It’s no secret that some much needed funding is necessary to a number of New York’s public housing developments. That’s why The New York City Housing Authority is partnering with L+M Development Partners, as well as BFC Partners. In this partnership, though nothing is final, The New York City Housing Authority will sell a 50% stake in six Section 8-subsidized developments. BFC Partners and L+M Development Partners will invest $100 million in renovations on the property, reported by the Wall Street Journal.
You’re probably thinking exactly what we are. It looks like The New York City Housing Authority will benefit the most from this deal. They would initially net $150 million from the buy-ins of L+M and BFC, in addition to $100 million over the next two years and $100 million over the next 15 years.
However, and herein lies the catch, L+M and BFC, over the course of the next 30 years, will be able to sell tax-exempt bonds and federal tax credits. After 30 years, the apartments could technically be converted to market rate. This is because when the developers upgrade the apartments, they’re able to receive the difference between market rate rents and the rents that tenants pay from the federal government, equivalent to 30% of income.
This strategic deal will aid The New York City Housing Authority in closing its deficit while the apartments receive renovations. The housing projects included are Campos Plaza, East 4th Street Rehab, Saratoga Square Houses, Milbank-Frawley Houses, East 120th Street Houses, and Bronxchester Houses. $80,000 will be invested in each of the 900 apartments across the six buildings. Improvement plans include kitchen and bathroom renovations, as well as building facades and public areas.
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