Albany, NY – January 27, 2009 – (RealEstateRama) – The New York State Division of Housing and Community Renewal (DHCR) was the first housing agency in the nation to address financing gaps and other problems caused by the economic downturn. As a result the agency preserved 15 threatened developments, saving 1,132 units of affordable housing.
The economic crisis has had a dramatic impact on the construction of affordable housing. Most significantly, it has caused the devaluation of Low Income Housing Tax Credits (LIHTC) –one of the most reliable sources of equity for developers of affordable housing. The developers sell the credits to investors and use the equity to finance their affordable housing projects.
However, because of the downturn, credits that were worth 92 cents to the dollar last year have dropped to as low as 71 cents in 2008, which caused funding gaps for a number of affordable housing projects already under development.
In February, when the devaluation of the credits first impacted the affordable housing community, DHCR Commissioner Deborah VanAmerongen began developing a new program that would provide eligible developers facing a funding gap with the assistance they needed to close their deals.
VanAmerongen said “Thanks to additional resources provided by the Governor and State Legislature, DHCR was able to work with developers who had done everything in their power to make up for the loss of equity, including seeking additional financing and reducing their own compensation. It is very gratifying to save these 15 projects and the 1,132 units of affordable housing they will provide to communities across the state.”
DHCR also partnered with the state Housing Finance Agency (HFA) to save a number of projects that had to close by year’s end or face the loss of millions of dollars in bond financing. VanAmerongen said “the close working relationship between HFA and DHCR have helped us to make great strides in addressing the state’s critical shortage of affordable housing. That relationship was instrumental to our success in saving these projects”
The projects saved by DHCR include:
NYC AND LONG ISLAND
- Rheingold Heights II – Brooklyn, NY. New construction of 59 units. Awarded additional $187,751 in additional tax credits to close funding gap caused by loss of equity.
- Common Ground Senior Housing – Brooklyn, new construction of 72 units. Awarded additional $109,870 in additional tax credits to address equity loss.
- Spinney Hill Homes I — North Hempstead. Renovation of 68 units of affordable housing. Provided additional $300,000 in tax credits to cover increased construction-related costs. Also provided a $1.6 million bridge loan in place of other funds which will not be available until next year.
- Heritage House – Manhattan, new construction of 40 units of special needs housing. When funding for the project was threatened by NYC’s own budgetary crisis, DHCR worked with developer and NYC Department of Housing Preservation and Development to renegotiate the terms of the award to save the project.
HUDSON VALLEY
- Liberty Commons, Sullivan County. New construction of 72 units. Provided additional tax credits worth $286,711 to cover credit equity loss.
- Rocky Glen, Dutchess County. New construction of 82 units. Provided a low-interest loan increase of $363,932 to address equity loss.
- River Pointe at Drum Hill, City of Peekskill. New construction of 43 units. Awarded an additional $175,700 in tax credits to counter equity loss.
- The Birches at Chambers, Ulster County. This project, the new construction of 67 units for low-income elderly, had to close by year’s end or lose $2.5 million in bonding. However a funding gap threatened to delay the closing. DHCR provided a low-interest loan through the Housing Trust Fund program, allowing the deal to close on time.
- Riverdale Ave Apartments, Yonkers. New construction of 153 units. Funding gap threatened to delay closing, which would have caused the loss of $16 million in bonding. DHCR provided $4.7 million from the Homes for Working Families program to help close the deal.
- Wesley Apartments, City of Peekskill. This 118 unit development for low-income elderly residents was threatened by a financing gap that would have delayed closing and caused the loss of $4 million in bonds. DHCR provided a low-interest loan of $3 million to help the project close on schedule.
- Woodlands at Liberty and Barkley Gardens, Sullivan County. This project, the rehabilitation of 111 units for low income and frail elderly, was threatened by a funding gap that would delay closing and cause the loss of $3.8 million in bonding. DHCR provided a low-interest $1.7 million loan through the Housing Trust Fund program and to help close the deal on schedule.
CENTRAL NY, SOUTHERN TIER AND CAPITAL DISTRICT
- Near Westside Townhouses – Syracuse. New construction of 14 units. Provided a low-interest loan increase of $148,000 to address credit equity loss.
- Loguen Homes, Syracuse. New construction of 28 units. A funding gap threatened to delay the closing and cause the loss of millions in funding. DHCR provided a low-interest $2.75 million loan through the Housing Trust Fund program to allow the deal to close within the mandated time period.
- Historic Dwightville – Broome County. New construction of 13 units. Provided a low-interest loan increase of $254,710 and a new Urban Initiatives award of $100,000 to cover credit equity loss and construction cost-related increases.
- Embury Apartments – Saratoga Springs. Renovation of 192 units of occupied affordable housing. Worked with Federal Department of Housing and Urban Development (HUD) and other funding sources to renegotiate the terms of the award to preserve the deal.
