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Criteria for determining property suitability for HPD's financing programs
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Council Member Salamanca inquires about how HPD determines if a property is suitable for their financing programs, particularly the Open Door program. HPD officials Kim Darga and Ahmed Tagani provide detailed explanations on the evaluation process for both private and public sites.
- For private sites, developers submit proposals which HPD evaluates based on program alignment and financial feasibility.
- For public sites, HPD considers community feedback, neighborhood plans, land characteristics, and development feasibility.
- HPD also looks at the local real estate market to ensure they're providing affordable opportunities at a significant discount to market rates.
Rafael Salamanca, Jr.
0:58:57
Thank you, madam speaker.
0:58:59
So I have a few questions, and then I'm gonna hand it over to some of my colleagues here.
0:59:05
First question is when a property either city or privately owned becomes available for HPD Development, how do you determine if it's fit for HPD's financing programs, specifically for the open door program?
Kim Darga
0:59:19
So it's a little bit different for public or private sites.
0:59:23
So I'm gonna start with private sites, and then we can talk about the nuance on public sites and Ahmed may jump in there.
0:59:33
So on private sites, it starts with a proposal from the development team.
0:59:38
So, you know, they say we're interested in affordable home ownership or we're interested in affordable rental housing.
0:59:44
They submit you know, the specifics of that project, what they would build, whether it complies with zoning, information about the market, a whole slew of information.
0:59:56
And then we evaluate that, and we look at it into terms of does it align with the program parameters that HPD has, and is it financially feasible?
1:00:07
Those are really the big questions that we are grappling with.
1:00:11
And as I mentioned, just a couple moments ago, You know, one of the things on homeownership that and this is true of rental housing too.
1:00:22
Understanding the market is really important.
1:00:26
So in some markets, the homeownership, there may not be a really robust homeownership market.
1:00:36
There are other parts of the city where it there is.
1:00:38
Right?
1:00:39
And so what is within the market?
1:00:42
How are units being priced?
1:00:45
If we were gonna finance a project, are we going to be financing at a significant discount to market?
1:00:50
Because our goal is certainly to produce affordable opportunities And if the answer is no, it may not actually make sense for us to finance that project.
1:01:00
So that actually does that is a big consideration when we're looking at whether we would provide public assistance.
1:01:10
And I'm sorry, Ahmed, do you wanna talk about public assistance?
Ahmed Tagani
1:01:13
So I think that there are two levels.
1:01:16
1 is when we were looking at a neighborhood plan and we we may have multiple parcels or multiple pieces of land, The feedback that we get from the community and the work and the numbers and the analysis that we do may suggest that we are looking at a number of different housing types we want to deliver both in private and public land.
1:01:32
So whether that be multifamily housing, extra low income, middle or moderate access, senior housing, supportive housing.
1:01:41
We are looking at both the types of housing we're trying to provide, this and then also the characteristics of that plot.
1:01:47
So the size of the land, whether it's encumbered with any technicalities that make it more expensive or difficult to develop on, and then how that relates to term sheets and our ability to subsidize per unit.
1:02:00
So we're looking at both the the qualitative information we get from the community.
1:02:04
The number of parcels, the size of land characteristics of the parcels, and the the numbers as it relates to the develop development feasibility of that land.
1:02:13
The other thing to think about is when you think about those parcels, we've had a lot of success.
1:02:20
Looking at multiple parcels that may be smaller, too small for a successful multifamily project.
1:02:25
But when we put them together in a cluster financing package, you can take you know, 10, 14 individual small lots and build 3 to 4 units co op home ownership opportunities.
1:02:40
And we've done that successfully recently in Brooklyn and together created a 114 home ownership opportunities just in that project.
1:02:47
So we are trying to attack it from every angle.
1:02:50
And I would say, again, looking at neighborhoods where the availability of homeownership versus rental and trying to figure out that balance, especially through the lens of Recent conversations and improvement on our focus on fair housing is a big part of those conversations.