Bill Morris in Bricks & Bucks on December 22, 2021
For low- and middle-income co-ops and condominiums, the Climate Mobilization Act is looming like a dark cloud. It has the boards in these buildings asking a vexing question: How can we possibly pay for retrofits that will reduce our building’s carbon output enough to satisfy the law and avoid stiff fines?
A partial answer comes from the New York City Energy Efficiency Corp. (NYCEEC), a nonprofit lender devoted to funding green energy projects. Working in conjunction with the city’s department of Housing Preservation & Development (HPD), it offers interest-free loans to low- and middle-income co-ops and condos that want to explore ways to increase their building’s energy efficiency. These pre-development loans can pay for energy audits, architectural and engineering studies, a cost-savings analysis and a scope of work for projects that will cut a building’s energy costs. Such projects include installation of solar panels, upgrading windows, doors and the building envelope, electrification, battery storage and more.
“In order to get construction financing from HPD, boards need an integrated physical needs assessment,” says Jay Merves, the director of business development at NYCEEC. “We’re able to provide financing for that pre-development work. What we’re trying to do is encourage these kinds of green measures in affordable housing communities.”
For qualifying buildings, the loans are interest-free up to $100,000 and carry a 2% to 3% rate for larger loans. The loans typically run for two years, and there are no upfront fees. (NYCEEC is also administering the city’s Property Assessed Clean Energy loans program, which allows co-ops to pay for energy-saving retrofits through a charge on the property tax bill.)
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“Pre-development loans are not construction loans,” Merves stresses. “They’re designed to get building owners to the point where they’re able to get permanent financing. They need a loan to bridge the gap while they assess the scope of the project. Then they should look for lenders that meet their construction needs.”
The pre-development loan program is currently focused on funding small projects at small buildings. “But,” Merves says, “we would love to see pre-development funding up to $5 million.”
In its 11-year existence NYCEEC has financed the greening of more than 11,000 units of affordable housing. One of its more noteworthy recent projects was financing $6.9 million in pre-development costs at the former Greenpoint Hospital campus in Brooklyn, where a $213 million zero net energy project will add 310 units of affordable housing and redevelop a 200-bed homeless shelter.
“A lot of co-ops and condos may not be aware that this pre-development money is available to them,” Merves says, adding that boards can get more information by sending an email to NYCEEC at email@example.com. Visit their website by clicking here.
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