(Bloomberg) -- New York will channel $500 million in surplus funds from the state agency that governs Battery Park City to build affordable housing in New York City, officials said Monday.
The Battery Park City Authority will disburse the money to a fund that accelerates housing construction, under an agreement between New York Governor Kathy Hochul, Mayor Eric Adams and Comptroller Brad Lander, according to a news release from the Governor.
Under the agreement — which comes amid New York City’s worst housing crunch in more than 50 years — the authority will make an initial transfer of about $140 million within 30 days, with the balance disbursed until the $500 million commitment is fulfilled, according to Hochul’s office. New York City plans to spend more than $3 billion on affordable housing in the current budget year.
A city survey last month found the vacancy rate for rentals dropped to 1.4%, the lowest since 1968, down from 4.5% in 2021. Apartments viable for rent to lower-income New Yorkers were even more scarce. The portion of units available for rent for less than $1,100 was a mere 0.4%. The city built 21,185 units of affordable housing in the fiscal year ending June 30, 2023, according to the Mayor’s Management Report.
Located on the southwest tip of Manhattan, Battery Park City was established in the late 1960s to develop a community on 92 acres of landfill created by the construction of the World Trade Center. As the new neighborhood was being developed, the Battery Park City Authority entered into long-term ground leases with developers.
Lease revenue and payments in lieu of property taxes from developers back debt issued by the authority as well as finance its operating expenses. Surplus from these payments serve as the primary source of cash for the $500 million commitment, according to the news release.
The agreement announced Monday succeeds a prior deal to disburse Battery Park City surplus operating revenue. Since 2010, the state authority has contributed $461 million of funding for affordable housing across the five borough and helped build or preserve 10,000 units of affordable housing.
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