Spigot Turned on (Briefly) for Tax-Exempt Bonds

The Spitzer administration forwarded another $100 million worth of tax-exempt bonding authority to the New York City Housing Development Corporation today, enabling the financing of another thousand units in the Bronx and Brooklyn. The news comes more than a month after the HDC used up all of its available volume capacity and at a time when demand for tax-exempt bonds, administered both by the HDC and the state Housing Finance Agency, is outstripping supply.

The $100 million, according to the HDC, will help finance the 400-unit, middle-income Boricua Village in the Bronx; a 63-unit, low-income building at 2065 Morris Avenue; and Ocean Gate, a 542-unit Mitchell-Lama building undergoing renovations in Brooklyn.

That still leaves about $400 million worth of other projects ready to go this year but unfunded. It is unclear how much Albany still has on hand that it can funnell down to Gotham for that purpose.

Release below.

For Immediate Release:

The New York City Housing Development Corporation (HDC) Receives $100 Million in Tax Exempt Bonding Authority from New York State


Several key projects can now move forward


New York, N.Y., July 23, 2007 – The New York City Housing Development Corporation (“HDC”) today announced that it was allocated $100 million in private activity volume cap by Governor Spitzer. The financing which is earmarked for the construction and preservation of developments in HDC’s existing pipeline will create over 1,000 units of affordable housing.

"Private activity bonds represent a critical source of low-cost financing to get much needed affordable housing built in New York City," said Governor Eliot Spitzer. "When used to finance affordable multifamily rental housing, New York State gets to better leverage this valuable resource."

"Over the next two decades as our population grows by nearly a million residents, HDC financing will help us meet our affordable housing needs," said Mayor Michael R. Bloomberg. "The State has demonstrated a commitment to helping us achieve our goals by allowing this volume cap, which will directly finance 1,000 needed units of affordable housing."

“The most important element of our work is our ability to issue tax-exempt debt and therefore would like to thank the state officials for acknowledging this and are thrilled to be receiving this much needed volume cap,” said Emily A. Youssouf, president of HDC. “Our strong partnership between the City and State is a key component in enabling us to create affordable housing throughout the five boroughs of New York City. All of New York benefits from this coordination”

The financing provided by HDC is in the form of low-cost mortgages made by pooling the proceeds of the sale of tax-exempt and taxable bonds with money lent from its corporate reserves. These mortgages are provided to developers for the construction and preservation of affordable housing. HDC programs are designed for multi-family rental housing and cooperative developments and serve a wide range of income segments, from very-low to middle-income tenants. Spigot Turned on (Briefly) for Tax-Exempt Bonds