Q&A
HPD representatives clarify the bill's impact on affordable housing projects and HPD's budget
0:47:35
·
3 min
HPD representatives Ahmed Tigani and Lucy Joffe explain the bill's impact on affordable housing projects and HPD's budget, addressing Council Member Brewer's concerns about the differences between for-profit and non-profit developers.
- They clarify that the bill's financial impact would be similar for both for-profit and non-profit developers, as it affects HPD's subsidy allocation.
- The discussion covers administrative challenges and additional costs that all developers would face due to the bill's requirements.
- HPD emphasizes that the legislation primarily focuses on HPD's portfolio of mostly or entirely affordable projects, regardless of the developer type.
Ahmed Tigani
0:47:35
I'm sorry.
0:47:35
So I think one thing that we we mentioned earlier is that ultimately if it's a for profit or even it's a nonprofit, which in them you know, these themselves would see some of the same issues with finding general contractors, some contractors, especially in the operation, admin and back end side.
0:47:53
The money would still come out of HBV, so the cost and impact of $500,000,000, the loss of units regardless of who the entity upfront is.
0:48:02
Would still be the same.
0:48:03
So our build our requirement to have to think about the trade offs, sustainability, depth of affordability, wages, etcetera, would still be there.
0:48:12
And then in addition, you know, you have nonprofits, but then like the 4 products for profits would have to think about it from the operational admin side.
0:48:21
They would have to create a new structure to follow the the wage reporting regimen.
0:48:26
They would have to figure out the back end services, the compliance requirements, the oversee general contractor, the subcontractor bidding.
0:48:32
So there would be additional costs that they would have to absorb that they may.
Gale A. Brewer
0:48:35
Who's they now?
0:48:36
We're talking about
Ahmed Tigani
0:48:37
the full
Gale A. Brewer
0:48:37
profit.
0:48:37
I don't care about the
Ahmed Tigani
0:48:38
full profit.
0:48:39
So the so we're everything that I said will also apply to a, you know, a a non for profit affordable housing developer from the administrative side.
0:48:46
And then the lack of of subsidy availability, the deal with all of the things we need, will apply also to nonprofit affordable developers because it's HPD subsidy that would be that we're talking about.
Gale A. Brewer
0:49:00
Okay.
0:49:00
I don't really understand I'll be honest with you.
0:49:03
What I'm trying to say is so you don't see the difference between the nonprofit who bills only affordable and the nonprofit who bills afford who bills affordable because they made more money that way.
Ahmed Tigani
0:49:14
So then I would say that the 4 if you're talking about 4 profit doing mixed income Yeah.
0:49:18
Mixed
Gale A. Brewer
0:49:19
income.
0:49:19
Yes.
0:49:19
Yeah.
Ahmed Tigani
0:49:19
So then I
Gale A. Brewer
0:49:20
don't care about that.
0:49:21
They should go with this.
Ahmed Tigani
0:49:22
So in 45x, in those areas that would require it, we see a $40 than the wage.
0:49:28
We see building service workers there are union.
0:49:32
We see the other requirements that come with the bill, and that's because the market rate units in those areas that meet those requirements in the 45x, they can support paying the higher wages.
0:49:43
Right.
0:49:44
Yes, there there is a different
Julie Menin
0:49:45
thing.
0:49:45
Right.
Lucy Joffe
0:49:46
In this legislation, as we understand it, and as we modeled for purposes of saying, this is how much we think this was cost, and these would be the impacts, is focused on HPD's portfolio of almost entirely a 100% affordable or mostly affordable projects.
0:50:01
So we shrink the universe there as a starting point.
0:50:03
And then when we talk about who is a developer on the other side of it, that is where we start talking about the fact that when the costs increase on these projects associated with wage requirements.
0:50:13
That's when HPD fills in more money to make sure it still can happen.
0:50:18
So it's not about whether or not there is a difference between we see what you mean in terms of different types of projects.
0:50:24
But in terms of who was on the other end of it, we're still talking about the impact on HPD's budget.
0:50:29
And in a budget constrained environment, what choices that's going to cause us to be have to make?
Gale A. Brewer
0:50:35
I don't know.
