New York to Win Record $1 Billion Grant For Affordable Housing

Mayor Bloomberg’s push to create 65,000 new units of affordable housing in New York by 2008 is getting a $1 billion shot in the arm this week when a national pioneer in the creation of affordable housing, the Maryland-based Enterprise Foundation, announces its intention to provide its largest contribution to the city.Officials familiar with the discussions told The New York Sun the $1 billion donation is aimed at helping the mayor with his $3 billion New HousingMarketplace program, which set the goal of building or preserving 65,000 new homes and apartments in the five boroughs over a five-year period beginning last year.One official characterized the foundation money as the “biggest cash infusion given to a city from the Enterprise Foundation ever.” To put it in perspective, the Enterprise Foundation will give the city in just five years what it had previously provided to New York over the past 15 years in equity, grants, and loans.How the money will be parceled out and if there is a deadline by which the city has to use the money is unclear. It is also unclear why the group has decided to step up so drastically its contributions to the city. The foundation previously pledged to commit just $5 million in grants to New York by 2007, according to its Web site. The foundation, which typically works as the syndicator on projects, has brought in agencies like Fannie Mae, among others, as primary investors in affordable-housing programs.Mr. Bloomberg is expected to announce the $1 billion donation during an address Thursday at the foundation’s annual network conference at the Marriott Marquis.The foundation’s projects in New York have run the gamut. According to Enterprise, it has worked in Chinatown, Harlem, the South Bronx, and the Bedford-Stuyvesant section of Brooklyn to develop more than 16,000 apartments and renovate more than 950 formerly abandoned buildings in the city.Enterprise was a key player, for example, in the opening in 1988 of Equality House on Eldridge Street on the Lower East Side, which provided 60 units for families and senior citizens in 3 rehabilitated buildings. The housing was created for low-income families with annual income of no more than $37,000. Rents for one-bedroom apartments there today are only about $500 a month.The foundation’s latest contribution comes at a time when the city is close to exhausting its usual sources for creating affordable housing: buildings bought because of foreclosures, or tax liens, or renovations. The commissioner of the city’s Department of Housing Preservation and Development, Shaun Donovan, told the Sun in an interview last week that the city is trolling for new sources of housing.“People tend to forget that a couple of decades ago we had over 100,000 apartments that the city took in tax foreclosure,” Mr. Donovan said. “On June 30th, the end of our fiscal year, we were down to 3,400. The steady state is that 200 to 250 buildings a year will continue to come through our tax-lien sales, but the whole Marketplace Plan is where the new pipeline will come from.”The Enterprise Foundation money could help the city push ahead on a number of fronts. Mr. Donovan’s department has already started an extensive rezoning program, in which manufacturing and waterfront properties are being retooled for residential use. Similarly, the housing commissioner is also looking at “brownfield” sites and vacant lots near existing housing projects as sites for new units.More recently, the agency has focused on a New Ventures Incentive Program to provide developers of affordable housing the capital to allow them to get in early and compete to buy properties that go up for sale. Then, a year later, when they have all their financing together, the developers can repay the city, at a low interest rate, and get the project done.“New York is the poster child of why you need this because it is such a competitive market,” Mr. Donovan said.The Enterprise Foundation was the brainchild of James Rouse, a Baltimore developer who began building planned communities and moved into creating housing for the poor. In the past 22 years, Enterprise has had a hand in creating 160,000 units of inexpensive housing across the country and infused some $5 billion into national affordable-housing efforts.Mr. Donovan, without getting into the nuts and bolts of the agreement, confirmed that a major infusion of money would be coming from Enterprise Foundation. If the foundation’s past housing initiatives are any indication, it is likely to use the money in its capacity as an intermediary, bringing together public agencies and private lenders, developers and contractors, and providing money to transfer title of city-held properties to developers and local organizations.The initial capital for the Enterprise Foundation came from the Rouse Corp. The first affordable-housing project in which the foundation invested was in the Adams-Morgan neighborhood of Washington, D.C.

New York to Win Record $1 Billion Grant For Affordable Housing

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