The Real Deal New York

City strikes deal to preserve more than 650 affordable apartments in Manhattan and Brooklyn

Deal gives landlord 40-year tax exemptions at 6 buildings in Williamsburg, LES and Upper Manhattan
By Rich Bockmann | August 15, 2018 01:03PM

Andrew and Charlie Gendron of LIHC Investment Group, 1640 Amsterdam Avenue, and 199 Avenue B (Credit: Apartments and LoopNet)

LIHC Investment Group, one of the largest affordable-housing owners in the country, secured a deal with the city to preserve affordability for more than 650 Section 8 apartments in neighborhoods such as Williamsburg, the Lower East Side and Upper Manhattan.

The city’s Department of Housing Preservation and Development granted Maine-based LIHC Investment tax abatements under the state’s Article XI that puts a new, 40-year regulatory agreement on six buildings, the property owner said.

“This deal will preserve existing affordable housing in neighborhoods where it is under the greatest threat,” said LIHC Investment principal Andrew Gendron.

The agreement maintains affordability for renters earning less than 80 percent of the area median income — or $75,120 for a family of three — at five properties: 384 East 10th Street and 199 Avenue B on the Lower East Side, 1640 Amsterdam Avenue in Hamilton Heights, 1990 Adam Clayton Powell Jr. Boulevard in Harlem and 10 Post Avenue in Inwood.

10 Post Avenue (Credit: Apartments)

In Williamsburg, LIHC Investment will preserve affordability at the 152-unit La Cabana Houses at 391 Lorimer Street for tenants earning up to 50 percent of the AMI, or $46,950 for a family of three.

Gendron added that in the near term, the company plans to secure Article XIs for nine additional properties the company owns, whichw would bring the total number of units preserved to more than 1,850.

The Article XI incentives give property owners tax exemptions of up to 40 years for projects that are at least two-thirds affordable. It comes with deeper affordability requirements than 421a, and became very popular with developers in 2016 and 2017 when 421a had expired.

The regulatory agreement with LIHC Investments is part of Mayor Bill de Blasio’s Housing New York plan, which seeks to create or preserve 300,000 affordable units between 2014 and 2026.

“Now, more than 650 households across the city can rest assured that, despite rising costs, they can afford to remain in their homes for years to come,” said HPD Commissioner Maria Torres-Springer.

The de Blasio administration in July said it had financed 32,116 apartments in 2017, more than two-thirds of which were preservation deals like the ones granted to LIHC Investments. That figure surpassed the previous record set by the Koch administration, according to City Hall.

Meanwhile, LIHC Investments teamed up with Camber Property Group last year to buy a pair of Mitchell-Lama apartment buildings in the Soundview section of the Bronx for $19 million.

LIHC Investment and San Francisco-based Belveron Partners also joined forces last year to make a $900 million bid for the massive Starrett City complex in Brooklyn. The partners filed a lawsuit to try and block the sale of the complex to Rockpoint Group and Brooksville Company, but a state judge rejected the claim.