The Community Development Trust (CDT) and its partners in the Permanent Affordability Commitment Together (PACT) Renaissance Collaborative (PRC), working in conjunction with the New York City Housing Authority’s PACT program, have completed upgrades and repairs to more than 1,700 apartments in 16 affordable housing developments in Manhattan.
CDT President and CEO Joseph Reilly said the REIT is “enormously proud to complete this transformative project, directly improving the lives of thousands of residents and preserving a critical affordable housing resource for New York City.”
Improvements to the apartments include new bathrooms, kitchens, and flooring, as well as replacements of heating systems and full elevator rehabs, and are expected to improve the quality of life for more than 2,900 low-income residents. All of the work was carried out with residents in place.
CDT was one of six partners in the PRC, which also included Community Preservation Corp. (CPC), Monadnock Development LLC, Lemor Development Group, Kalel Holdings LLC, and the Community League of the Heights (CLOTH).
Michael Lear, CDT’s chief business development officer, said CDT and its partners engaged with public and private financing partners over a lengthy predevelopment process to raise the funds necessary to undertake the renovation.
In addition to jointly bringing $34 million of its own equity, CDT and its partners raised $359 million in debt from Wells Fargo/Fannie Mae and the New York City Housing Development Corporation (HDC).
The rental income achieved through the federal government’s rental assistance demonstration (RAD) conversion program was sufficient to support the debt and equity financing, Lear said, and fund the extensive renovations. “Importantly, no local or state subsidy capital was required to supplement the private funds to finance the renovations.,” he noted.
According to Lear, the rehabilitation scope and scale of the New York City project is significantly deeper than most other projects in which CDT has historically invested equity. Typically, CDT invests its long-term, mission driven equity to acquire and preserve existing, stabilized affordable housing assets that may need moderate capital upgrades or systems work, but typically do not require extensive renovations at the time of acquisition.
“The renovations have been transformative, resulting in immediate and substantial quality of life improvements for current and future residents and ensuring that these invaluable public housing resources remain quality affordable housing serving New Yorkers for the future,” Lear said.
CDT continues to work on other transactions with members of the PRC and welcomes opportunities to work with other partners elsewhere in the United States on “similarly transformative and sustainable projects that meet CDT’s mission and economic returns to effectuate impact at scale,” Lear added.