Wednesday, August 02, 2006

Bait and switch? Another look at the 50/50 affordable housing promise

Has Forest City Ratner broken its pledge to ensure that half the units of housing at the Atlantic Yards site would be affordable? The record says yes--unless you accept the most lawyerly of explanations.

At right, an excerpt from a 2004 flier sent to thousands of Brooklynites, which stated that half of the units in the project would be affordable.
(Lawyerly alternative explanation: Half of the 4500 mentioned units would be affordable. You never know if more would be added.)

The Housing MOU announcement

On 5/17/05, the Housing Memorandum of Understanding (MOU) was signed by FCR and ACORN, which advocates for low-income and working-class people.

At a press conference two days later, a press release stated:
Mayor Michael R. Bloomberg, Forest City Ratner Companies President & CEO Bruce C. Ratner and Association of Community Organizations for Reform Now (ACORN) Executive Director Bertha Lewis today announced that approximately half of the 4,500 new rental units in the proposed Atlantic Yards development will be set aside for low- and moderate-income households using financing tools created by the Bloomberg Administration's New Housing Marketplace plan.
(Emphasis added.)

Note that the press release cited the new rental units rather than the entire residential project. (Lawyerly alternative explanation: That leaves room for non-rental units to not be part of the 50/50 plan.)

Brooklyn Borough President Marty Markowitz, in his own press statement, did not qualify it by limiting his analysis to the rental units. He cited "a commitment to build a full 50 percent of Atlantic Yards housing as affordable -- more than 2,000 apartments."

A look at the document

The text of the MOU itself refers to the Residential Project as 4500 units of housing, and states that the parties agree to developing half of the Residential Project as affordable. It does not say that they agreed to develop half of the Residential Rental Project as affordable. In fact, it talks about a projected number of 4500 units, which suggests that the same ratio would apply to a different projected number. (Lawyerly alternative explanation: Well, condos we added later aren't residential. Oops, maybe they are.)

At another place in the document it states that the parties are committed to developing half of the 4500 rental units as affordable. (Lawyerly alternative explanation: That leaves room for non-rental units to not be part of the 50/50 plan.)

Loophole alert

Another clause hinted at changes: If the projected number of residential units should increase for any reason that the Developer determines to be economically necessary, both the Developer and ACORN will work towards developing a program that follows the same guidelines and principles set forth in this document.

So that means a goal of 50/50. (Lawyerly alternative explanation: All it says is "work towards.") Note Jim Stuckey's conditional language at the affordable housing information session last month: “We will be working on putting [it] together.”

All in the plan

A week after the MOU press conference, on 5/26/05, Forest City Ratner announced changes in the plan at a City Council hearing, proposing either an addition of 1500 market-rate condos while maintaining the same amount of office space, or reducing the office space and planning for 2800 condos.

When the Empire State Development Corporation in mid-September released its Draft Scope of Analysis, the numbers were set: 4500 rentals and 2800 condos. On March 31 of this year, Forest City Ratner shaved back its plan, cutting 440 condos, for a total of 2360.

Affordable condos

As noted in Paragraph 5 of the MOU, if the number of units in the project should increase "for any reason that the Developer determines to be economically necessary," the developer and ACORN would try to follow the 50/50 program.

However, as the excerpt at right indicates, Forest City Ratner has agreed to build 600 to 1000 affordable for-sale units, not 2360 units. And that agreement is not part of documents released by the Empire State Development Corporation. The General Project Plan states:
The Project would also create between approximately 5,790 and 6,860 affordable and market-rate housing units, with fifty percent of all rental units being affordable to low- and middle-income families, resulting in approximately 2,250 of such affordable units,

Bertha Lewis's explanations

New York ACORN head Bertha Lewis has persistently declared that the 50/50 plan is still in place. In the fall 2005 issue of the Brooklyn Standard, she cited the "50-50 balance for affordable housing, one of our proudest and greatest accomplishments as an organization."

At a forum on the housing plan last February 28, Lewis declared that the whole project would be 50/50. As I wrote:
“If this project passes [state review], it’s 50/50 baby,” she told a group of reporters pressing her after a panel last night. “The MOU says 50/50 period.”

What the Times said

An article in the Times last November offered a somewhat charitable interpretation of the changes in the plan:
The agreement signed last May between Mr. Ratner and Ms. Lewis applied only to the 4,500 rental units envisioned in the original plan. But it included a provision that if the developer added more residential units, the firm would develop 600 to 1,000 moderately priced for-sale units on or near the project site, in effect offering something close to a 50-50 ratio for all the housing associated with the project.
At the time, officials of Forest City Ratner said they were already contemplating adding 1,500 condominium units, in part because community leaders had pushed Mr. Ratner to include more housing in the project. That would have given the project 6,000 units of housing. But during a City Council presentation in May, Mr. Stuckey said the developer was contemplating adding an extra 1,300 for-sale units, bringing the total to 7,300 units.


However, community leaders were surely not pushing for more market-rate condos.

Bait and switch?

The Times let FCR offer a lawyerly interpretation of the MOU:
Forest City Ratner officials said that they had remained faithful to the Acorn agreement, which did not require that half of the new for-sale units be priced affordably. But if the developer chooses to build the maximum of 1,000 moderately priced for-sale units described in the Acorn agreement and builds them off-site, then the total number of for-sale and rental units associated with the project would reach 8,300, of which 3,250 would be priced below market rates -- about 40 percent.

And Lewis told the newspaper that the 50/50 goal was attainable:
Ms. Lewis said that Acorn remained a strong supporter of the project and of the agreement with Forest City Ratner. But she said she was negotiating with the company, and with the government agencies that help subsidize housing, to help make a greater proportion of the for-sale apartments available below market prices.
''We know that when we get through this thing, half of all the housing is going to be affordable -- half of the rental, half of everything else,'' she said. ''We haven't gotten down to the last part of this. But our whole principle is 50-50.''


However, boosters of the project, including Lewis, have justified the "extreme density" because of the inclusion of affordable housing. The only way to equalize the ratios would be to continue to downsize the project--or to promise even more offsite affordable for-sale units.

ACORN's obligatory support

As the excerpt from the MOU at right shows, it's ACORN's obligation to publicly support the plan. That's not unusual in Community Benefits Agreements, but this agreement requires support only if the affordable housing project continues, as described in Paragraph 1. But that's the paragraph that says that half of the Residential Project--without qualification--would contain affordable housing.

But Lewis wrote in City Limits this week:
Under our agreement with Forest City Ratner, 50 percent of the 4,500 rental units in the project will be affordable to low-, moderate- and middle-income families.

Why doesn't she blow the whistle? Maybe because, as she wrote in that City Limits article, her goal is "fighting like hell every day to get the best deal you can."

Getting ACORN on board

The Times article explained why office space was traded for luxury housing:
Officials of Forest City Ratner said they eventually realized that they would have to reduce the amount of commercial space, to accommodate condominium units that would help pay for the project, including the below-market rental housing.

As I pointed out, the explanation is disingenuous. Just a week after the Housing MOU was signed, Forest City Ratner announced plans to increase the amount of housing by at least 1500 units.

The evidence suggests that Forest City Ratner had the condo plan in the cards for a while, but wanted ACORN on board first.

And now history is rewritten. As it states on the Atlantic Yards web site:
FCRC Commitment: 50% of Rental Units to be Affordable

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