FREQUENTLY ASKED QUESTIONS
What is JOE NYC?
JOE is a joint ownership entity that acquires and asset manages affordable multifamily properties on behalf of member non-profit Community Development Corporations (“CDCs”). The mission of JOE is to secure the long term viability of non-profit run affodable housing and to make members more competitive in securing new affordable housing development opportunities.
What are the activities of JOE?
JOE NYC was created to assemble ownership of affordable housing projects owned by CDCs, into one entity of substantially greater scale. First and foremost, JOE NYC will serve as asset manager of its portfolio of properties, improving operating margins of contributed properties by achieving economies of scale through the bulk purchase of energy, goods and services. JOE NYC will also have the balance sheet strength to refinance and recapitalize contributed CDC Projects without the need to joint venture with a for-profit partner. JOE NYC will also be able to use its balance sheet to act as a co-guarantor to its CDC members on new affordable housing developments. This will relieve CDCs from the current necessity of co-venturing with for-profit partners on new deals.
What are the benefits of participating in JOE NYC?
Who can participate in the JOE NYC?
At present, participation is open to any non-profit organization that owns affordable multifamily rental housing assets so long as the organization contributes at least one property to JOE NYC.
What role do member CDCs play in JOE NYC?
In return for joining and contributing properties to JOE NYC, CDCs will have a seat on the Board of Directors, the right to net cash flow based upon a valuation and access to guarantees for new developments.
How can local CDCs assure that their community interests are being served by participation in JOE NYC?
All member CDCs have voting rights and a seat on the Board. Groups may also opt to retain fee interest in the underlying land through the creation of a community land trust.
Will JOE NYC be a non-profit organization?
JOE NYC is a 501(c)(3) non-profit organization ("JOE NFP") that is the sole member of a limited liability company (the “JOE LLC”) CDCs are the controlling members of JOE NFP. The structure also includes master not-for-profit Housing Development Fund Corporation (the JOE “HDFC”) which shall be controlled by the not-for-profit corporation.
Why is the ownership of the JOE NYC structured this way?
The organization structure is designed initially to attract both philanthropic and private capital and to accommodate the acquisition of a wide variety to housing assets. Control by Joe NFP permits JOE NYC to attract philanthropic grants and program-related investments during the initial start-up of the organization. Use of the LLC structure leaves open the option at a later date to pursue private investors or even the potential of creating a REIT for the purpose of raising capital investment. JOE HDFC serves as ownership entity of those projects whose regulatory agreement requires ownership by an HDFC.
Is JOE NYC a property manager?
No. JOE NYC serves as owner and asset manager. Properties owned by JOE NYC retain their previous property manager. This means that CDCs that provide their own in-house property management will retain that responsibility and will continue to earn fees for providing the services. JOE NYC will reserve the right as asset manager to assess the efficacy of property management across the portfolio and make recommendations, to improve property performance.
How are membership shares determined?
Members shall be entitled to receive income from the JOE NFP based on a valuation of the properties that they have contributed to the JOE NYC. Share valuation will be based on a number of indicators including the capitalized value, the value of public investment to achieve affordability, the depreciated book value of the property, the outstanding operating reserve fund balances, and outstanding hard debt and other long-term liabilities.
Can a CDC remove its properties from JOE NYC?
CDCs joining JOE NYC agree to an initial ten (10) year buy-in during which no Member may withdraw except upon the dissolution of the entity for legal or financial reasons. At the end of the Initial Membership Period, the Members may vote to dissolve JOE NYC or individuals Members may choose to withdraw, subject to certain rights of JOE NYC.
What is JOE NYC?
JOE is a joint ownership entity that acquires and asset manages affordable multifamily properties on behalf of member non-profit Community Development Corporations (“CDCs”). The mission of JOE is to secure the long term viability of non-profit run affodable housing and to make members more competitive in securing new affordable housing development opportunities.
What are the activities of JOE?
JOE NYC was created to assemble ownership of affordable housing projects owned by CDCs, into one entity of substantially greater scale. First and foremost, JOE NYC will serve as asset manager of its portfolio of properties, improving operating margins of contributed properties by achieving economies of scale through the bulk purchase of energy, goods and services. JOE NYC will also have the balance sheet strength to refinance and recapitalize contributed CDC Projects without the need to joint venture with a for-profit partner. JOE NYC will also be able to use its balance sheet to act as a co-guarantor to its CDC members on new affordable housing developments. This will relieve CDCs from the current necessity of co-venturing with for-profit partners on new deals.
What are the benefits of participating in JOE NYC?
- JOE NYC preserves, protects and expands affordable housing resources in the City.
- JOE NYC enhances the effectiveness of participating CDCs by leveraging the size and strength of the CDC members and their assets.
- JOE NYC increases opportunities for CDCs to continue to serve neighborhoods in need.
- JOE NYC achieves economies of scale through bulk purchasing power.
- JOE NYC provides the requisite balance sheet and liquidity necessary to recapitalize existing Projects.
- JOE NYC can act as a co-guarantor for CDC members on new Projects.
- JOE NYC serves as an advocate for CDCs and the industry at-large.
- JOE NYC increases the market share of CDCs in housing preservation and development.
Who can participate in the JOE NYC?
At present, participation is open to any non-profit organization that owns affordable multifamily rental housing assets so long as the organization contributes at least one property to JOE NYC.
What role do member CDCs play in JOE NYC?
In return for joining and contributing properties to JOE NYC, CDCs will have a seat on the Board of Directors, the right to net cash flow based upon a valuation and access to guarantees for new developments.
How can local CDCs assure that their community interests are being served by participation in JOE NYC?
All member CDCs have voting rights and a seat on the Board. Groups may also opt to retain fee interest in the underlying land through the creation of a community land trust.
Will JOE NYC be a non-profit organization?
JOE NYC is a 501(c)(3) non-profit organization ("JOE NFP") that is the sole member of a limited liability company (the “JOE LLC”) CDCs are the controlling members of JOE NFP. The structure also includes master not-for-profit Housing Development Fund Corporation (the JOE “HDFC”) which shall be controlled by the not-for-profit corporation.
Why is the ownership of the JOE NYC structured this way?
The organization structure is designed initially to attract both philanthropic and private capital and to accommodate the acquisition of a wide variety to housing assets. Control by Joe NFP permits JOE NYC to attract philanthropic grants and program-related investments during the initial start-up of the organization. Use of the LLC structure leaves open the option at a later date to pursue private investors or even the potential of creating a REIT for the purpose of raising capital investment. JOE HDFC serves as ownership entity of those projects whose regulatory agreement requires ownership by an HDFC.
Is JOE NYC a property manager?
No. JOE NYC serves as owner and asset manager. Properties owned by JOE NYC retain their previous property manager. This means that CDCs that provide their own in-house property management will retain that responsibility and will continue to earn fees for providing the services. JOE NYC will reserve the right as asset manager to assess the efficacy of property management across the portfolio and make recommendations, to improve property performance.
How are membership shares determined?
Members shall be entitled to receive income from the JOE NFP based on a valuation of the properties that they have contributed to the JOE NYC. Share valuation will be based on a number of indicators including the capitalized value, the value of public investment to achieve affordability, the depreciated book value of the property, the outstanding operating reserve fund balances, and outstanding hard debt and other long-term liabilities.
Can a CDC remove its properties from JOE NYC?
CDCs joining JOE NYC agree to an initial ten (10) year buy-in during which no Member may withdraw except upon the dissolution of the entity for legal or financial reasons. At the end of the Initial Membership Period, the Members may vote to dissolve JOE NYC or individuals Members may choose to withdraw, subject to certain rights of JOE NYC.
