Skip to main content

Looming: 421-a reform and thousands of affordable units

Housing advocates in New York for months have been arguing for reform of the city's 421-a tax break, which subsidizes market-rate developments outside of an "exclusion zone" (roughly, 14th-96th streets) in Manhattan--and could create tens of thousands more affordable units.

In the "exclusion zone," developers must fund affordable housing in exchange for the tax breaks, but the market remains quite healthy; a study issued earlier this year calculated that $320 million in subsidies was unnecessary.

And in recent rezonings, such as for the Greenpoint-Williamsburg waterfront, the City Council has required affordable housing in exchange for the right to build somewhat larger buildings.

(I've dubbed the Atlantic Yards project a privately-negotiated zoning bonus, because the affordable housing deal Forest City Ratner signed with ACORN has been used to argue for the project's scale, which is a political rather than a regulatory issue. Atlantic Yards is already on track for the subsidies.)

421-a reform coming

Now, reform of the 421-a program is looming. Yesterday elected officials and advocates held a press conference arguing that 421-a subsidizes gentrification.

The New York Observer quoted East Harlem council member Melissa Mark Viverito: "We are taking tax dollars from working families in East Harlem and using that money to subsidize the construction of luxury condominiums across the street from them selling for over $1 million. Essentially, we are asking people from El Barrio to pay to price themselves out of their own community."

As Crain's New York Business reported, they asked that 30% of the units created by the tax break be affordable.

According to the Daily News, Assemblyman Vito Lopez (D-Brooklyn), who chairs the committee that would revise or extend the law by the end of 2007, the Williamsburg rezoning worked. "The real estate developers didn't run; they kept building," Lopez said. "It just cut into their profits a little bit."

Devil in the details

At issue is exactly how to revise the program, which was launched in 1971 to spur construction in a moribund city. The New York Sun reported, program critics want to make sure that all 421-a tax breaks require affordable housing--and that developers not be able to fulfill their obligation by building the affordable units in low-cost neighborhoods (as in the Bronx) but in the same area where they build the market-rate units.

That's not what a mayoral task force is thinking, however, and those recommendations, which are due shortly, are expected to be influential--and fuel for a tussle with the City Council.

The task force, according to a source familiar with its work, is expected to extend the exclusion zone only to certain neighborhoods--larger parts of Manhattan, waterfront blocks in Brooklyn and Queens, parts of Downtown Brooklyn and DUMBO (both sites of furious market-rate construction), and perhaps even along the Flatbush Avenue corridor (which would bump up against the Atlantic Yards project).

The administration is, however, expected to propose eliminating the certificate program, which allows developers of housing in Manhattan to fulfill their obligation by funding affordable housing in cheaper neighborhoods.

Manhattan is key

Why isn't their more momentum to reform the law? "The market now assumes the program as it is currently," the source said. "It will felt by developers as a takeaway because they currently get a preposterously rich benefit. So we'll see as it goes through City Council."

Even though the 421-a program is glaring in Brooklyn, given the market-rate housing it's funding in neighborhoods in and around downtown, the vast majority of the subsidies go to Manhattan. So the extension of the zone in Manhattan would have a significant effect as a start, since if the tax revenue went to a trust fund, it could be distributed around the city.

Still, advocates in City Council are likely to point to the need to balance development in their neighborhoods. For example, City Council Member Letitia James, who represents Prospect Heights and Fort Greene, has introduced a bill to eliminate the exemption in her the 35th District.

Misused certificates

Part of the problem is how the certificate program works. As the New York Observer recently reported:
Outer-borough builders earn four or five certificates for each unit of affordable housing they produce, and then sell the paper for $12,000 to $20,000 each to Manhattan developers to qualify for 10-year tax abatements on market-rate condos and rentals. At a hearing in June, Jon Furlong, an advocacy associate at Habitat for Humanity, testified that a building at Trump Place on the West Side would receive $12 million in tax breaks for paying $2 million in certificates.

The article noted that, with the Greenpoint-Williamsburg rezoning, Lopez persuaded Housing Preservations & Development Commissioner Shaun Donovan to eliminate the certificate option, thereby requiring that the affordable housing be located on the same very expensive waterfront property on which the luxury condos would go.

More units coming

The bottom line, according to the Observer:
Mayor Bloomberg is counting on $200 million in revenue from the reforms to meet his goal of creating or maintaining 165,000 affordable-housing apartments citywide by 2013.

In the best-case scenario, Atlantic Yards would include 2250 affordable units by 2016. So those supporting the Atlantic Yards project because of the affordable housing aspects should keep an eye on the larger picture.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

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…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…