Q&A
HPD's discretion and considerations in selecting properties for the TPT program
1:05:59
·
3 min
Deputy Commissioner Darga explains HPD's approach to selecting properties for the Third Party Transfer (TPT) program, highlighting the factors they consider when determining the number of properties to include in each round.
- The selection process involves eligibility criteria and indexing, with flexibility in determining the cutoff point
- Factors influencing the decision include historical redemption rates and the city's capacity to stabilize transferred properties
- The potential costs to the city, including renovation and stabilization expenses, are considered when determining the program's scope
- Changes in overall property conditions and debt levels may affect the ideal number of properties to include in future rounds
Christie Peale
1:05:59
So I hopefully not 2,000,000.
Kim Darga
1:06:00
So the methodology would be the same.
1:06:02
Right?
1:06:02
You have eligibility and then you do the indexing.
1:06:05
The question is, do you cut off at 250 buildings?
1:06:09
You cut off at 400?
1:06:10
500?
1:06:11
Were you cut off at a moment in time?
1:06:13
I think that is a what we decide is a function of a couple things.
1:06:20
First, what do we know about redemption rates?
1:06:25
Right?
1:06:26
So right now, I mentioned we we don't really know how those are gonna change.
1:06:32
Historically, right, the the city invest a fair amount of resources in this program and the stability of the housing that ultimately is transferred.
1:06:41
Not only do we support neighborhood restore, but we also invest when the buildings are transferred in renovations and stabilization.
1:06:53
In the last round of TPT round 10, that was over a $160,000 per unit.
1:07:00
In city capital funding to make sure the buildings are in good condition along with tax exemptions and other assistance as needed.
1:07:08
So if the redemption rate flips and we end up transferring 80 or transferring 80% of the properties instead of 80% redeeming, the potential cost of the city could be very, very different.
1:07:23
And so we have to know that when we start an action that we're gonna be able to actually stabilize the housing.
1:07:32
Right?
1:07:32
That is one of the main goals here.
1:07:34
So we wouldn't want to set up a program where we thought that that was in question.
1:07:40
So I think that's number 1.
1:07:42
I think 2, we know the characteristics of the top 500 today, right, if we run the data now based on 2024 data.
1:07:54
Well, we don't know.
1:07:55
We haven't had a TBT action.
1:07:57
We haven't had tax lien sale in a few years now.
1:08:01
Are we looking overall at buildings that are much worse than they would if we had regular tax enforcement happening through those programs?
1:08:12
And so, you know, right now, like, it's over a mill about a $1,000,000 per property.
1:08:20
Let's say we do around and, you know, in 2 years, we're gonna do another one.
1:08:26
And the average debt for properties is 500,000.
1:08:32
Do we want 500 properties then, or do we think that maybe it's not targeting the right universe if we go with full 500?
1:08:39
And we have to go with a narrower universe of properties in order to for this to focus on the properties where it makes the most sense.
1:08:49
Right?
1:08:49
So I think we're just This is a really significant change in the program, and I think we need to be able to monitor, and we need to make sure that over time as property conditions change, that we are able to use the program for the right set of properties.
