New York state officials have poured additional subsidies into 15 planned affordable housing developments, rescuing 1,132 units of low-income housing from failure.
"Thanks to additional resources provided by the governor and state Legislature, DHCR was able to work with developers,” says Deborah VanAmerongen, commissioner of the New York State Division of Housing and Community Renewal (DHCR).
The threatened developments depend on federal low-income housing tax credits (LIHTCs), the largest remaining affordable housing production program. But the collapse of the capital markets has shrunk the amount of equity developers are able to raise selling LIHTCs because buyers such as Fannie Mae, Freddie Mac, and several large banks have left the market or curtailed their investments.
The price investors are willing to pay for an average dollar of LIHTCs dropped from $0.92 in 2007 to as low as $0.71 in late 2008. That carved deep holes into the construction budgets of developments underwritten based on 2007 LIHTC prices, but which had not yet locked in that pricing by closing their financing.
DHCR helped these properties with reservations of additional LIHTCs and loans from a broad range of state programs. DHCR also partnered with the state housing finance agency to save another set of projects that had to close by year's end or face the loss of millions of dollars in bond financing. The developers had already looked to gap financing from other sources and slashed their own developer fees for the projects, according to DHCR.
The projects saved by DHCR range from Common Ground Senior Housing, a new 72-unit community planned for Brooklyn that received $109,870 in additional tax credits, to Spinney Hill Homes I, a renovation of 68 affordable apartments in North Hempstead, N.Y., that received $300,000 in additional tax credits to cover increased construction-related costs in addition to a $1.6 million bridge loan.