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L+M, Invesco Dropping $1.2B To Buy Market-Rate Units And Make Them Affordable

An aeriel shot of the Miles apartment building in Harlem

Amid an ongoing debate about the future of New York City’s affordable housing, L+M Development Partners and Invesco Real Estate are joining together with a plan to return thousands of units to affordability.

The firms have agreed to buy five former Mitchell-Lama developments in Manhattan from Urban American and Brookfield Asset Management for $1.2B, they announced Wednesday. The portfolio spans 2,800 market-rate units, and L+M and Invesco plan to return more than 1,800 of them to long-term rent regulation.

“We really view this as a significant win for existing residents in this portfolio and for the City of New York, particularly when it comes to bringing former Mitchell Lama units back into regulation," L+M Development Partners Managing Director Eben Ellertson said in a statement. “This deal sends a strong message about how government and committed private sector partners can make a real impact in addressing the need for high-quality workforce housing in New York City.”

L+M made the purchase with its workforce-housing fund, The Wall Street Journal reports. The units are part of the 4,000-unit Putnam Portfolio, which was first listed for sale in March, according to The Real Deal.

The buildings include the River Crossing, the Heritage, the Miles in Harlem, and the Parker and Roosevelt Landings on Roosevelt Island. The companies will enter into partnerships with the New York City Department of Housing Preservation and Development and New York State Homes and Community Renewal program to preserve affordability of the apartments.

The deal comes as the city continues to grapple with a housing affordability crisis, and at a time when building cheaper housing for New Yorkers is increasingly difficult to do.

Developers have said the soaring price of land and construction costs make building for anything less than market rate particularly challenging — and bold, creative ideas are desperately needed to spur more affordable housing. Paying more than $1B to take market-rate buildings into rent regulation certainly qualifies.