The city’s main real estate trade group is charging that recent agreements with the state Housing Finance Agency gave developers more tax-exempt bonds than the agency’s president had been quoted as saying.
An article in the April 9 Observer paraphrased HFA President Priscilla Almodovar as saying that five developers had agreed to accept between $1.5 million and $1.7 million in bonds to build mixed-income buildings on Manhattan’s West Side. But in a letter to Ms. Almodovar last week, the president of the Real Estate Board of New York, Steve Spinola, wrote that “the statement … is perplexing since it appears that on a weighted average basis it is closer to $2 million per unit.”
The distinction is important because if the state portrays these five developers as willing to build 80-20 projects–so named because 20 percent of the units go to low-income households–with less help from the state, other developers will think they must follow with similarly austere financing plans.
An overwhelming demand for the state’s scarce tax-exempt bonding capacity prompted Ms. Almodovar in February to try to cap the amount of bonds for each affordable apartment at $1.5 million, compared to the roughly $2 million or $3 million that developers had originally asked for.
Ms. Almodovar would not comment on the REBNY letter. The exact arrangements with developers will not be made public for another month or two.
Mr. Spinola said that of the five developers who have so far reached agreements, one will receive $1.5 million in bonding authority for each affordable apartment he builds; another two will get $1.7 million; a fourth qualified for $1.9 million; and a fifth was promised $2 million. Several hundred million dollars of requests are still pending.
– Matthew Schuerman