June 9th, 2015 - The Board of Directors of the New York City Housing Development Corporation (HDC) authorized the inaugural issuance of Sustainable Neighborhood Bonds, a new category of social investment bonds and the first for affordable housing in the United States. The Board also approved $953 million in financing, including the issuance of $842 million in bonds to fund the new construction and preservation of 7,178 units of affordable housing in 27 developments across the five boroughs.
Building upon the strength of the municipal market in Green Bonds and the growing interest in socially targeted investing, Sustainable Neighborhood Bonds will allow investors to invest directly in bonds that finance the new construction and preservation of affordable housing projects in New York City, stimulating economic growth, revitalizing neighborhoods, and providing environmental benefits. The new bonds and the additional financing authorized by the HDC Board will be used to advance the goals of Housing New York, Mayor de Blasio’s ambitious plan to create and preserve 200,000 affordable homes over the next decade. The developments financed reflect the plan’s vision of reaching a broader range of New Yorkers struggling with rent burden; creating more mixed-income housing; meeting the special housing needs of the elderly, the physically disabled, and the homeless; and introducing commercial, community and retail space that – together with the affordable housing – is essential to fostering thriving and diverse neighborhoods.
“HDC has a long history of firsts, and I am proud that the Sustainable Neighborhood Bonds authorized by the Board will continue this tradition of innovation,” said HDC President Gary Rodney. “The financing that the Board approved will create and preserve safe, quality affordable housing that provides deeper levels of affordability, serves some of the most vulnerable New Yorkers, and fosters greater economic diversity and stronger neighborhoods. I thank the Members of HDC’s Board of Directors, including our Chair and HPD Commissioner Vicki Been, for their leadership and continued commitment to financing innovations and strategies that will support the Mayor’s housing plan.”
“HDC is a leader in the City’s efforts to create and preserve affordable housing,” said Vicki Been, HDC Board Chair and Commissioner of the New York City Department of Housing Preservation and Development (HPD). “The Corporation is able to leverage its deep reserves, wide network of partners, and extensive expertise to provide critical access to capital and execute complex and enduring affordable housing transactions. Sustainable Neighborhood Bonds is just the latest example of the ingenuity that is the hallmark of the Corporation. I thank Gary Rodney and his team, our many partners, and the State of New York, for ensuring that we have these resources available to keep the city’s housing stock and our neighborhoods strong and healthy.”
Notable among the new construction projects funded is Beach Channel Senior Residences in Queens, one of the 11 projects financed that will be developed under the new Extremely Low & Low-Income Affordability Program (ELLA) program. The seven-story affordable rental building for seniors will be located in the Far Rockaway section of Queens, and will receive up to $43 million in bond financing. At least 80% of its 154 units will be affordable to households earning at or below 60% AMI, and will include additional tiers of deeper affordability. Another project, Compass 2A in the Corona Park East section of the Bronx, is a Mix and Match development that will provide 128 units affordable to families at a range of incomes. Financed by up to $22 million in bonds, half of the units will be affordable to households earning at or below 60% AMI, and the other half will be affordable to middle income families at or below 165% AMI.
Preservation projects approved include Castleton Park, a Mitchell-Lama development in the St. George section of Staten Island. A total of $76 million will finance senior and subordinate permanent mortgage loans for the rehabilitation and preservation of this development, which includes 454 units that will be affordable to households at or below 80% AMI. Proceeds from the loans will fund the rehabilitation of the two buildings to correct deteriorating conditions in these aging properties, while ensuring that the developments remain in the Mitchell-Lama program for the term of the new mortgage.
In total, the HDC Board voted to authorize $842 million in bonds, including $680 million in Sustainable Neighborhood Bonds to be priced on or about June 15, 2015.
About the New York City Housing Development Corporation (HDC):
HDC is the nation’s largest local 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. Since 2003, HDC has financed more than 120,000 housing units using over $13.7 billion in bonds, and provided in excess of $1.6 billion in subsidy from corporate reserves. HDC has been the #1 issuer in the nation of mortgage revenue bonds for affordable multi-family housing in each of the last three years on Thomson Reuters’ annual list of multi-family bond issuers. HDC again achieved this distinction despite issuing bonds for only one city, compared to the statewide jurisdictions of the other ranked agencies. For additional information, visit: www.nychdc.com.
