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A New Model and a Step Forward for Mission-Driven Developers
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Earlier this month, the ambitious new collaboration called the Joint Ownership Entity (JOE NYC) announced the acquisition of a 43-building, 248-unit portfolio of at-risk affordable housing in Brooklyn. This signifies another important step forward for neighborhood-based housing groups. The purchase was done by the well-respected local not-for-profit developer St. Nicks Alliance and was backed by the shared scale and financial resources that is the hallmark of the JOE model.
JOE NYC Moves into High Gear
Earlier this month, the ambitious new collaboration called the Joint Ownership Entity (JOE NYC) announced the acquisition of a 43-building, 248-unit portfolio of at-risk affordable housing in Brooklyn. This signifies another important step forward for neighborhood-based housing groups. The purchase was done by the well-respected local not-for-profit developer St. Nicks Alliance and was backed by the shared scale and financial resources that is the hallmark of the JOE model. This acquisition represents a rare example of a not-for-profit organization acquiring an at-risk portfolio owned by a for-profit organization.
This type of model ensures that the buildings remain affordable and benefit the community over the long term. ANHD congratulates St. Nicks Alliance and JOE NYC on this notable step forward.
Mission-driven developers – including Community Development Corporations (CDCs) – have been key assets for the New York City affordable housing development infrastructure for decades. But under Mayor Bloomberg, the City shifted towards policies that favored for-profit developers, a shift that Mayor de Blasio did not correct. This fact, combined with a more expensive and competitive development environment, has created challenges for mission-driven developers. JOE NYC is an ambitious answer to this challenge. Mission-driven developers bring essential benefits to their local neighborhoods, including permanently affordable housing, deeper affordability, essential social services funded by the “profits” of the buildings, and stronger neighborhood civic infrastructures.
These are community benefits that only mission-driven developers bring. Launched in spring 2016, JOE NYC was founded by a group of CDCs to expand their capacity to build and preserve affordable housing in their communities. JOE NYC expects to take ownership of over 3,000 affordable housing units across New York City in the next year. CDCs that participate in the collective JOE NYC model have a seat on the organization’s board and share in the financial benefit and increased economies of scale that have a direct, positive impact on their local communities. JOE NYC strengthens the capacity of asset and property management across its portfolio by giving participating CDCs the opportunity to benefit from shared efficiencies and JOE’s balance sheet. And, JOE NYC will serve as a guarantor for CDCs, which will allow its members to secure financing in future development projects. The recent St. Nicks Alliance acquisition is a key step forward. 43-building cluster was at-risk because it was reaching the end of the 15-year low-income-housing tax credit compliance period, putting all 248 units at risk for losing their affordability. With a $5.3 million loan from the Local Initiatives Support Corporation (LISC), $1.24 million dollars in equity coming from JOE NYC, and over $900,000 from St. Nicks, these units are now guaranteed to remain a safe, stable, decent, affordable resource for the local community.