The Wall Street Journal reports that developer, Arker Cos, just purchased 18 buildings, mostly in Morrisania section of The Bronx, and plans on $70.5 million in upgrading the units with new kitchens, bathrooms and other undisclosed improvements — all while keeping them affordable. All the units are currently subsidized by section-8. Such a move is virtually unheard of in The Bronx and probably throughout the city where a developer comes in and will make major improvements after purchasing such a portfolio and let alone keeping the rents the same.
WSJ reports:
An affordable housing developer founded by a holocaust survivor is investing $156 million in an 18-building portfolio in the South Bronx that will help New York Mayor Bill de Blasio meet his affordable housing goal.
Arker Cos., which owns about 5,500 housing units in the New York region, has purchased the buildings with about 676 units in the Morrisania neighborhood for $85.5 million. Arker plans to spend another $70.5 million to upgrade them with new bathrooms, kitchens and other improvements.
“There will be a real sprucing up of the properties,” said Daniel Moritz, one of the principals of the company.
Floral Park, NY-based Arker is relying on a number of city and state programs to buy the property and upgrade the units. Equity is coming in large part from the sale of tax credits through Wells Fargo & Co. Arker is getting debt financing from the sale of city Housing Development Corp. bonds with mortgage insurance being provided by Freddie Mac.
Rents in all the units are subsidized through the Section 8 program run by the U.S. Housing and Urban Development Department. Arker is raising rents as part of the deal, but the increases will be paid by HUD. Under the Section 8 program, rents for the people living in the apartments is capped at 30% of their incomes, Mr. Moritz said.
“They get a vastly improved project and their rents don’t go up,” he said.
Read the rest: via Arker Buys 18-Buildings in South Bronx; Plans to Keep Them Affordable – WSJ.
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