Chair Sanchez round 2: 420C tax abatement and Mitchell-Lama tools expansion

Talking about a 420C, I always thought it was as a right if you were a LITECH, or not as a right, but it went along with every LITECH deal.

So could you tell us how many LITECH properties do not have a 420C and what scale you would anticipate to reach with 420C?

Yeah, just to be frank, I would want to get back to you with an estimate for that.

I think we were a little surprised, too, that this was sort of a tax abatement that was available that hadn't been fully utilized by some of our partners.

So we've started to do some analysis.

My colleague Adam, my first deputy commissioner, has been really sort of digging in on what is the universe and how do we match it up to the groups that we're hearing from directly who are interested in tools.

But if you'll allow it, I'll have to get back to you with a projection on what is the total universe.

Thank you.

Make a note here.

And then with respect to tools again, and specifically the eviction prevention side of it, bringing into the public a conversation that you and I started, Commissioner,

the use of tools for Mitchell-Lamas or HDFCs.

Do you have an update for us in terms of helping to stabilize those properties?

I do.

It's not much different than the update we just exchanged last week.

But generally speaking, we agree that that is actually a missing piece for the Mitchell-Lama, particularly co-ops, but not exclusively.

So for the reasons we discussed, you know, co-ops require a specialized type of assistance that is really, I think, best put forward by groups like UHAB, possibly others like Habitat, who really specialized in that.

So I think, and that's not to say that Enterprise and LISC and the Housing Partnership couldn't also provide that technical assistance, but I think we're looking specifically at expanding the TA providers for a tool-type program for Mitchell-Lama

that would include groups like UHAB, and there's another organization that we're talking to who I think really has an understanding of the asset management challenges that Mitchell-Lamas are going through.

They're a little different than the existing HPD subsidized stock.

They don't tend to have these reserves, right?

And they have different– an Article 2 is different than an Article 11.

So there's probably a different– universe of strategies that we need to deploy for Mitchell Lama.

But to be frank, your point was well taken when you raised it for Kingsbridge.

And I think we are now looking to see if we can come up with a comparable early upstream intervention to help Mitchell Lamas.

Many of them we know are going to need a big capital investment and we're prepared to make those investments.

But I think

I think these are good strategies to deploy on the way.

Thank you.

So would you anticipate that there are going to be additional contracts with those technical assistance providers?

I do think we will need new contracts to bring on the co-op specialists.

With respect to the loans that are described in that tool section, why would an owner take advantage of a city loan for operating expenses if they have no guarantee that new revenue would come to pay back that loan?

I want to make sure I understand the question.

So are we talking about a preservation loan?

The tool section makes mention of making more financing available to these owners.

Why would they take advantage of more financing if they are worried about collecting?

Yeah, well, generally, if we're talking about capital investment financing, and they're coming in because they have deferred capital needs and they need to be addressed.

And obviously, HPD, when we're financing a project, is on very, very favorable terms, right?

Often no or low interest with, you know, flexibility on term.

So we certainly wouldn't advise that any of our not-for-profit partners recapitalize unless it's necessary and unless we can see that the cash flow will be sufficient to pay back those loans.

But I would say tools isn't primarily as focused on making capital loans as...

it is on accessing existing resources, including their own building reserves, and having flexibility with those reserves to look across their own portfolio,

and also to just frankly to make it not so challenging to work with, you know, it takes frankly too long for HPD to receive those requests, process those requests, so part of the tools initiative is to say this should take no more than 30 days.

Thank you.