May 3, 2016

DEP Proposes a Preferential Rate for Affordable Housing

by UNHP
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UNHP’s 2015 Affordable Water for Affordable Housing Report called for a cap on water rates for affordable housing.

On April 8th, the Department of Environmental Protection (DEP) proposed a 2.1% increase to the NYC Water Board as well as a new program with a preferential rate for affordable housing projects. UNHP, a long-time advocate for water and sewer rate reform, called for an Affordable Housing Cap Rate last year at the water board public hearings and is pleased the DEP has proposed a special program and looks forward to the program rolling out in July.

The proposed New Multi-Family Water Assistance Program will give a $250 credit per apartment per year to qualifying units meeting affordability criteria (i.e., the average rent or maintenance is affordable at 30% or less of income for the average household making below 60% of Area Median Income) and under an executed affordability regulatory agreement containing a minimum of at least fifteen remaining years with NYC Department of Housing Preservation and Development (HPD) or NYC Housing Development Corporation (HDC). The $250 credit equals about 25% of the fixed MCP water rate ($1,005 per unit per year) that most affordable housing units are enrolled in and currently paying and will be indexed to future rate increases. This program will provide a total of $10 million of assistance to properties serving as many as 40,000 units, while helping to incentivize affordability.

UNHP, with the support of affordable housing managers, owners and advocates, proposed a cap on water and sewer rates for affordable housing at last year’s hearings. UNHP’s 2015 Affordable Water for Affordable Housing report used Rent Guidelines Board data and water expense and usage data on a number of affordable buildings in the City to document the disproportionate impact water costs have on affordable housing even with programs like the Multi-Family Conservation Program (MCP). The Water Board heard the many voices that came out to last year’s public hearings and as a result the DEP, working with HPD, this year modeled the new program much like the Home Water Assistance Program (HWAP) that gives a 25% discount to low-income, senior and disabled homeowners each year on their water rate. The Wall Street Journal reported on the April 8th Water Board hearing and quoted UNHP’s Johanna C. Kletter, who has been closely monitoring the proposed new program “Johanna Kletter, deputy director at University Neighborhood Housing Program ... welcomed the proposal’s new measures to help affordable-housing providers, which her organization sought. “They’re making progress and they’re listening,” she said.”

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UNHP hopes that the proposed Multi-Family Water Assistance Program will help stem the “rising tide” of rates for NYC affordable housing projects. According to a 2015 UNHP study of Bronx community-controlled buildings the average water expense was 13.02% of the operating costs.

The other proposals DEP presented to the NYC Water Board include freezing the minimum charge for 149,000 properties for the third consecutive year, continuing the Leak Forgiveness Program, Expanding the Home Water Assistance Program (HWAP) to give low-income, senior and disabled homeowners a $118 credit. DEP is also asking for an additional six month extension to those MCP customers to get in compliance with the program’s guidelines and reducing the penalty to a 10% charge instead of automatic conversion back to metered billing. This will allow 10,000 properties time to comply with the MCP requirements to have low consumption or low flow fixtures in 70% of all units, install an Automatic Meter Reader and working meter, be in good standing, and sub meter commercial units using more than 63,000 gallons annually.

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NYC Water Board will hold public hearings in each borough. UNHP is encouraging affordable housing advocates to attend the May 10th Bronx Water Board hearing to be held at Hostos College.

The Bronx Water Board hearing will be held on May 10th at 7 PM at Hostos Community College, Savoy Building, 2nd Floor, 120 East 149th Street, Bronx, NY. UNHP is encouraging affordable housing owners and managers to attend the hearing to find out more about the program and its roll-out and to weigh in about the increase. To read more about the Fiscal Year 2017 rate proposal, you can download DEP’s report here.

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