When city, state and federal officials announced a new $50 million initiative for affordable housing in lower Manhattan, it brought to light the tremendous housing activity downtown.

The initiative allows Lower Manhattan Development Corporation (LMDC) tol allocate $50 million in HUD funding, including surplus from the LMDC Residential Grant Program, for affordable housing. The grant will fund approximately 300 affordable units for moderate to middle-income working families in the income range of approximately $50,000 to $85,000.

Mayor Michael R. Bloomberg said, "Lower Manhattan's residential renaissance is integral to our Administration's vision for Lower Manhattan, as well as our plans to create or preserve 65,000 units of housing over the next five years. Affordable housing is fundamental to New York City's long-term economic prosperity and this announcement demonstrates that in these difficult budget times, the City has found innovative news ways of funding it. “

LMDC President Kevin M. Rampe said, “Thanks to the support of Housing and Urban Development Secretary Mel Martinez, Governor Pataki, and Mayor Bloomberg, this program will be the first of several initiatives to create affordable housing for working families in Lower Manhattan. These funds will ensure that a diverse range of professionals including firefighters, police officers, and teachers can become part of downtown’s thriving residential community.”

The program will provide a $50 million grant for subsidies for affordable housing tied to the Liberty Bond program, jointly administered by the New York State Housing Finance Agency (HFA) and the New York City Housing Development Corporation (HDC). The program will require that 20 percent of the units developed, for the next four projects or until the $50 million is fully allocated, be provided for affordable housing.

The New York Liberty Bond program is a joint City-State initiative that provides tax-exempt private activity bonds for the construction and renovation of commercial and residential facilities. The bonds provide incentives for developers to continue the expansion of the residential market in Lower Manhattan by making construction and/or permanent mortgage loans available for residential rental projects located within the Liberty Zone. The Liberty Zone is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), and Grand Street (east of its intersection with East Broadway).

More than 1,300 units have been approved for Liberty Bonds and over 6,000 units are in the pipeline.

Lower Manhattan was the fastest growing residential neighborhood in New York City prior to September 11, 2001. Immediately following September 11, 2001, vacancy rates climbed to over 40 percent in some areas and the stabilization of the residential base became essential to the revitalization of Lower Manhattan.

The LMDC Residential Grant Program (RGP) funded by HUD contributed significantly to the stabilization of the neighborhood by attracting new residents to the area, encouraging existing residents to stay, and providing an incentive for two-year leases. Occupancy rates in Lower Manhattan are now over 95 percent and Battery Park City has higher occupancy rates than at any other time in its history. More than half of the residents in the area closest to the World Trade Center site are new residents.

Mayor Michael R. Bloomberg announced his administration's New Housing Marketplace: Creating Housing for the Next Generation plan on December 10, 2002. The Mayor's plan will dedicate $3 billion in funds over the next five years, creating or preserving 65,000 units of housing; of these 27,000 units will be new and 38,000 units will be preserved. About 25 percent more new units of housing will be constructed over the next five years when compared to the last five years.

The plan includes a stream of initiatives aimed at facilitating private investment in housing in targeted communities by removing barriers to development and reducing costs of construction. As of July 1st, 2003, the official kick-off of the plan, the Housing Development Corporation already started 1,749 units, and in fiscal year 2004, HDC and Housing Preservation and Development anticipate starting 8,030 units of housing.