HUD, NYS, and NYCHA Kick Off Construction for $560 Million in Upgrades in Largest Rental Assistance Demonstration Nationwide
The U.S. Department of Housing and Urban Development (HUD), New York State Homes and Community Renewal (www.nyshcr.org/), and the New York City Housing Authority (www.nyc.gov/nycha) announced $560 million in federal, state, city, and private investment in NYCHA's Ocean Bay (Bayside) Apartments to finance essential infrastructure upgrades, support state-of-the-art resiliency and security systems, and the renovation and preservation of the public housing complex that is home to nearly 4,000 residents in Far Rockaway, Queens. This is NYCHA's first conversion under HUD's Rental Assistance Demonstration (RAD), which allows housing authorities to access private capital to meet capital needs while also protecting long-term affordability. Permanent Affordability Commitment Together (PACT) is New York City's implementation of RAD, which includes collaboration between NYCHA, residents, the community and housing advocates.
The 24-building, 1,395-unit Ocean Bay (Bayside) Apartments complex is home to nearly 4,000 New Yorkers, providing vital affordable housing for low-income New Yorkers. Completed and first occupied in the early 1960s, the aging development was already facing critical maintenance needs and a deteriorating infrastructure before suffering extensive damage from Superstorm Sandy including flooding and the destruction of the central heating plant. To this day, the complex relies on temporary boilers. Some of the more notable renovations needed include roof replacements, complete upgrade of elevator machinery and equipment, new boilers and heating systems. The development is located along Beach Channel Drive between Beach 54th and Beach 58th streets in Far Rockaway.
The total development costs are $560 million, including $213 million in New York State Housing Finance Agency (HFA) tax-exempt bonds, and $170 million in Low-Income Housing Tax Credit Equity. A further $1.1 million was secured via the Investment Tax Credit (ITC) generated from solar. All 1,395 of the apartments will be covered under a new, Project-Based Section 8 Housing Assistance Payment through the HUD RAD1 program. Citi provided the construction loan and permanent financing and Richman Housing Resources syndicated the LIHTC. The Ocean Bay (Bayside) restoration marks NYCHA's first RAD project and the largest single-site RAD transaction in the country. RAD allows public housing authorities to shift apartments funded by HUD's Public Housing program (under Section 9) to a long-term contract under Section 8 that provides the stability to attract new investment. RAD preserves the strong tenant protections of the public housing program, and restricts resident rent to no more than 30 percent of income. The program also guarantees permanent affordability through mandatory contract renewals, and preserves NYCHA's ownership interest in the property.
Beyond upgrading building infrastructure and amenities, the project will include the implementation of a comprehensive social services framework, designed to empower this community to live fuller, healthier lives and reach their full potential. Catholic Charities Brooklyn and Queens (CCBQ) will provide social services tailored to the needs of residents of the Ocean Bay community. CCBQ has provided services in the Rockaways for many years and currently operates over 160 programs including programs for seniors, children, families, and young adults. Ocean Bay Community Development Corporation has already helped to drive job creation in the local community by providing residents with job opportunities over the course of the project, while paving the way for long-term relationships and potential full-time positions. Wavecrest Management and MDG subcontractors have committed to hiring 40 NYCHA residents over the course of the project, and are on track to surpass that number.
Delivering remarks at the construction kickoff, Deputy Regional Administrator Mirza Orriols outlined the features of RAD the ensure permanent affordability, and hold both public and private stakeholders accountable for delivering results to residents. She also noted RAD's incredible results nationwide: $19 in additional investment have been leveraged for public housing for every dollar of HUD funding. To learn more, visit hud.gov/rad.
|Content Archived: January 11, 2019|