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Rent amnesty agreements and financial arrangements in RAD/PACT conversions
2:25:03
ยท
5 min
Chair Banks and NYCHA officials discuss the details of rent amnesty agreements and financial arrangements in RAD/PACT conversions.
- After conversion, all rent payments go to the developer, not NYCHA
- Rent amnesty decisions are made in collaboration between NYCHA and the PACT partner
- The decision to offer amnesty is based on project financing
- Some developers 'buy back' the debt owed to NYCHA as part of the conversion process
- NYCHA avoids promising specific outcomes during community engagement to prevent setting unrealistic expectations
Chris Banks
2:25:03
Just before we conclude, the testimony from the administration or from the authority, just wanna piggyback off of some of the comments that my colleague made, Councilman Bacha, and just get some clarification on stuff.
2:25:19
The Is it also I know this happened in Linden Houses.
2:25:24
There was a rent amnesty given to the to the residents.
2:25:29
To pry a little deeper, is it has it been done in some of the other developments where there has been no rent amnesty?
2:25:38
And what percentage of the rent is is collected that goes to NYCHA and the management company keeps or the new developers keep?
Annika Lescott-Martinez
2:25:50
So once the development is converted NYCHA does not receive any of the rent.
2:25:55
The rent payments going forward all go to the developer and to your point, yes the strategy with regard to how they treat rent arrears is determined by the developer and the you know that particular transaction and so there are cases where they might offer no partial or full, you know, amnesty as you
Chris Banks
2:26:14
call You gave testimony in the past that so there was agreements that were made between the authority and somebody's RAD PACT where NYCHA will get a portion of the rent.
2:26:28
Over Over years.
2:26:29
Well, there's no different rent going on.
2:26:31
Whatever's in arrears.
2:26:32
Where what developments has that type of agreement been agreed to and can you provide us with with any numbers as far as how much rent has been collected?
Annika Lescott-Martinez
2:26:45
Sure.
2:26:46
We can certainly provide statistics for the converted developments and how the arrears were treated.
Chris Banks
2:26:51
Okay.
2:26:53
The amnesty that was is is that also part of the conversation when the conversions are taking place?
2:27:03
Is is is that a recommendation that is made by NYCHA to to to give a rent amnesty to the to the residents?
Lisa Bova-Hiatt
2:27:13
With respect to amnesty for rent arrears, it's not a partner only decision, but it's made in collaboration with NYCHA.
Chris Banks
2:27:23
It's okay.
2:27:24
And and and those when it's the community engagement process is taking place, is is is that also included in the conversation to the residents that there's possibly that it possibly can be a a a amnesty given for rent?
Lisa Bova-Hiatt
2:27:39
Well, if
Chris Banks
2:27:40
Or those scenarios set up where we may
Lisa Bova-Hiatt
2:27:43
I I'm not sure whether or not that is something that's discussed because the decision about rental arrears is based on project financing.
2:27:53
So I think that's a decision that's made between our PACT partner and our red team, our real estate team.
Chris Banks
2:28:01
So when a PACT developer makes a decision to give a give amnesty, I've I was told that by one of one particular developer that they did it just to kinda clean the slate.
2:28:22
So that that doesn't seem to be something that's consideration as far as the financing goes.
Lisa Bova-Hiatt
2:28:28
Well, I would think that they could only clean the slate if the the the numbers add up.
2:28:32
I mean right?
Chris Banks
2:28:34
Well, I mean, obviously, some of those developments, there there have been high rent delinquencies in some of those developments.
2:28:39
Right?
2:28:41
To to your knowledge, Brian, there any particular developments that you know where there's been a high rent delinquency that has been converted over where there's been a complete amnesty given?
Brian Honan
2:28:54
Yeah.
2:28:54
There are several, and we can get you to developments where they have where they have bought back the debt.
2:29:02
And so there is a financial right?
2:29:04
There is it does weigh into the finances of the final deal because they're not just forgiving.
2:29:11
They are buying back the debt, you know, so the debt owed.
2:29:15
So, in our engagement, we don't usually like to mention this because we don't want to promise something that may not happen.
2:29:23
Right?
2:29:24
We do the same thing too when people ask for, like, the scope the final scope.
2:29:29
People often think that we're withholding information.
2:29:31
We're certainly not.
Chris Banks
2:29:32
Right.
Brian Honan
2:29:33
But we know that it's a long process, and I don't wanna be there and say, we're gonna promise everybody new x, or we're gonna promise everybody
Chris Banks
2:29:44
Then you promise everyone new refrigerators and new and new new floors and Right.
2:29:51
Painted.
2:29:51
Okay.
Brian Honan
2:29:51
But there are some things that are we know for sure, like people are gonna get new kitchens and bathrooms.
2:29:57
You know, we know that's gonna be part of the the scope.
2:30:00
We know their security is going to There's some minimums, but when people when there are some extra things, we can't we can't promise them.
Chris Banks
2:30:07
Alright.