Adler outlines project financing structure and Article XI tax exemption
Adler explains the financing: HPD city capital at $500,000-$700,000 per unit with no debt for 40 years, the Article XI tax exemption, $1 acquisition cost per building, a state Affordable Housing Corporation grant, and a state electrification grant. She notes the 40-year regulatory agreement with options to extend.
Next slide, please.
The typical financing for a co-op project looks like the following.
HPD, through what's known as city capital, makes up the majority of the project sources.
We budget for about $500,000, $700,000 per unit of city capital to make up for this.
This comes with no debt and no interest payments for 40 years.
This is the purpose of the Article 11 tax exemption that we're going over here.
The materials provided in the package show the numbers on why this is necessary for the success of the building.
Also, after that 40 years, building tenants have the option to re-up their regulatory agreement with the city to ensure continued affordability of their units.
If they choose to do so, then the Article 11 continues extending as long as they do so.
To ensure, again, that level of success for the building and the project, we subsidize the acquisition cost to $1 per building and land.
That's $4 for the total project.
We also receive a grant from the New York State Affordable Housing Corporation.
Excuse me, sorry.
That's provided by the state.
It's not repaid as long as these units stay affordable for about 10 years.
The city, of course.
has a longer regulatory agreement that ensures that there are more consequences if these don't remain affordable for that 40 years.
We're also including a ready grant from the electrification process I described before.
That's provided by the state and, again, is not repaid.