The two largest issuers of housing bonds in New York approved issuing a total of $942.6 million of taxable and tax-exempt bonds for housing preservation and new development at their respective monthly board meetings yesterday.
The New York State Housing Finance Agency approved nine projects that will use $717.6 million of bond proceeds, of which $522.6 million is tax-exempt and $195 million is taxable.
As part of a strategy announced earlier this year, yesterday the HFA approved three large projects under its "80/20" program that will use private-activity bond volume cap over a three-year period. The 80/20 projects set aside 20% of rental units as "affordable" based on a tenant's income. The HFA also yesterday approved tax-exempt bonds for six smaller projects that include preservation and new construction.
The HFA expects to issue $1 billion of tax-exempt bonds in 2008 through 2010 for seven 80/20 projects. Two of those projects were approved last year, three were approved yesterday and two more are expected to be approved next month.
Approving large deals with multi-year bond issuance schedules maximizes the HFA's allocation of bond cap from the state, said HFA president and chief executive officer Priscilla Almodovar.
"This allows us to manage volume cap in a way that lets us do the most deals," Almodovar said. "These are large projects, so it allows us to recognize that these projects have a construction cycle they don't need all this money in one year."
The agency expects to sell $407.9 million of bonds for all seven 80/20 projects this year, including two still to be approved. The HFA would sell $417.8 million of bonds for those projects next year and $174.4 million in 2010.
The 80/20 projects approved yesterday include: a 835-unit, $390 million housing project to be developed by Rockrose Development Corp. at 505 West 37th St. in Manhattan; a $94.5 million project at 350 West 37th St. in Manhattan to be developed by Lalezarian Developers Inc.; and a $137 million, 365-unit project at 80 DeKalb Avenue in Brooklyn to be developed by Forest City Ratner Cos. These developments will use a combination of tax-exempt bonds and other financing.
Meanwhile, the New York City Housing Development Corp. yesterday approved $225 million of taxable and tax-exempt bonds for 16 developments. Six of those projects will use $90 million of tax-exempt bonds to build 704 units of affordable housing in Manhattan, Brooklyn, Queens, and the Bronx.
Nine projects will utilize $120 million of bond proceeds for low-income housing developments in the Bronx and Brooklyn. And finally, HDC approved $15 million of taxable bonds to preserve the affordability of a 431-unit cooperative at 157-10 River Drive in Manhattan.