The Daily Dirt: New fund for minority affordable housing developers

The city needs affordable housing, and a new program aims to help minority developers build it. 

The program would provide up to $50 million in back-stop guarantees to minority-led affordable housing developers, with $25 million coming from Goldman Sachs and the other $25 million from the city’s Housing Development Corporation.

The program, to be managed by the Community Preservation Corporation, is expected to help fund up to 10 projects totaling 2,000 units, according to Deputy Mayor Maria Torres-Springer. She hopes it will help leverage $500 million in construction financing.

The idea is to alleviate a major barrier for minority-led companies: access to capital. Construction lenders typically require developers to have a certain amount of cash to ensure that they can cover additional costs that arise, as they often do. This means that projects of a certain size are closed off to many companies, unless they bring on a better capitalized partner.

“It means not having to go to another partner that takes 51 percent of the deal,” Adolfo Carrión Jr., head of the Department of Housing Preservation and Development, said during a press conference Monday. “This is about equity, but it is fundamentally about being able to fairly finance these deals.”

The program has limitations. Developers must demonstrate “a strong development track record and a demonstrated need for the capital” to be eligible. Also, developers who draw on the backstop funds have to pay them back.

Still, Ericka Keller, of Brisa Builders, said the fund could be a “game changer,” opening up larger development opportunities for minority-owned companies like hers. During Monday’s press conference, she cited the adage “pull yourself up by your bootstraps.”

“To do that, you have to have a boot, and you have to have a strap,” she said.

What we’re thinking about: What do you think will be included in the Assembly and Senate one-house budget resolutions? Send a note to kathryn@therealdeal.com.

A thing we’ve learned: Sen. Jabari Brisport tells me he is pushing for lawmakers to include his broker fee bill in any housing deal. His bill seeks to assign the responsibility of paying a rental broker’s commission to whoever hired the broker. A similar measure has been proposed at the city level.

Elsewhere in New York…

— Gov. Kathy Hochul on Friday signed amendments to a law that broadens the definition of fraud in rent overcharge cases. The amendments tone down a measure that landlords had feared would cause a deluge of rent overcharge cases. “Last year we negotiated a common-sense approach to strengthen New York’s nation-leading rent stabilization laws, and today I’m signing the amendments we negotiated to ensure that everyone, including tenants and affordable housing providers, are protected,” Hochul said in a statement.

— City Transportation Commissioner Ydanis Rodriguez met with state lawmakers Monday, seeking to extend the city’s authority to operate red-light cameras beyond Dec. 1, and to bring the cameras to 10 percent of the city’s intersections, Gothamist reports. State law limits the cameras to 150 of the city’s 13,250 intersections.

— New York City budget director Jacques Jiha said jails to replace Rikers Island will not be ready by the 2027 deadline, City & State reports. “Our administration supports closing Rikers Island under a plan that ensures the dignity, safety, and care for all justice-involved New Yorkers, but it is clear that the plan approved under the last administration created serious challenges for our ability to keep New Yorkers safe,” a City Hall spokesperson said.

Closing Time

Residential: The priciest residential sale on Monday was $25 million for a condominium unit at 432 Park Avenue in Manhattan.

Commercial: The most expensive commercial closing of the day was $16.6 million for three lots in Bergen Beach — 2250 and 2300 East 69th Street and a parking lot — purchased by Turnbridge Equities.

New to the Market: The priciest residential property to hit the market on Monday was $20 million for a 4,000-square-foot townhouse at 21 West 11th Street in Greenwich Village. Sotheby’s International Realty has the listing.

Breaking Ground: The largest new building filing of the day was a 29,000-square-foot residential building at 557 Third Avenue in Gowanus. Permits were filed by Basic Groups. — Matthew Elo