MAYOR ADAMS, COMPTROLLER LANDER ANNOUNCE NEW YORK CITY’S THIRD ISSUANCE OF SOCIAL BONDS, INVESTMENTS THAT SUPPORT AFFORDABLE HOUSING

 

Proceeds Will Help Finance Development of Over 4,300 Affordable Housing Units

Upcoming Sale Follows Another Record-Breaking Year for Producing and Connecting New Yorkers to New, Affordable Homes

New York City Mayor Eric Adams and New York City Comptroller Brad Lander today announced New York City’s plans to issue approximately $820 million of taxable, fixed rate “General Obligation Social Bonds” in October 2024. Selling bonds to investors generates funds that the city uses to build and maintain its world-class infrastructure. Proceeds from the sale of these social bonds will support the construction and development of over 4,300 more affordable housing units in New York City and continue to build on the administration’s efforts to build more homes across the five boroughs, through efforts such as, the ‘City of Yes for Housing Opportunity’ proposal.

“Our administration is committed to making New York City a safer, more affordable city,” said Mayor Adams. “With a historically low vacancy rate and more people feeling the squeeze of market pressures, we must say ‘yes’ to using every tool in our toolbox to build more affordable housing across New York City. Social bonds are a smart and effective way to achieve our housing goals and give investors a critical opportunity to partner with the city so that we can become a more affordable city.”

“Social bonds have been an important tool to support the reimbursement of crucial affordable housing projects throughout the five boroughs and are a creative way for New York City to tap into the growing investor demand for socially sustainable investments,” said Comptroller Lander. “I am thrilled that we are able to continue this successful initiative now for the third year and remain focused on implementing strategies that preserve one of our greatest assets — genuinely affordable housing.”

This will be the city’s historic third issuance of social bonds — all of which occurred since 2022,  when Mayor Adams and Comptroller Lander took office. Issuing social bonds is a creative strategy that enables the city to take advantage of the demand for investment opportunities while addressing policy objectives, such as making the city more affordable. The first two social bond issuances totaled $1.1 billion and helped to finance nearly 7,800 affordable housing units. S&P Global Ratings provided an independent opinion for each of the three transactions, affirming that the bonds are aligned with the International Capital Markets Association’s Social Bond Principles, which support the financing of projects — like affordable housing — that seek to achieve positive social outcomes.

This bond offering comes after another record-breaking year for the production of affordable housing in New York City, and follows passage of the Fiscal Year 2025 Adopted Budget wherein Mayor Adams and the City Council agreed to invest an additional $2 billion in the capital budgets of the New York City Department of Housing Preservation and Development (HPD) and the New York City Housing Authority — bringing the city’s investment in affordable housing to a record level of $26 billion over the current 10-year plan. The Adams administration has pledged to use every possible tool to deliver more affordable housing for New Yorkers, with a bold “moonshot” goal of building 500,000 new homes by 2032.

Net proceeds from the upcoming sale of social bonds will be used to reimburse prior spending by the city under HPD’s Extremely Low-and Low-Income Affordability (ELLA) program, Senior Affordable Rental Apartments (SARA) program, and Supportive Housing Loan Program (SHLP). The projects being financed are expected to provide an estimated 2,008 units under the ELLA program, 744 units under the SARA program, and 1,597 units under the SHLP program. Over 80 percent of newly constructed units being financed are for households earning 60 percent of area median income (equal to $93,180 for a family of four) or below. Additionally, 1,713 of the total units — nearly 40 percent — will provide housing for individuals and families formerly experiencing homelessness.

In addition to the social bonds, the city also intends to sell approximately $680 million of non-labeled taxable fixed-rate bonds to finance capital projects.

Subject to market conditions, pricing for both the social bonds and non-labeled bonds will take place on Wednesday, October 9, 2024, via negotiated sale through an underwriting syndicate led by joint senior managers BofA Securities and Blaylock Van, with J.P. Morgan, Jefferies, Loop Capital Markets, Ramirez & Co., Inc., RBC Capital Markets, Siebert Williams Shank, and Wells Fargo Securities serving as co-senior managers.