New York Gov. Kathy Hochul recently unveiled a proposal to address the state’s growing urban and rural affordable housing needs. The comprehensive plan proposes the creation and preservation of 100,000 affordable units through a sweeping $25 billion five-year strategy.
Implementing a plan of this scale requires an all-hands approach from the state’s community of owners, developers, lenders, and investors. For Sharmi Sobhan, a senior banker on the JPMorgan Chase Community Development Banking team, it’s a call to action she and her colleagues welcome. Last year, for example, her Northeast team provided $1.4 billion in affordable housing construction and permanent loans, helping to create or preserve 8,400 affordable housing units throughout the region.
How does Sobhan see New York affordable housing evolving this year? She recently shared her views on the state’s challenges and opportunities.
How would you assess 2021?
2021 was a tough year for affordable housing. The overall housing market made a remarkable comeback in New York City and across the state, making affordability harder for renters and buyers alike. COVID-19 also had an impact on the finances of many people who dealt with job losses, reduced work hours, and increased childcare expenses. Increased construction costs and supply chain issues hampered housing production. There was a great deal of effort put into helping people avoid foreclosure and eviction.
With all the challenges of 2021, our team continued to work closely with developers, syndicators, government agencies, and others to structure and finance affordable housing projects across the state. Project leaders can look to us for construction and permanent lending, bridge and acquisition loans, tax credit equity, and off-balance sheet products. We worked on projects as small as 50 units on up to 1,600 units.
What examples come to mind?
We just closed three public-private collaboration deals that could serve as a financing model. The projects were all older New York City Housing Authority (NYCHA) properties that qualified for historic tax credit (HTC) funding. For the first time, we worked with NYCHA and the New York City Housing Development Corp. to put together a financing package that involved HTCs, which is an innovative way to bring much-needed funds to public housing renovation projects. It’s very exciting.
What’s your view of this year?
I know we’re eagerly awaiting the resolution of delayed federal legislation and there are ongoing challenges at the city level with staffing and budgets at the housing agencies. However, I continue to be very encouraged by the commitment to affordable housing from both New York state and New York City.
At the state and city level, we have programs that work and sizable housing subsidy funding in place. Even if federal action stalls, the state and city pipelines are strong. That’s a tribute to the exceptional corps of housing leaders New York is blessed with.
What else encourages you about 2022?
I’m optimistic that some of the pandemic pressures on construction will ease. However, with the pent-up demand for housing, I expect developers and policymakers will continue to need to be creative in coming up with solutions to meet the demand. That challenge inspires us to be even more collaborative and lean in together. Our team has a robust set of tools and the resources to be flexible and responsive. Our commitment is to support the development of safe, clean, affordable housing that delivers a win-win experience for everyone, especially tenants.
Learn more about JPMorgan Chase Community Development Banking.