Ten Years in, the New York City Acquisition Fund is Needed More Than Ever
Creating affordable housing has always been a complex and challenging endeavor. Ten years ago, faced with the rising cost of land in New York City and the growing need for more affordable housing, Enterprise and several partners from the City and public and private sectors came together to create the New York City Acquisition Fund, an innovative tool meant to lower development costs and ensure that the supply of affordable housing continued to grow. Ten years and more than ten thousand affordable homes later, the New York City Acquisition Fund is more important than ever–but its work is far from over.
The Rising Cost of Building Affordable Housing
Throughout the 1980s and ‘90s, thousands of affordable apartments were constructed in New York City at low cost thanks to the availability of cheap or no-cost city-owned land. But after all of these sites were used, affordable housing developers had no other option but to compete with market rate developers for land, a shift that significantly increased development costs. These higher costs represented a threat to the future development of affordable housing in NYC. Conventional buyers, for the most part, did not share the same commitment to the community and to long-term affordability that mission-driven developers did. These developers needed a tool that could help them be competitive in this market.
An Innovative Solution
Out of this challenge came the idea for a fund that would provide loans to affordable housing developers to acquire land. The concept of an acquisition fund brought together foundations, public funding and private investment to offer the kind of flexible terms that mission-driven developers needed. Philanthropic organizations agreed to provide significant seed capital and in 2006, the New York City Acquisition Fund launched.
One of the first borrowers of this new fund was Fordham Bedford Housing Corporation. Fordham Bedford received a loan for $23 million to acquire and preserve 277 affordable apartments in the Bronx that otherwise might have been sold to speculative buyers. Fordham Bedford was able to upgrade these buildings and ensure that they would stay affordable for the long term, bringing innumerable benefits to the community and its residents.
10 Years of Impact
Since its inception, the Fund has provided $336 million in financing to create over 10,200 affordable homes throughout the five boroughs. The funded projects represent a range of project types, including preservation, new construction, and supportive housing, all of which are critical to helping combat the city’s housing insecurity crisis. 2016 was its best year to date, bringing a new round of funding that makes an additional $135 million available for affordable housing in the years to come.
But the true impact of the Fund can be seen in the individual lives that have been impacted and the communities that have been enriched. Home is a critical rung on the ladder to success. Every unit created or preserved through the Fund represents a person or family who, without the Fund, might not have the safety and security that comes with having an affordable home. And collectively, the homes made possible by the Fund have helped to fortify communities by preserving affordability and creating stability for residents.
Ten years after the formation of the NYC Acquisition Fund, the need for homes affordable to low-income households is greater than ever before. Over 60,000 people sleep in NYC shelters every night and nearly half of all low-income households in NYC pay over 50% of their incomes for rent.
The NYC Acquisition Fund continues to be a valuable resource for affordable housing development as the needs of the market change. For instance, several communities throughout the city are being rezoned to allow for additional development. In these communities, it is critical to provide quality and mission-aligned affordable housing developers with early-stage capital so that they can play a role in the development process and ensure that the needs of the communities are met.
But in order for this to happen, the Fund needs continued commitment from government, nonprofits, financial institutions, philanthropies and more. Despite the massive strides we’ve made together over the last 10 years, thousands of families in New York still struggle to make ends meet or find themselves priced out of their own neighborhoods. The Fund is a powerful way to reverse that trend, and it will take continued commitment from the public, private and philanthropic sectors in order to get there.
Enterprise Community Partners is celebrating 30 years in New York with a renewed commitment to a mission that is more important than ever: to create opportunity for low- and moderate-income people through affordable housing in diverse, thriving communities. The New York branch of the national organization invests capital to create and preserve quality affordable homes for low- and moderate-income people, reinvests revenues to develop programmatic solutions in coordination with public and private partners, and scales these solutions through policy change. Over the past 30 years, Enterprise has helped create over 57,000 homes and invested nearly $3 billion in New York, touching thousands of lives.