Skip to main content

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.

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…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

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…