Unsold condominiums, unrented apartments, and stalled construction sites will be turned into affordable housing under a new program launched by the New York City Department of Housing Preservation and Development (HPD).
Officials hope that as many as 400 affordable units will be created under the new Housing Asset Renewal Program (HARP).
“This program gives us an opportunity to stabilize neighborhoods that have been most affected by the economic downturn while giving us fresh opportunities to create affordable housing,” said HPD Commissioner Rafael E. Cestero.
The agency is putting $20 million into the pilot program.
In order to be eligible for funding, a proposed project must be a completed or partially constructed, unoccupied residential building in New York City, where, due to market or construction conditions, the owner is unable to complete construction or to sell or rent a sufficient number of units to meet private lending requirements.
HARP funding is intended to convert market-rate units to affordable units and enable the owner to complete construction and/or rent or sell the units. Applicants must agree to restrict rents or sales prices for a minimum of 50 percent of the dwelling units in return for HARP subsidy and/or permanent financing.
For projects that propose affordable rental housing, a preference will be given to projects that require a HARP subsidy of less than $75,000 per affordable unit. The proposal must reflect rents that affordable to households with incomes at or below 130 of the Department of Housing and Urban Development Income Limits (HUD IL)—$99,800 for a family of four or $69,900 for an individual. Permanent first mortgage financing must be from either private institutional lenders or the New York City Housing Development Corp. (HDC).
For affordable homeownership projects, a preference will be given to ones that require a HARP subsidy of less than $50,000 per affordable unit. In addition, the proposal must reflect sales prices for homeownership units that are affordable to households with incomes at or below 165 percent of the HUD IL—$126,700 for a family of four or $88,700 for an individual—and must include a letter of interest from a end-loan provider.
Officials note that preference will be given to projects in neighborhoods that will benefit most from intervention as determined by neighborhood distress indicators such as vacancy rates and property value trends. Preference may also be given to projects in neighborhoods with previous public investment and in Neighborhood Stabilization Program-eligible census tracts.
New construction projects that have received prior government subsidies are not eligible.
HPD has released the Notice of Funding Availability for the program, and applications will be accepted through December. Proposals will be reviewed by HPD and HDC. Funding is expected to be awarded on a rolling basis, starting in September.