Speaker Menin asks about financial tools explored for Tracy Towers
Menin asks what financial tools HPD explored before the Tracy Towers increase. Phillips explains existing and new HPD capital, that residents don't pay for HPD debt service, and the shelter rent tax reduction helped.
So for Tracy Towers specifically, what financial tools did HPD explore before determining this proposed approximately 30% rent increase?
So there's existing debt on the project, and there's new HPD capital that went into the project, and we'll go in in two tranches.
And the increase that the residents are experiencing is not going to pay for any of the debt service that's related to the city capital that HPD is putting into the project.
So by ensuring that our debt isn't being paid at all by the residents limits the amount of the increase.
Additionally, the shelter rent tax was recently lowered from 10% to 5%, which I think we all know,
which was really helpful to ensure that the increase wasn't as large as it would have been maybe a couple years ago without the lower property tax amounts.