This week, the Department of Housing Preservation and Development (HPD) announced $13.6 million in housing tax credits was awarded to seven developments. These projects will be responsible for creating and preserving 583 affordable units throughout the city.
The awards will go to six new construction projects and one preservation project, and as a result assist two supportive housing developments, two senior developments, and 189 homes for the formerly homeless. The tax credits will raise nearly $133 million in equity to be used for the construction of these projects.
“The Low Income Housing Tax Credit program is the most powerful federal tool cities have to create and preserve affordable housing,” said HPD commissioner Louise Carroll. “With affordable housing desperately needed throughout the city, the program is an invaluable asset to our ambitious affordable housing goals and the city’s future.”
Housing tax credits are allocated by the IRS to state agencies, which then distribute them down to city level. HPD received nine percent competitive credits and four percent “as-of-right” credits. Developers were able to compete for the nine percent tax credits and the four percent “as-of-right” credits were allocated on a rolling basis annually. Once tax credits are attached to a project, developers may sell the credits to corporate investors that will benefit by the reduction of their corporate federal income tax bills for ten years. The project benefits by the investors generating private equity, which in turn covers a portion of development costs, thus reducing debt and need for public subsidy. A property with tax credits can offer lower rents.
In addition, construction timelines were extended on projects that benefited from the tax credits awarded in 2018/2019, as result of delays due to COVID-19.
“These tax credits will allow us to advance our continued commitment to create and preserve affordable and supportive housing stock for all New Yorkers, especially our most vulnerable,” said Assemblyman Steven Cymbrowitz, Chair of the Assembly’s Housing Committee. “I’m pleased that these projects will provide seniors and other New Yorkers with the ability to have safe and stable homes and remain vital and engaged members of our communities.”
Of the six projects, two are located in Brooklyn. New construction supportive housing project HELP ONE Building B will be developed by H.E.L.P. Development Corporation. It comprises 71 new homes, 43 which are designated for formerly homeless tenants. Rheingold Senior Residences is another new construction housing project, one geared toward seniors. Developed by Los Sures/Southside United HDFC, this project will deliver 94 new homes, with 15 designated for formerly homeless tenants.
The Federation Nameoke Apartments, a new construction supportive housing project in Queens, will be developed by the Federation of Organizations for the NYS Mentally Disabled. The development will bring forth 117 new units, and 71 will be designated for formerly homeless tenants. Also in Queens is TQN1003 1415 Mott Avenue, a preservation project to be developed by Metropolitan Real Estate Development. Of the 42 new homes the development will add to the area, nine are designated for formerly homeless tenants. The tax credit award will help to improve conditions of the structure for existing and new low-income tenants.
In the Bronx, Betances VI is a new construction project that will be developed by a partnership consisting of Lemle and Wolff, Alembic Development, and The Bridge. The development will comprise 101 new homes with 30 designated for formerly homeless tenants. Also within the borough is Marion Creston Apartments, a new construction project with the majority of units aimed for low-income residents. Developed by NFW Marion LLC, this development will have 43 new homes, with 13 designated for formerly homeless tenants.
The Norfolk Street Senior development, on Manhattan’s Lower East Side, was also awarded. To be developed by Gotham Real Estate Developers, this project will bring 115 new homes with 18 designated for formerly homeless tenants.