Skip to main content

The "housing will go to those that need it the most"? A closer look

So what's "affordable housing," anyway? It means that people pay 30 percent of their income in rent, according to the federal department of Housing and Urban Development.

Affordable housing can serve a variety of groups: low-income, moderate-income and middle-income, even though supporters of the Atlantic Yards project, like Brooklyn Borough President Marty Markowitz, have argued, "The jobs and the housing will go to those that need it the most."

The affordable housing plan for the Atlantic Yards project would provide 2250 affordable rentals (of 4500 rentals, plus 2360 market-rate condos), but only about 1125 apartments, half the affordable rentals, would serve those currently waiting for public housing or Section 8 vouchers. That's 16.4 percent of 6860 units.

That's because the plan is better described as a 50/30/20 mixed-income program, with 50 percent of the rentals at market rates, 30 percent for middle- and moderate-income renters, and 20 percent for low-income renters. After all, some 900 of the affordable units would rent for more than $2000 for a four-person family.

"Affordable"=low-income?

Indeed, the term "affordable" was initially used to describe only the lower-income housing, as noted in the accompanying graphic published in a 2/3/06 article from Courier-Life chain. (The graphic, apparently from Forest City Ratner, is obsolete, because it refers to only 4,500 total units, and also because it uses the seemingly-retired "Jobs, Housing, & Hoops" slogan.) The three categories track the city Housing Development Corporation’s 50/30/20 Mixed-Income program, from which the Atlantic Yards project would gain subsidies.

Indeed, at a 5/4/04 City Council hearing, FCR VP Jim Stuckey described the planned project as “50% market, 30% middle-income, 20% affordable.” Now he and others are using the term "affordable" more broadly. It's not inaccurate, but many people don't realize the range that the concept encompasses.

Affordable under $50,000?

At the 5/4/04 hearing of the City Council Economic Development Committee, there seemed to be agreement that affordable housing--meaning lower-income housing--should go to families earning below $50,000. (Click on Forest City Ratner's recently-issued rent chart to enlarge.)

James Sanders, chair of the Council's Economic Development Committee, said:
I would think a lot of us would agree, you are talking 20, 30, 40 thousand in annual income for a family, that is genuinely what we are looking for in the way of affordable housing. And if you are talking about moderate-income, you know, perhaps 50, 60, 70 something like that.

Borough President Marty Markowitz, a former tenant advocate, said:
Well to me affordable housing, middle-income housing is somewhere in the area of 50 to 80 thousand dollars, affordable housing is below that.

Housing cap should be lower

What should be the maximum income for a family eligible for subsidized housing in the Atlantic Yards project? At City Council hearings, Forest City Ratner and ACORN representatives contrasted the Atlantic Yards cap, which then was about $100,000 for a family of four, with affordable housing programs that have income limits as high as $140,000. (Note that the AY cap, according to the graphic at top, now would be above $113,000.)

But the appropriate contrast is the city’s 50/30/20 program, which then had a typical cap of about $110,000. In other words, Atlantic Yards plan offered only a slight improvement in terms of the cap.

When asked for ballpark figures regarding the income limit for affordable housing, however, politicians didn't think the cap should be as high as that eventually negotiated. At a City Council hearing, Markowitz suggested $80,000, while Sanders suggested $90,000.

Stuckey points lower

Council Member Bill DeBlasio noted:
And someone said that that figure could be upwards of 150,000 as an annual income for a family, on the high end of your moderate figure. I have a problem with that…

FCR’s Stuckey responded:
[I]f you are earning $140,000 that that is not considered to be an affordable housing unit or that you created. But if you have created a unit where somebody could, or a family could be earning 30, 40, or 50 thousand dollars, that that is very well an affordable unit.

Stuckey was leaving out a large percentage of the affordable units, but this was before the time that Forest City Ratner was consistently terming all the subsidized rentals "affordable." As initially projected, only a small majority (60% of 2,250, or 1,350) of the subsidized apartments would have been available to families earning $50,000 or less. Now, as I recently pointed out, fewer than half the units would be available to those families.

Actually, an improvement

Quizzed by City Council Member Charles Barron, FCR’s Stuckey tried to explain modifications of the subsidized component of the 50/30/20 program:
I think that we have an opportunity here today to create housing that goes beyond the program that exists today, so that we can reach deeper in to where the housing is really needed.

Stuckey seemed to be pointing to not only a lower cap but a broader range of incomes within the category of subsidized housing. Indeed, many affordable housing programs target only the poor or the relatively well-off, leaving a gap for those families earning 50%-100% of the Area Median Income, or AMI.

In the Atlantic Yards project, originally 900 of the 2250 affordable apartments were targeted to moderate-income people earning 50%-100% of the AMI.

That number has shrunk and, while the effort to reach moderate-income people still represents progress, the distribution of affordable rentals has skewed somewhat toward those better off. Now, only 450 units would go to people in that moderate-income category, with 450 additional units going to those earning above the AMI. Thus, some 40% of the units in the affordable allotment would have relatively high rent; a family of four would pay more than than $2000 a month.

Barron grills Markowitz

At the 5/26/05 hearing of the City Council Economic Development Committee, held a week after the Housing MOU was announced, City Council Member Charles Barron (right) grilled Markowitz. Barron argued that the project was not truly affordable, would foster gentrification, and was not as good as could have been negotiated with proper oversight.

Barron: The housing. Fifty percent is luxury, correct?

Markowitz: Market rate.

Barron: Market rate. That we can't afford.

Markowitz: Right. That's correct.

Barron: That we can't afford.

Markowitz: Yours truly as well.

Barron: That's right. Truly. Truly. Thirty percent moderate, right?

Markowitz: Moderate middle.

Barron: Moderate middle. Most of us can't afford that either.

Markowitz: That's not true.

Barron: Most of us can't. You can say not that's true all you want.

Markowitz (right): I know you can afford it.

Instant gentrification?

Barron: That's 80 percent. Eighty percent. Eighty percent. It's not about me and it's not about you, it's about the people. Eighty percent of our people who are in low-income brackets cannot afford this housing coming in. Twenty percent will be able to afford it. That's the reality. So, when you all say 50 percent affordable housing, that's not true. It is 20 percent low-income, and 80 percent is moderate to high. It's a market rate, cute little term. But 80 percent we can't afford. This is going to be instant gentrification. That community has already been gentrified. And with this proposal it will be instant gentrification. But you don't care about that because the Nets are coming. You gotta play ball. And let me tell you something else, and I'll let you --

Markowitz: I'll wait until you ask me a question, Councilman.

Was this the best way?

Barron: Yes. So those...You know we will, once you say jobs and affordable housing to us, the process goes out the window, and that's my concern here, that I think we could have gotten, even though you got a sweetheart deal you might think from Ratner, we could have done better if he had proper oversight, if we had the power over remapping, rezoning, upzoning, if he had to come through a body with power, that we would do better than what is happening now.

Markowitz: By the way, Council member, as much as those that need housing that make $20,000 a year and $30,000 a year, let me tell you also there are people that have worked for the City of New York that are teachers, firefighters, cops, regular civil service workers, that may earn 45, 50,000 dollars a year that are in dire need of housing too…. The jobs and the housing will go to those that need it the most.
(Emphasis added)

As noted, fewer than half of the affordable rental units would go to families earning $50,000 a year or less. A family with two wage-earning civil servants, with a total income over $100,000, would qualify near the top of the affordable housing category.

In New York these days, such families still face money struggles. But no one at the City Council hearings seemed eager to support subsidies for families with six-figure incomes.

Comments

Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.