Developers want to build senior housing under a new city program. They say HPD is holding them up

The agency says these proposals are unsolicited

TRD New York /
Mar.March 11, 2019 12:30 PM

AIRS allows developers to increase the scale of their projects if they dedicate a portion of their projects to seniors. (Credit: iStock and Pixabay)

Confusion is mounting over a three-year old city program that offers developers density and height boosts in exchange for setting aside housing for seniors in their buildings.

Affordable Independent Residences for Seniors, a program launched as part of the Zoning for Quality and Affordability text amendment in March 2016, allows developers to increase the scale of their projects if they dedicate a portion of their projects to seniors. The issue, according to developers and real estate attorneys, is that the city’s Department of Housing Preservation and Development hasn’t approved privately financed projects proposed for the AIRS program.

Alvin Schein, partner at Seiden & Schein, said HPD is holding off on accepting applications because it wants to change the income threshold for such projects. Under the city’s zoning resolution, units must be reserved for residents making at or below 80 percent of the area median income.

“HPD’s view is that 80 percent AMI is too high for seniors to afford,” he said, noting that his firm is currently working on at least five potential mixed-use projects for which developers are hoping to participate in AIRs. ”If they force AIRS AMI’s down to 60 percent or lower, then AIRS for privately financed buildings would be an empty program, and non-subsidized developers might as well do something else.”

According to HPD, the agency has closed on a number of projects under ZQA but has received “unsolicited requests for standalone regulatory agreements on projects not subsidized by HPD.” In those cases, the agency is reviewing the applications.

Matthew Creegan, a spokesperson for HPD, wouldn’t say whether or not the agency is specifically looking to change the AMI rules but said the agency is “reviewing the requirements of the Zoning Resolution with the other relevant agencies.”

“We are working diligently to secure the affordability of more housing that effectively serves this city’s seniors, who are some of the most vulnerable New Yorkers, wherever possible,” he said.

Schein said AIRS was intended for non-subsidized, mixed-income buildings — to lower the income threshold would take the wind out of the program. He noted that many developers would likely instead opt to participate in other programs that are publicly subsidized if the AMI requirements under AIRS are changed. For instance, the Senior Affordable Rental Apartment program provides gap financing in the form of low-interest loans.

One developer said HPD hasn’t provided guidance as to when it will accept applications nor how it plans to change the program’s AMI requirements. Meanwhile, the source said, projects that were banking on the program — as it’s currently portrayed in the zoning resolution — are left in limbo.

“To pull the plug on existing buildings that have business plans [according] to something that’s already in effect, that’s an abuse of power,” the developer said.

Another development consultant said HPD is wrongly requiring developers to obtain regulatory agreements — to guarantee the income and age restrictions of the units — before being issued permits for AIRS units. He said the restrictions are already adequately built into the zoning resolution’s language. On top of that, HPD hasn’t released a term sheet for regulatory agreements for the program, meaning developers can’t move forward with their projects with a guarantee of being able to participate in the AIRS program.

“It’s hard to see the benefit of keeping potentially affordable units out of circulation,” he said.


Related Articles

arrow_forward_ios

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

Brokerage firms are strategizing ways to make up losses after the cost of application fees was capped at $20. (Credit: iStock)

Brokerages on rental application fee cap: “It hurts”

Alex Rodriguez (Photos by Guerin Blask)

A-Rod is coming for NYC and SoFla real estate

There will be 70 agents based at the new office (Credit: iStock)

Compass opens Long Island City office as new-development sales surge

The Daily Digest - Tuesday

New life for Toys “R” Us, Masa Son is “embarrassed” with the Vision Fund: Daily digest

Nooklyn CEO Harley Courts (Credit: iStock)

Brokerage slashes agent commissions, delays payments after rent law change

The Daily Digest - Tuesday

NYC apartment prices hit 4-year low, Pacific Park developers reveal new plans: Daily digest

LeBron wanted it and California’s governor signed it. What the college athlete compensation law means to real estate

arrow_forward_ios