Completed Financing Paves Way for Harlem Affordable Housing
- Aug 08, 2016
By Dees Stribling, Contributing Editor
New York—A group of public and private entities have concluded a deal to finance the acquisition and renovation of five affordable housing properties in Harlem. The deal means that all 549 apartments in 18 buildings will remain affordable to low-income tenants for the next 40 years.
Participating on the public side are the New York City Department of Housing Preservation and Development (HPD), the New York City Housing Development Corp. (HDC) and HUD. The private players are Tahl Propp Equities, along with Bellwether Enterprise Real Estate Capital LLC (Bellwether Enterprise) and Enterprise Community Investment Inc., both subsidiaries of Enterprise Community Partners.
The five properties are Gladys Hampton Houses (2411 Frederick Douglas Blvd. and 400 St. Nicholas Ave.), New West I and II (8-56 W. 111th St.), and Riverside I and II (602-622 W. 135th St.). The financing will facilitate building-wide renovations, including roof replacements, new windows and boilers, updates to common areas, and upgraded apartment interiors with new kitchen cabinets, appliances, flooring and bathroom fixtures.
All the buildings have federal project-based Section 8 contracts, further preserving affordability through rental subsidies for the property owners. The properties will remain full as they undergo construction. A portion of the units, upon their vacancy, will be set aside for homeless individuals and families.
The development cost for the portfolio, including the cost of acquisition and rehabilitation, will total some $135 million. HPD provided a loan in the amount of $15.2 million and Low-Income Housing Tax Credits to the project that resulted in $35.9 million in equity. HDC provided tax-exempt bonds that resulted in more than $62 million in construction financing from Bellwether Enterprise. Enterprise syndicated the tax credit equity to finance the deal.
“The biggest challenge today is that as land and building costs rise, thereby increasing the overall financing needs of affordable housing developments, they often can’t be met with just debt and tax credit equity,” Bellwether Enterprise executive vice president & director of housing Phil Melton told MHN. “The decline of available subsidies from federal, state and local sources has made it much more difficult for developers to get deals to pencil in today’s environment, especially in high-cost urban markets.”