An owner/developer must follow HPD marketing and tenant selection procedures to receive 421a tax benefits. A successful marketing plan with branding and advertising must also meet HPD guidelines.
An owner/developer must file a Notice of Intent with HPD to market the 421a workbook. HPD requires this notice to be submitted at least 9 months before completion of construction. HPD may issue a waiver on the 9-month requirement in certain circumstances.
According to HPD guidelines, a marketing plan should include all documents that can be used during pre-marketing, marketing of the affordable units, lottery applicants’ evaluation & lease-up. These documents include a combination of print and digital media, marketing materials, including HPD’s Housing Connect advertisement.
Once online applications on HPD’s Housing Connect website and paper applications are set up, prospective tenants can submit applications for affordable units online or via paper mail. The time period of the lottery depends on the number of affordable units in a project.
Once the application deadline expires, all paper applications must be collected from the post office and entered to HPD’s Housing Connect website. Then, HPD runs the lottery and provides a logbook with a list of applicants. Even small projects with 3 units can receive more than 50,000 applications since anyone can apply for an affordable unit, regardless of a particular applicants’ eligibility. Only 10% to 12% of applications usually meet HPD requirements for projects based on 130% AMI.
The marketing agent must attend various marketing and compliance meetings with HPD as well as meet an HPD representative to open the P.O. box for paper applications and retrieve them when the lottery ends.