NYC Issues Term Sheet for Privately Financed Affordable Senior Housing
Written by Claire Altman, Executive Vice President, Capalino, and Woody Victor, Senior Vice President, Capalino
We are pleased to share an exciting development that should spur the development of affordable housing for seniors in New York City. On July 10, HPD issued a Term Sheet which sets forth the guidelines for projects to claim a zoning bonus for providing housing to seniors (over 62 years of age) with household incomes at or below 80% of Area Median Income (AMI).
Over three years ago, the City Council approved the zoning amendments referred to as Zoning for Quality and Affordability (ZQA) which included a number of reforms aimed at incentivizing the development of affordable housing, especially senior housing, reducing parking requirements for affordable housing, and increasing density in certain residential developments. At the time the zoning amendments were proposed, City Planning emphasized the growing senior population in New York, and the need to respond with incentives for senior housing. One of ZQA’s key provisions was the creation of a 20 percent floor area bonus applicable in most zoning districts to encourage the development of affordable housing for seniors.
Referred to as Affordable Independent Residences for Seniors (AIRS), the program was written to facilitate both not-for-profit and privately financed senior housing meeting the AMI and other requirements. Since its adoption, HPD has financed several AIRS projects sponsored by not for profits, but had not put forward an approach to make this “housing tool” available for non-subsidized, privately financed housing developments.
We applaud HPD for issuing Privately Financed Affordable Senior Housing Program Term Sheet making available the provisions of the AIRS statute for privately financed projects.
This program’s key features are summarized below. AIRS developments are likely to result in the creation of thousands of affordable housing units for seniors helping to meet the Mayor’s goal of 30,000 affordable apartments for seniors. This program incentivizes developers to develop senior housing by providing a 20 percent floor area bonus in exchange for development of affordable senior housing. This program can be used in conjunction with the Affordable New York Housing Program (new 421a), which provides long term tax abatements as well.
HPD’s newly issued Privately Financed Affordable Senior Housing Program Term Sheet (PFASH) has the following key provisions:
- Regulatory agreement with a 30-year term will be recorded against the property
- Projects may be new construction or substantial rehabilitation
- All units in this program must be initially leased and at subsequent releasing to eligible Tenants (62 years of age or older and with household incomes of 80% of AMI or below)
- All units in the program must be registered with the NYS Division of Housing and Community Renewal and are subject to rent stabilization
- Projects must include a minimum of 10 “AIRS” units
- Various provisions re: operating and capital reserves
- Project underwriting must be reviewed by HPD.
Projects may submit PFASH proposals to the Inclusionary Housing Program of NYC HPD to inclusionary@nullHPD.nyc.gov.
Capalino has extensive experience working with HPD’s Inclusionary Housing Unit, and we assist developers with utilizing this program. To learn more, contact Claire Altman at Claire@nullcapalino.com or 212.616.5839 or Woody Victor at Woody@nullcapalino.com or 212.915.9175.
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