OCTOBER 31, 2016
BY RAYNA KATZ
NEW YORK CITY—The Community Preservation Corp. and Goldman Sachs have announced the creation of a $70 million loan facility to finance projects that create opportunities for affordable home ownership for moderate-and middle-income households here.
The facility will finance construction loans for developers who receive subsidies from the NYC Dept. of Housing Preservation and Development for the construction and rehabilitation of up to 350 affordable home ownership units over the next 18 months throughout the city.
The majority of the homes are located in the Bronx and Brooklyn—which have the second and fourth lowest rates for homeownership of any county in the United States, respectively—and include a mix of one- to three-family homes and small apartment buildings. The facility is financed with 30% of its capital from CPC and the remaining 70% from Goldman Sachs.
“While New York relies heavily on its rental housing stock, it’s critical that we also focus on building opportunities for affordable homeownership in the city,” says Rafael Cestero, president and CEO of CPC. “Affordable homeownership has often helped to lay the foundation for stability and subsequent revitalization in underserved communities in the South Bronx, Harlem, Brooklyn, and elsewhere throughout New York. I thank our partners at Goldman Sachs for their investment and for their confidence in CPC’s ability to bring private capital to projects that will make an impact in our city’s communities and the lives of the future homeowners.”
“The ability to own a home can be a game changer, especially for moderate- and middle-income families,” adds Margaret Anadu, Goldman Sachs managing director, who leads the Urban Investment Group. “Creating that opportunity is a crucially important part of the revitalization of underserved communities. As such, affordable for-sale housing has always been a priority of our work, and we’re incredibly proud to continue working with CPC to help more households in New York City attain what is a cornerstone to achieving economic prosperity.”
“Housing New York [Mayor Bill de Blasio's affordable housing plan] commits to finance the creation and preservation of affordable rental and homeownership opportunities for 200,000 hardworking New York households,” says HPD commissioner Vicki Been. “We are proud to have partners in the private and nonprofit sector who understand the importance of leveraging their resources to help us accomplish a shared mission of strengthening and stabilizing New York City’s neighborhoods through affordable homeownership. My thanks to CPC and Goldman Sachs for their continued partnership and dedication to creating a more equitable and affordable city.”
While New York is and has historically been a city of renters, studies have shown that homeownership can help provide stability to underserved and growing neighborhoods as the homeowners build equity in their homes and put down permanent roots in the community. According to the NYU Furman Center/Citi Report on Homeownership & Opportunity here, NYC is well below the national average with only 25% of moderate-income households owning their homes as compared to 58% nationwide.
Projects eligible for loans through the CPC and Goldman Sachs affordable homeownership facility must receive subsidy through one of HPD’s affordable homeownership programs, including the New Infill Homeownership Opportunity Program.
NIHOP subsidy promotes the construction of new homes affordable to New York City’s workforce community. NIHOP’s preference is given to projects with one-third of the units affordable to households earning up to 80% to 90% of area median income. Once completed, the homes are sold to families who agree to occupy the home for 20 years.