In the 1970s, the Bronx was burning. Many landlords abandoned their buildings. But some residents banded together to maintain, stabilize and eventually purchase their buildings, forming Housing Development Fund Corporations (HDFC) to manage the properties.
Now, 50 years later, some HDFCs are struggling to keep their buildings up to code and pay utility bills. Some have even been lost to foreclosure, reducing the already limited supply of affordable housing options.
That’s why Spring Bank and the Habitat NYC Community Fund joined forces to provide financing to a 48-unit HDFC cooperative in Hunts Point in the South Bronx. Established in 1982, the Barretto Street property required a long-term, multi-faceted plan to clear up municipal debts, stabilize the building’s overall finances and make improvements that would reduce energy use and overall costs.
Through a 15-year, $250,000 Fresh Start Loan through the Community Fund and $285,000 loan from Spring Bank, the cooperative was able to cover both the arrears and some of the initial fees associated with the completion of the overall capital plan.
“The Habitat NYC Community Fund and Spring Bank provided our cooperative with critical assistance that saved the affordability of our homes and prevented the potential loss of homeowner equity,” said Yaritza Sandra, Secretary of the Board, 645 Barretto Street HDFC. “The financial resources we were able to secure through them will preserve the long-term affordability of 645 Barretto Street and enable all of the residents to benefit from capital investments in energy efficiency, further reducing the ongoing cost of homeownership.”
Across New York City, thousands of apartments fall within a range of affordability for low-to moderate-income families, but many are in danger of being lost to the open market. The New York City Housing Authority estimates that more than 2,000 distressed affordable units are at risk of being lost to the market each year, resulting in less affordable housing availability for low-income families.
“The reality is that we cannot just build our way out of the affordable housing crisis,” said Karen Haycox, CEO of Habitat for Humanity New York City and President of the Community Fund. “Across the five boroughs there are thousands of multi-family developments that lack access to the capital necessary to stabilize their buildings physically and fiscally. Through our Community Fund, Habitat NYC is leveraging both our brand and our balance sheet in order to provide these buildings with the resources that they need, helping to improve communities and maintain stable, resilient and safe homes for hardworking, low-income families.”
A Lifeline for Preserving Limited-Equity Co-ops in New York