January 23, 2020 - The New York City Housing Development Corporation (HDC) announced the inaugural issuance of $375 million of Housing Impact Bonds, a new category of Sustainable Development Bonds. The 2020 Series Bonds will finance the preservation and rehabilitation of 2,625 NYCHA homes across 37 tenant-occupied public housing buildings and two non-residential community centers throughout Brooklyn.
The Housing Impact Bonds Resolution (Impact Resolution) is created as part of New York City’s Permanent Affordability Commitment Together (PACT) plan which aims to convert at least 62,000 public housing units to Section 8 rental housing developments by the end of 2028. PACT is a critical part of the City’s 10-year strategic plan to repair public housing to bring improved quality of life to NYCHA residents, while ensuring permanent affordability, guaranteeing tenant protections, and maintaining public ownership of the land and buildings.
“We are pleased to announce this innovative investment tool which will help to rehabilitate and secure affordability of New York City’s precious public housing stock,” said HDC President Eric Enderlin. “HDC is proud to be contributing its deep experience in affordable housing finance, compliance, and asset management to help protect NYCHA residents under the PACT plan.”
“It's absolutely essential that we protect and rehabilitate the City's public housing stock, both because the more than 400,000 residents who call NYCHA home deserve better apartments and because NYCHA housing is so critical to keeping the City vibrant and diverse." said Deputy Mayor for Housing and Economic Development Vicki Been. “I want to thank my colleagues at NYCHA, HPD, and HDC for thinking outside the box and for their hard work on behalf of NYCHA Residents."
“Today’s announcement is an important step in realizing the Authority’s promise to dramatically improve the quality-of-life for our residents,” said NYCHA Chairman & CEO Greg Russ. “The funding enabled by these bonds will allow us to make wholesale capital improvements to our developments and help ensure our ability to provide permanent affordable housing for generations to come.”
“The health of a building must be measured both physically and financially. The situation at hand requires meticulous coordination between all levels of government and thoughtful financing strategies to make impactful improvements in the city's precious public housing portfolio,” said HDC Board Chair and New York City Department of Housing Preservation and Development (HPD) Commissioner Louise Carroll. “ I congratulate the hardworking minds at HDC for the creation of this new financing tool that will improve the lives of those who call NYCHA their home.”
The new Housing Impact Bonds are designated as Sustainable Development Bonds consistent with the goals of the International Capital Markets Association’s Social Bond Principles to end poverty and to make cities inclusive, safe, resilient, and sustainable. All units funded by the 2020 Housing Impact Bonds serve low-income households at or below 60% of AMI.
The inaugural issuance includes $296,380,000 in tax-exempt bonds under 2020 Series A and $78,620,000 in Federally Taxable bonds under 2020 Series B. The proceeds of the bonds will be dedicated to two 2020 PACT Mortgage Loans which will respectively be secured by a standby credit enhancement from Freddie Mac and funding agreement from HDC.
The Housing Impact Bonds are anticipated to price and close in February 2020. The Series A and Series B Housing Impact Bonds have been assigned an Aa2 rating by Moody’s Investors Service.
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The New York City Housing Development Corporation (HDC)
The New York City Housing Development Corporation (HDC) is the nation’s largest municipal Housing Finance Agency and is charged with helping to finance the creation or preservation of affordable housing under Mayor Bill de Blasio’s Housing New York plan. HDC also serves as a key financing partner in the rehabilitation of our city’s public housing stock under the NYCHA Permanent Affordability Commitment Together (PACT) initiative. Since 2003, HDC has financed more than 184,000 housing units using over $24.2 billion in bonds and other debt obligations, and provided in excess of $3.095 billion in subsidy from corporate reserves and other available funds held by the corporation. HDC ranks among the nation’s top issuers of mortgage revenue bonds for affordable multi-family housing on Thomson Reuter’s annual list of multi-family bond issuers. In each of the last five consecutive years, HDC’s annual bond issuance has surpassed $1.6 billion. For additional information, visit: http://www.nychdc.com
