provisions of the ground leases, NYCHA would have the right to step in if conditions at the new housing deteriorate.

  25. Will development on the leased sites create jobs for NYCHA residents? 

     

    Yes. Employment opportunity for residents is one of NYCHA’s highest priorities. Construction would generate job opportunities for NYCHA residents, and once the new building is in place, there would also be additional, permanent job opportunities for NYCHA residents to pursue.

     

    NYCHA also plans to provide job training for these opportunities through the office of Resident Economic Empowerment and Sustainability (REES). REES was created in 2009 to measurably support increased income and assets for residents through programs, policies and collaborations in employment, education, training, and other key areas. To learn more about REES, visit http://opportunitynycha.org/.

     

  26. Will any preferences be given to responses or developers who include plans to hire locally, partner with M/WBEs, give priority to hiring NYCHA residents, or source materials and services from New York City and State?

    Yes. These items will be required of any successful proposer, similar to Section 3 requirements in federally funded contracts or other NYCHA contracts.

  27. What kind of new services will developers be required to install in the selected developments?

     

    NYCHA has committed to require developers to install security systems, not only in the new buildings, but also throughout the existing development campuses.  These will include comprehensive camera systems and possibly a functional equivalent of layered access, or other cutting-edge measures.

     

    NYCHA will be responsible for operating and maintaining the security systems at each of the developments, so far as public housing buildings are concerned.

     

    Developers will also be required to install an electrical generator system in the new buildings – this generator must be capable of providing emergency power to the rest of the development campus in the event of an outage.  In the best case, a co-generation system would actually reduce NYCHA’s utility bills, while providing power for emergencies.  A more conventional system might be operated by NYCHA at its own expense when needed.

  28. Has NYCHA considered how construction and safety issues will impact children at the selected developments as they walk near construction zones? Is there a plan to address these issues?

     

    NYC’s regulations for the protection of construction sites are quite exhaustive, and, in addition, NYCHA would require that any obstructed sight lines that occur as the result of protective scaffolding be equipped with a security system.

  29. Will the proposed construction exhaust the available development rights or “air rights” at the selected developments?

     

    No.

  30. Has NYCHA considered how the new buildings will affect classroom sizes and overcrowding in nearby schools?

     

    This is an issue we have not studied in depth at this time. NYCHA would consider including supplemental public school space in its development plans if environmental review shows that it is necessary to mitigate the effects of the new developments.

  31. Will NYCHA records regarding disabilities and medical conditions be taken into account when attempting to mitigate the impact of construction-related activities on existing residents?

     

    All information will be reviewed to determine whether mitigation is needed as part of the environmental review process.  Any disclose-able information in NYCHA records with regard to resident medical conditions will be made available for this process.

  32. Is NYCHA committed to replacement of affected Community Centers?

    Yes. The RFP will unequivocally require that the Community Centers at Washington Houses be replaced in a manner that permits services to continue without significant interruption.

  33. How many parking spots are being eliminated by the construction?

     

    NYCHA is committed to replacing parking for all current residents with legal permits, not necessarily every existing space.

  34. What will NYCHA require for energy efficiency performance in the new buildings? 

     

    NYCHA wants high performance, resilient buildings that support themselves in a green manner and increase the resiliency of the overall campus.

  35. Will NYCHA allow developers to seek zoning changes?

     

    Yes. However, proposals will not be contingent on the success of those efforts. The only changes that NYCHA would permit would cover the arrangement of already permitted bulk or the listing of additional permitted uses, such as ground floor retail.  Applications that seek additional density would not be permitted.  Any zoning change would require approval through the City’s Uniform Land Use Review Procedure (ULURP).

  36. Will NYCHA impose height or density limits at each proposed site? 

    NYCHA will place a density (floor area) maximum on each site as well as a strictly defined site area.  In some cases, zoning directly limits height.  In most cases, the height is limited by zoning provisions such as setback requirements and the practical issue of constructing an efficient building utilizing the permitted zoning floor area within the allotted site area.  NYCHA may impose a height limit on some sites.

“THE RESPONSES PROVIDED ARE FOR INFORMATIONAL PURPOSES AND ARE BELIEVED TO ACCURATELY REFLECT NYCHA’S KNOWLEDGE AND INTENT ON THE DAY POSTED.  ACCORDINGLY, NYCHA MAY UPDATE OR CHANGE THESE RESPONSES TO CORRECT ERRORS, AS CIRCUMSTANCES CHANGE, AS MORE INFORMATION BECOMES AVAILABLE, OR AS IT IS DECIDED TO MODIFY THE DECISIONS UPON WHICH CERTAIN RESPONSES WERE BASED. INFORMATION PROVIDED OR OMITTED IN THESE INFORMAL RESPONSES TO THIS FAQ SHALL NOT BIND NYCHA OR ANY OTHER PARTY NOW OR IN THE FUTURE.  ANY READERS' RELIANCE UPON THE INFORMATION PROVIDED OR OMITTED HEREIN IS AT SUCH READERS' OWN RISK, AND NYCHA SHALL NOT BE LIABLE FOR ANY DETRIMENT (FINANCIAL OR OTHERWISE) SUFFERED AS A RESULT OF SUCH RELIANCE.”

Land Lease Overview