HPD Seeks Urban Development Action Area Designation for Two City-Owned Properties in East Village

Rendering of proposed buildings at 204 Avenue A (left) and 535 East 12th Street (right) in East Village, Manhattan. Image Credit: CPC.

Approval of the proposed project will provide housing to families that have been displaced for over ten years. On December 5, 2018, the City Planning Commission heard an application that would allow for the demolition of existing buildings on two City-owned lots and development of ten co-operative units at 204 Avenue A and eleven one-bedroom rental units at 535 East 12th Street in Manhattan. The lots are located on the same block in the East Village, bounded by Avenue A, East 12th Street, East 13th Street, and Avenue B. To facilitate the proposed development, the applicant team requested approval for the disposition of the City-owned lots and designation and approval of the lots as an Urban Development Action Area Project.  The application was brought by the Department of Housing Preservation and Development, along with the selected developer for the project, Juan Barahona of SMJ Development.

The two properties have been City-owned since the 1970s and became part of HPD’s Tenant Interim Lease Program in 2001. The Tenant Interim Lease Program “assists organized tenant associations in City-owned buildings to develop economically self-sufficient low-income cooperatives where tenants purchase their apartments for $250.” The tenant associations enter into a lease with the City to maintain and manage the buildings in which they live in.

Existing buildings at 204 Avenue A (left) and 535 East 12th Street in East Village, Manhattan. Image Credit: CPC

Due to deteriorating structural conditions, both buildings’ tenants had to be vacated and relocated in 2008. At that time, each building housed five families. Since 2008, the buildings have remained vacant.

The 204 Avenue A building is currently four stories, containing six residential units and two commercial units. The applicants are proposing to demolish the existing building and to construct a seven-story building that would house ten cooperative units that would be sold to the former, relocated tenants. The ground floor would be used as a commercial space and the building would also have a rooftop recreational space for the residents.

The building at 535 East 12th Street is currently five stories in height, and has eight residential units as well as one commercial unit that is not allowed under the existing zoning. The applicants are proposing to demolish the existing building and to construct a six story building with eleven one-bedroom rental units. This building will be a middle-income rental building with an income restriction at 130 percent AMI.

The project was proposed as an Affordable Neighborhood Cooperative Program (ANCP) project. ANCP is an HPD program where developers are selected to rehabilitate distressed City-owned properties managed by the Tenant Interim Lease Program, in order to create affordable cooperatives for low- and moderate-income households. Under the program, developers receive low interest loans in the form of City Capital subsidy, in addition to construction and permanent financing sources provided by private institutional lenders and New York State Affordable Housing Corporation programs.

As an Affordable Neighborhood Cooperative Program project, following the construction loan closing,  the 204 Avenue A building will be conveyed to a Housing Development Fund Corporation cooperative with unit purchase requirements, income restrictions, and resale requirements. The projected maintenance for the cooperative is expected at 40 percent AMI. In addition, although the entire building will be affordable, two of the units are going to be permanently affordable as required by the Inclusionary Housing Designated Area bonus, which gives an applicant a higher residential Floor Area Ratio in return for 20 percent of residential units being designated as permanently affordable.

The proposed project has received approval from both the Manhattan Community Board 3 and Manhattan Borough President Gale Brewer.

The public hearing closed with no members of the public testifying for or against the project. City Planning will vote on this application at a later date.


By: Viktoriya Gray (Viktoriya is the CityLaw Fellow and New York Law School Graduate, Class of 2018).


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