Federal and Private Funding To Improve NYCHA Housing
Mayor Michael R. Bloomberg, Department of Housing and Urban Development (HUD) Secretary Shaun Donovan and New York City Housing Authority (NYCHA) Chairman John B. Rhea have announced HUD’s approval of New York City’s application to qualify 21 NYCHA developments – and their more than 20,000 housing units – for federal subsidies. In order to qualify for federal assistance, the developments will be sold to an entity created and controlled by NYCHA. As a result of the transaction, NYCHA will receive more than $400 million in public and private funding, the majority of which will go to capital improvements that will begin immediately and continue for two years. The upgrades, which will create hundreds of construction jobs, will include brick work, façade and roof repairs, elevator replacement, front and rear entrance renovations and heating upgrades. The sale will also enable HUD to include the buildings in a federal subsidy program that will deliver $65-$75 million every year for ongoing maintenance. Joining the Mayor at the announcement, which took place at the Henry Rutgers Houses development in Lower Manhattan, were Governor David A. Paterson, Senator Charles E. Schumer, Congresswoman Nydia M. Velazquez, Assembly Speaker Sheldon Silver, Senate Majority Leader John L. Sampson, Council Speaker Quinn, Assembly Members Vito Lopez and Brian Kavanagh, State Senator Daniel L. Squadron, Council Member Margaret S. Chin, New York City Housing Development Corporation President Marc Jahr, Housing Preservation and Development Commissioner Rafael E. Cestero, Citi Managing Director and Head of Municipal Securities Division Howard W. Marsh, and President of the Citywide Council of Presidents of NYCHA Residents Reginald H. Bowman.
“Residents’ long term quality of life will be improved as dedicated funding and subsidies will result in improvements in building standards and conditions, as well as service enhancements into the future,” said NYCHA Chairman Rhea. “NYCHA understands and values the strong partnerships with our colleagues at City Hall, HUD, State government, as well as the New York City Housing Development Corporation and the Department of Housing Preservation and Development, its labor unions and residents. Working together, we’re enabling New York City to qualify for substantial, permanent increase in federal funding for public housing.”
Last month, the State Senate and Assembly passed legislation necessary to approve the sale of the developments to the entity managed by NYCHA. The bill, championed by Assembly Housing Chair Vito Lopez and State Senator Daniel Squadron, was signed by Governor Paterson.
“Today we ensure that NYCHA will have the resources to maintain and operate affordable housing opportunities for the more than 400,000 New Yorkers they serve,” said Governor Paterson . “I am proud to have provided the State resources necessary to make this possible, and of the work of my partners in the Senate and Assembly, who crafted the legislation enabling NYCHA to qualify for an estimated $65 million in annual operating subsidies from HUD –plus hundreds of millions of dollars in capital assistance. I thank President Obama, Secretary Donovan and our Congressional Delegation for making today’s announcement possible and will continue to work with my colleagues in government to build a brighter future for every New Yorker.”
“This plan now pulls these abandoned NYCHA complexes back from the brink by opening up vital federal resources to ensure that more than 20,000 units of public housing are properly maintained and their tenants receive quality housing they need and deserve,” said Senator Schumer. “I am proud to have worked hard with Congresswoman Velazquez, and Secretary Donovan on behalf of all NYCHA tenants to see this plan come into fruition. All New Yorkers deserve a first-rate, safe home and this plan will get us one important step closers to achieving this goal.”
The sale of the 21 developments takes advantage of a one-time opportunity in the American Recovery and Reinvestment Act of 2009 to qualify NYCHA’s unfunded units for federal funds. It allows for a one-time opportunity – expiring March 17, 2010 – for public housing authorities to bring additional money in from the federal government to fund public housing if a mix of public and private sector money is used to finance the transaction. NYCHA began pursuing such an agreement in September 2009. Once the transaction closes, NYCHA will immediately qualify for dedicated annual allocation of HUD operating and capital funding—about $65 million a year.
All 21 developments would remain public housing and residents will retain all of their rights and protections as public housing residents. NYCHA’s existing federal developments would also benefit as less of its federal public housing subsidy will have to be diverted to support units that receive no federal money, or other funds. The 21 developments are: Bay View, Boulevard, Bushwick, Independence, Linden, Marlboro and Williams Plaza in Brooklyn; Baychester, Castle Hill, Marble Hill, Murphy and Saint Mary’s Park in the Bronx, 344 East 28th Street, Amsterdam Addition, Chelsea, Drew-Hamilton, Manhattanville, Rutgers, Samuel and Wise Towers in Manhattan; and Stapleton in Staten Island.
The transaction is one of the largest tax credit bond deals in the nation’s history. New York City Housing Development Corporation will issue taxexempt and taxable bonds to finance the acquisition and rehabilitation of the units. The bonds, which will be issued over the next three years, will be backed by credit support from Citi Community Capital. In all, the transaction will generate more than $400 million for the 21 developments – including $108 million in previouslyannounced stimulus funds that until now couldn’t be used for work on these properties and another $42 million in State modernization funds.