Bronx Development Caps Wells Fargo’s Nearly $10B NYC Affordable Housing Investment

Everyone knows Wells Fargo has a national presence, but the extent of the megabank’s debt and equity investment into New York City affordable housing is a lesser-told story.  

Over the last five years, Wells Fargo has provided $3 billion in construction debt and $1.67 billion in equity into community lending and investment, while providing an additional $4.64 billion in permanent debt financing through Fannie Mae and Freddie Mac multifamily loans to create a total of 50,300 units of new or rehabilitated affordable housing across the five boroughs. 

Pete Cannava, managing director and head of multifamily capital at Wells Fargo, told Commercial Observer that despite having “a big presence in New York,” (Wells Fargo has more than 950,000 square feet of office space at the firm’s “executive headquarters” in Hudson Yards), his firm has felt comfortable deploying construction debt, and investing rehabilitation equity, into the city’s affordable housing space due its familiarity with government agencies such as the New York State Housing Finance Agency (HFA), the New York City Department of Housing Preservation and Development (HPD) and the NYC Housing Development Corporation (HDC). 

“We’ve always had a business that had such strong ties to the entities that finance affordable housing in New York City,” said Cannava. “We’ve always been working closely with them, and helping them meet their state and city housing goals and plans, and this has gone on for multiple governors and multiple mayors.”

And within a macrocosm, there’s always a microcosm. 

Last week, Cannava was in the Bronx, along with Wells Fargo CEO Charlie Scharf, as they joined U.S. Rep. Ritchie Torres, Bronx Borough President Vanessa Gibson and Douglaston Development Founder and Chairman Jeffrey Levine to celebrate the 10-year anniversary since the parties began developing 2856 Webster Avenue and 2868 Webster Avenue, a two-phase affordable housing project near the New York Botanical Garden.

“A very important part of the Wells Fargo DNA is helping communities, and such a big part of helping communities is doing everything we can in the housing space,” said Scharf, during an on-site press conference Jan. 12. 

Phase 1 was completed in 2023 and delivered 188 senior housing units for Section 8 renters, along with 12,000 square feet of retail space for Cherry Valley Marketplace, the existing grocery store on the site that had been a community staple. 

Phase 2, which is currently under construction, will deliver a 12-story, 277-unit affordable housing building, with 12,000 square feet to expand Cherry Valley Marketplace and add 40 parking spaces for residents. At least 60 units will be set aside for the formerly homeless. 

Wells Fargo provided $56.5 million in debt for Phase 1, and $84 million in credit for Phase 2, while the New York State and New York City HFA and HDC bonds totaled $116.2 million in Low-Income Housing Tax Credit equity to finance the development. 

“We really liked the fact that this was dealing with two parts of the population: the first part was seniors, and then the second phase was family,” said Cannava. “We felt that that was very, very unique and kind of the bedrock to creating communities.”

Wells Fargo has been particularly busy in the Bronx in recent years.  

Investments quarterbacked by the bank include $131.6 million in debt and $119 million in equity to build Bronx Point, a 542-unit affordable housing complex that will serve as the future home for the Hip Hop Museum; $189 million in debt and $160 million in equity for Peninsula I & II, a 542-unit affordable housing complex built on the site of the former Spofford Juvenile Detention Center; and $158 million in debt and $129 million in equity to construct La Central, a two-building affordable housing development in the Bronx that will deliver 496 low- to moderate-income units and 161 supportive units. 

Cannava noted that New York’s housing market is one of the most under-housed markets in the country, with a large population of more than 8 million and a deficit of housing, which creates huge demand for residents to apply for rental units in affordable housing projects. 

“When you talk about the credit, these buildings are often 99 percent or 100 percent occupied,” said Cannava. “The city and the state provide a lot of subsidies to help support these transactions, and they are investing their own money in the deals alongside us. 

“So it’s for those reasons that we’ve always been a big player and very supportive of the market,” he added. 

Brian Pascus can be reached at bpascus@commercialobserver.com.