Sunday, June 10, 2007

The moving target of affordable housing, and a borough president's boost

The City Limits Investigates (CLI) inaugural issue on affordable housing points out that, because increasing costs squeeze budgets, some housing developers "are using community support to convince borough presidents to contribute crucial funds."

CLI points to an ACORN project called The Rockaway in Brownsville, built on former city-owned land, with 64 units and $16.6 million development cost. The $500,000 from Borough President Marty Markowitz "is really the difference between affordable and not affordable," ACORN's Ismene Speliotis tells CLI.

Markowitz, a former tenant advocate, has begun to allocate more funds to housing projects. Last November, according to a press release, he gave $250,000 to an 80-unit project for seniors in Sunset Park called Sunset Gardens. The money will be used for landscaping, an emergency generator, and electronic entry doors, which are not covered by the federal grant for the project.

In May 2006, according to a press release. Markowitz contributed $500,000 to Schermerhorn House, a 217-unit supportive housing development in Downtown Brooklyn, to ensure that all the units remain affordable. (Presumably, without the grant, some of the units would be market-rate.)

A moving target

This all reminds us that affordable housing is a moving target. More subsidy means more amenities, or units made available to households with lower incomes. Less subsidy means the opposite. Affordable housing developers look to whatever sources possible to lower their costs.

Note that, despite Markowitz's fervor for the Atlantic Yards project, his budget is way too small to boost the project, more than one-third of which would be financed by scarce--at this point, too scarce--tax-exempt bonds.

It might seem that nonprofit developers have the edge over for-profit developers because they don't have to deliver a return to shareholders. Indeed, for-profit developers are hardly clamoring to build projects that contain only affordable units.

Then again, for-profit developers often build mixed-income housing--as planned for Atlantic Yards--rather than 100% affordable housing. And for-profit developers might argue that nonprofit organizations would have trouble building at a site as complicated as the Metropolitan Transportation Authority's Vanderbilt Yard; indeed, the only competing bidder after Forest City Ratner had been anointed was another for-profit developer, Extell.

On the other hand, were Atlantic Yards footprint, or simply the Vanderbilt Yard, divided into several parcels, and different goals were set, for-profit and nonprofit developers might compete for different projects.

The 2007 list

Markowitz's 2007 budget includes a $3 million Housing Development Fund, "which helps create additional units in affordable projects or adds amenities to affordable projects," according to a press release.

I asked his office for a list of this year's projects. The notes come from the list provided to me.

Bridge Street Development Corporation/Myrtle Avenue Project; $500,000; 85 units, Myrtle Avenue in Bedford-Stuyvesant.

Cypress Hills Local Development Corporation/Glenmore Gardens; $250,000; 48 units, Miller and Glenmore.

Fifth Avenue Committee/Atlantic Terrace; $300,000; 80 units, Atlantic and 6th avenues.

Sherlock Parkway; $400,000; 41 units, Atlantic, Eastern Parkway and Sherlock. (Also, $219,000 as an out-year commitment in FY08.)

Lutheran Healthcare/Sunset Gardens; $250,000; 81 units of senior housing, 44th Street and 5th Ave.

Ridgewood Bushwick Senior Citizens Council; $192,000; 16 units, Melrose and Jefferson Streets; money will maintain affordability.

LDC of East New York/New Lots Plaza; $250,000; 90 units, New Lots and Barbey.

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