New York City Housing Authority has issued a revised Request for Expressions of Interest (RFEI) that could help it raise an estimated $1 billion to help repair its crumbling stock.
Under its new Transfer to Preserve program, NYCHA will sell un-used air rights to developers who control property adjacent to public housing.
Purchasing the air rights will allow a developer to build new projects or enlarge existing buildings while helping NYCHA raise money towards its estimated $30 billion repair budget.
Previously, NYCHA has leased its land to private developers for infill development. Under the Transfer to Preserve program it can still raise money without selling off its land.
Under the Transfer to Preserve program, developers must propose as of right plans to transfer the extra space to their privately-owned parcels.
According to a memo from Fried Frank, the revised program will create a clearinghouse of eligible sites that will allow the housing authority to review more proposals and ramp up the program.
The TTP Program, a developer’s site must be contiguous to the NYCHA site for a minimum of 10 linear feet or the NYCHA site must be located in a “Special District” where as-of-right transfers include off-site transfers.
The RFEI states that NYCHA will evaluate proposals for the TTP Program principally on the amount of revenue generated from the sale of its excess development rights. NYCHA will also consider whether the proposed development benefits NYCHA and the City, the developer’s experience completing similar developments, and how well the proposed development integrates into the surrounding area.
A developer’s proposal does not need to include any affordable housing.
The TTP Program is applicable to any NYCHA site that currently has excess development rights to sell, with two exceptions. One exception is where NYCHA is currently in the process of closing a sale of development rights, and the other is NYCHA Permanent Affordability Commitment Together (PACT) sites that are currently under conversion.
Currently two NYCHA sites have closed or are about to close a transaction for development rights – Hobbs Court in Manhattan and Ingersoll Houses in Brooklyn. A number of other properties are already in the process of negotiating air rights transactions including Fulton Houses, Howard Houses, and College Avenue at East 165th Street.
The air rights transfer plan was originally devised by the Regional Plan Association which calculated that a city Zoning Text Amendment could put into play 78 million square feet of NYCHA’s transferable rights. Selling these rights, the RPA estimates, could yield $4.2 to $8 billion for NYCHA repairs.
The program gives the authority more flexibility than typical property owners in moving Transferable Development Rights around the city. By moving NYCHA air rights across the street, up to a half mile away, or within a Community District, the opportunities for revenue generation increase exponentially.
TPP is a part of NYCHA 2.0, a 10-year plan to preserve public housing and deliver top to bottom renovations for 175,000 residents, fund essential capital repairs across the rest of NYCHA’s portfolio, and launch aggressive new repair strategies to tackle lead paint, mold, elevators, heat and vermin.
NYCHA 2.0 includes Build to Preserve, which will deliver roughly $2 billion in capital repairs through new development on NYCHA land, Transfer to Preserve and Fix to , which will improve services, infrastructure maintenance, and immediately address health and safety issues including heating, mold, pests, and lead.