Cozen O’Connor: Rent Guidelines Board leaves affordable-housing developers in a pinch

Rent Guidelines Board leaves affordable-housing developers in a pinch

Wednesday, June 27, 2018

Ken Fisher, a member of Cozen O’Connor’s Business Law Department, discusses the NYC Rent Guidelines Board’s vote to allow a 1.5 percent increase on one-year leases and a 2.5 percent increase on two-year leases to rent-regulated apartments in New York City. In the Crain’s New York Business article, Ken explains how this increase could impact the financial health of affordable housing development projects.

“A cash reserve is typically baked into the financing for an affordable housing project to cover losses. But if lenders and investors believe that rents will increase at a slower rate than in the past, they might demand the cash reserve be increased. And while some developers might oblige,” said Ken. “The city would likely need to put in money as well, even though the mayor appoints a majority of members to the Rent Guidelines Board and the administration influences its decision each year.”

To read the full article, click here.

Contacts

Kenneth K. Fisher

Member

kfisher@cozen.com

(212) 883-4962

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