The Bowery Residents' Committee (BRC) is bringing together a 200-bed shelter and a 135-unit affordable housing community at its latest New York City development.
Under construction in the University Heights neighborhood of the Bronx, the nonprofit’s Landing Road Residence is seen as a new model for affordable housing in the city.
It’s the first project being developed under Mayor Bill de Blasio’s HomeStretch program that co-locates and co-finances transitional shelter and permanent affordable housing. The model leverages shared financing to provide cost-effective shelter and to subsidize rents for very low-income, formerly homeless individuals and families on the same site.
Expected to be completed next year, the shelter and permanent housing components will have separate entrances and amenities but co-exist in one building envelope, providing a physical pathway from homelessness to housing security.
A number of BRC clients were doing all the right things, getting jobs and saving money. However, their jobs didn’t pay a lot of money, so their housing situation was unstable, explains Muzzy Rosenblatt, executive director.
That led Rosenblatt and his colleagues at BRC to begin thinking about ways to create affordable housing for its many clients. The organization provides housing and services to more than 10,000 men and women a year.
At the same time, BRC leaders recognized a second challenge involving its shelters. Many are located in leased properties, with the nonprofit paying rent to the property owners. BRC leaders began thinking about opportunities for the organization to own more assets for itself.
Landing Road addresses both problems. The city funding that BRC will receive for operating the shelter will help underwrite the costs of the affordable housing, according to Rosenblatt.
“Necessity being the mother of invention,” he says.
The Landing Road Shelter will provide transitional housing to single adults who have been determined to be employed or employable by the New York City Department of Homeless Services (DHS). The shelter receives financial support to house its residents from a contract provided by DHS.
The permanent housing portion will consist of 111 studio units for formerly homeless single adults earning at or below 35% of the area median income (AMI), and seven one-bedroom and 17 two-bedroom units for families earning 60% AMI or less. The apartments will be within the financial reach of those exiting the shelter system, with affordable rent levels that will allow individuals earning as little as $10 an hour to pay only one-third of their monthly income toward rent, according to city officials.
On-site social services will be provided by BRC. Funding for the services will be funded through the reinvestment of on-site shelter lease payments and private fundraising. In addition, off-site services will be made available through BRC’s own mental health and substance-abuse centers and several partner organizations.
BRC will maintain an office on site and will provide support services for residents living in the shelter and the apartment building.
The total development cost for Landing Road Residence is approximately $62.8 million. Bank of America Merrill Lynch is a major funder, providing a $39.7 million credit facility to finance the project. Additional financing included:
· Bank of America and Capital One with a $22 million letter of credit for construction of the permanent housing and a construction loan of $16 million for the shelter;
· New York City Housing Development Corp. bond financing of $22 million for the permanent housing component of the project;
· Trinity Wall Street loan of $1 million to the project;
· The New York City PRI Fund and the Contact Fund with an additional $1 million loan;
· The New York City Housing Preservation and Development’s Supportive Housing Loan program funding of $2.7 million and $5.6 million;
· Low-income housing tax credit equity of $18 million syndicated by Red Stone Equity Partners;
· A $685,000 grant from Chase for project management and to create energy efficiency through the use of solar power; and
· Long-term financing of $18 million from Community Preservation Corp. for the shelter.
The property was purchased through acquisition and predevelopment loans from the New York City Acquisition Fund ($5.1 million) and the Corporation for Supportive Housing ($500,000). Additional predevelopment funding was received from Deutsche Bank through a loan of $255,000 and a grant of $120,000.
