BROOKLYN, N.Y. — The New York City Public Housing Preservation Trust, a public benefit corporation created in 2022 to finance major renovations of New York City Housing Authority (NYCHA) properties, has reached its first financial closing with the $607 million modernization of Nostrand Houses.
Merchants Capital structured a $185 million taxable loan for the project, part of a broader financing package that will rehabilitate the 1,148-unit Brooklyn development. the AFL-CIO Housing Investment Trust, which acted as co-lender for the transaction, provided $50 million of the total loan.
The New York City Public Housing Preservation Trust is overseeing the modernization effort, with Community Modernization Group, a New York City-based public housing modernization specialist, serving as design-build partner and NYCHA retaining ownership and property management.
Nostrand Houses is the first development to participate in the Trust’s Modernization & Preservation Program which, in partnership with NYCHA, enables the repair, rehabilitation and modernization of traditional Section 9 housing.
The property will be converted from Section 9 public-housing subsidies to project-based Section 8 assistance, allowing the Trust to access additional federal funding while NYCHA retains ownership and management of the property.
Nostrand Houses comprises 16 residential buildings, constructed between 1949 and 1951, across two contiguous sites. Its rehabilitation will occur in six phases for individual apartments and building-wide systems, with new kitchens and bathrooms to be installed in addition to new, electrified heating and cooling systems, new elevators, improved accessibility, lead and mold remediation, upgraded security systems and other improvements.
Residents will be temporarily relocated during the renovations, which are being completed in six phases, with affected households expected to be out of their apartments for approximately nine months. Construction started in October and is slated for completion in 2031.