Developer To Return 1.8K Harlem Apartments To Rent Regulation

HARLEM, NY — Developers buying five Manhattan buildings, most of which are located in Harlem, and plan to return thousands of the market-rate homes to "long-term" rent regulation, the firms and city and state officials announced this week.

L+M Development Partners and Invesco Real Estate will pay Urban American and Brookfield Asset Management $1.2 bllion to purchase the Manhattan buildings, all of which were built in the 1970s under the Mitchell-Lama affordable housing program and have since been deregulated. The developers will enter a regulatory agreement with the city Department of Housing Preservation & Development and New York Statte Homes & Community Renewal to place new rent restrictions on 1,800 of the portfolio's 2,800 apartments, a spokesman for L+M Development said.

Buildings in the portfolio include: Harlem's River Crossing, the Heritage, the Miles and the Parker in East and Central Harlem and Roosevelt Island's Roosevelt Landings. These buildings left the Mitchell-Lama program in 2005.

City and state officials did not disclose exact details of the regulatory agreement, but described the rent regulations as "long-term." The agreement also stipulates that any new residential development on the sites must be 100% rent-regulated.

"This landmark transaction will reclaim a large portfolio of once-affordable housing and provide thousands of New Yorkers the security of knowing that they can afford to stay in their communities for years to come," HPD Commissioner Louise Carroll said in a statement

L+M and Invesco plan to commit $50 million for immediate capital improvements at the five buildings, a spokesman for the development firms said. Improvements include energy savings measures, structural upgrades and new residential amenities available to all residents at each building. L+M raised $500 million to buy the portfolio through its Workforce Housing Fund to raise money to invest in affordable housing.

"We really view this as a significant win for existing residents in this portfolio and for the City of New York, particularly when it comes to bringing former Mitchell Lama units back into regulation," L+M Development Partners Managing Director Eben Ellertson said in a statement. "L+M's approach has always centered around creating affordable housing and keeping residents in their homes, and our Workforce Housing Fund represents a continuation of that work."

Local elected officials such as City Councilmember Diana Ayala and State Senator Brian Benjamin praised the deal as a win for Harlem residents.