Mayor Michael R. Bloomberg, Governor George E. Pataki and Lower Manhattan Development Corporation (LMDC) President Stefan Pryor today announced the details of a new plan to reallocate $50 million in federal funding for an affordable housing initiative.  The funds were announced by the Mayor and Governor in May as part of the comprehensive allocation plan for the $800 million in remaining LMDC funds, and the affordable housing component was approved by the LMDC’s Board of Directors at this morning’s meeting.  The $50 million program is funded through a Community Development Block Grant (CDBG) from the US Department of Housing & Urban Development (HUD), and will fund up to 317 new units of housing of which up to 232 will be new affordable units that will benefit low, moderate, and middle-income households.  The program will also rehabilitate and preserve 2,854 units of existing affordable and subsidized housing throughout Lower Manhattan. 
 
 “We are transforming Lower Manhattan into a vibrant and diverse 24/7 community for people to live, work and play, by making investments in much-needed housing in Lower Manhattan communities like Chinatown, Tribeca, and the Lower East Side,” said Mayor Bloomberg. “Affordable housing both in Lower Manhattan and citywide is fundamental to New York City’s long-term economic prosperity and is at the heart of the Administration’s $3 billion commitment to create and preserve 65,000 homes and apartments over five years.  I want to thank Governor Pataki, HUD Secretary Jackson, and the Lower Manhattan Development Corporation for their continued dedication to the housing component of the revitalization of Lower Manhattan.”
 
 “Part of our rebuilding effort has included creating affordable housing opportunities in Lower Manhattan,” said Governor George E. Pataki.  “This program will make it easier for hundreds of New Yorkers who want to settle downtown to find an affordable place to live, build a bright, stable future for their families, while simultaneously revitalizing Lower Manhattan.  I am proud that working together with Mayor Bloomberg, HUD, and the LMDC we will be able to provide more affordable housing options and add to downtown’s thriving residential community.”

  “President Bush and I strongly believe that any vision to revitalize Lower Manhattan must include a plan to increase affordable housing opportunities for working families,” said HUD Secretary Alphonso Jackson.  “I congratulate Governor Pataki, Mayor Bloomberg and LMDC President Pryor for their continued commitment to making Lower Manhattan a very special place to live.”

 “The LMDC is committed to creating a revitalized Lower Manhattan that is diverse and vibrant. Thanks to the support of Secretary Jackson, Governor Pataki, and Mayor Bloomberg, this program will create new affordable housing and preserve over 2,800 precious units all over Lower Manhattan,” said LMDC President Stefan Pryor.  “This new proposal was greatly improved as a direct result of public comments received by the LMDC and is evidence of how engaged the community is in the rebuilding process.  These funds will ensure that families of all income levels will have the opportunity to be a part of downtown’s thriving residential community.” 

 “Building and preserving affordable housing is a key part of our commitment to fostering a dynamic mixed income neighborhood in Lower Manhattan,” said Deputy Mayor for Economic Development & Rebuilding Daniel Doctoroff.  “As well as building new housing for New Yorkers with a range of incomes, this plan will keep hundreds of units of existing affordable housing in a good state of repair and ensure their long-term affordability.”

 The revised affordable housing program will leverage a $50 million grant allocated last year by the LMDC board to provide even more affordable units than the originally proposed program. After the receipt of extensive public comments on the original program, the LMDC, Deputy Mayor Doctoroff’s Office, the NYC Department of Housing Preservation and Development (HPD), the NYC Housing Development Corporation (HDC), and other City agencies worked together to revise the program.
The amended proposal will fund the development and preservation of apartments in five separate projects throughout Lower Manhattan. First, on Site 5B, bordered by Greenwich, West, Murray and Warren Streets in Tribeca, the LMDC will subsidize 77 new affordable apartments for low, moderate, and middle income households. The entire development at Site 5B will be financed by HDC through its Mixed Income Program and will consist of 163 residential units, of which LMDC funds will subsidize 77 units to ensure affordability. Within these 77 units, 33 units will be designated for low-income households and 44 units will be designated for middle-income households. Consistent with HPD and HDC policy, eligible residents within Community Board 1 will receive a preference for 50 percent of all new affordable units.

 The second component of the proposal will provide LMDC funds for adaptive reuse of 4- to 6-story buildings along Fulton Street, to develop residential units above ground floor retail. The program will provide forgivable loans ranging from $25,000 to $75,000 per residential unit to owners of small buildings to renovate upper floor space that is vacant and underutilized. In exchange for receiving these funds, owners must agree to lease the rehabilitated or converted units as affordable housing for tenants with moderate incomes and must maintain buildings with three or more residential units as affordable under rent stabilization regulations. Property owners will also be required to sign a regulatory agreement requiring that the affordable units will be guaranteed for at least 15 years.
 
 The third component of the proposal will fund the creation of the Chinatown/Lower East Side Acquisition and Preservation Grant Program. Using LMDC funds, the grant program will preserve and rehabilitate 160 or more units throughout these neighborhoods. This newly created, City administered program is designed to facilitate the acquisition and rehabilitation of privately owned properties in Chinatown and the Lower East Side. The program focuses on the acquisition of mid-size buildings
(15-40 units) that currently have all or a portion of their units under rent stabilization, where average
rents are below $1,000. Under the program, eligible non-profit, residential property managers and developers will receive up to $100,000 per unit for rehabilitation purposes. The property owners must keep rehabilitated units under rent stabilization for at least 30 years. Additionally, upon vacancy, non-stabilized units must be lowered to the average rent stabilization levels.  Over the next four years, HPD will distribute the $16 million to assist in the acquisition and rehabilitation of at least 160 units.

 The fourth component of the program will provide funds for much needed capital improvements at Masaryk Towers, a 1,110 unit Mitchell-Lama development located on Columbia Street, on the Lower East Side. These funds will have a tremendous impact on preserving the development’s affordability, as many of the residents primarily consist of low-income tenants. Moreover, this investment will preserve the affordability of these units for the foreseeable future, as HPD will require a 15-year regulatory agreement for Masaryk Towers to remain in the Mitchell-Lama program.

 The fifth component will use LMDC funds for system-wide capital improvements at Knickerbocker Village, a 1,584-unit development built in 1934, located on Monroe, Catherine and Market Streets. Knickerbocker Village is a New York State Limited Dividend Housing Company. The capital improvements will benefit all of the tenants living at Knickerbocker Village by decreasing the significant charges that would otherwise have been passed along to the tenants, thereby maintaining the affordability of these units. The capital improvements include system-wide plumbing, roofing, and electrical upgrades. 
 
 Lower Manhattan was the fastest growing residential neighborhood in New York City prior to September 11, 2001.  Immediately following September 11, vacancy rates climbed to over 40% in some areas and the stabilization of the residential base became essential to the revitalization of Lower Manhattan. The LMDC Residential Grant Program funded by HUD contributed significantly to the stabilization of the neighborhood by attracting new residents to the area, encouraging existing residents to remain, and providing increased incentives for two-year lease agreements.  More than half of the residents in the area within immediate proximity to the World Trade Center site are new residents, and Battery Park City has realized higher occupancy rates than at any other time in its history. Residential occupancy rates in Lower Manhattan have now surpassed 95%.
     

 The program was approved by the LMDC’s Board of Directors at today’s board meeting. The $50 million program will be funded through a Community Development Block Grant (CDBG) from United States Department of Housing and Urban Development (HUD).