Comptroller found that HPD was successful in ensuring that the primary housing goals of the Cornerstone Program were met. In 2000, HPD established the Cornerstone Program, a new construction initiative designed to expand private housing and increase the City’s affordable unit housing stock. The primary goals of the Cornerstone Program are two-fold: sell City-owned land, usually for a small fee, to encourage private residential development, and create affordable rental and homeownership units in specific neighborhoods. The City Comptroller audited HPD to determine whether the agency had made sure the primary goals of the Cornerstone Program were met in FY 2008.

The Comptroller found that, through the Cornerstone Program, HPD had encouraged new residential development, and to a smaller degree, expanded affordable housing. As of March 2009, 2,191 units had been completed under the Cornerstone Program. Of those, 22 percent were designated for lowincome families, 47 percent were designated for middle-income families, and the remaining 31 percent of units were market-rate units or unspecified. The Comptroller, however, found that HPD was unable to adequately assess the effectiveness of the program because HPD’s Production Credit System, which tracks all new multi-family developments, did not distinguish Cornerstone developments from non-Cornerstone developments, and did not track the number of started, completed, and affordable units being developed.

The audit also found that HPD had failed to adequately document its evaluation of developer responses to Requests for Proposals, and, as such, the Comptroller could not determine if the responses were fairly evaluated. Although the audit did not find significant instances of unqualified applicants being awarded affordable units, the Comptroller recommended that HPD require developers to provide copies of applicants’ employment-income documentation as well as evidence that the documentation was accurate.

Department of Housing Preservation and Development Cornerstone Program, ME09-077A, NYC Comptroller William C. Thompson, Jr. (Aug. 5, 2009).