Wednesday, May 13, 2009

Whither AY affordable housing: how little can they get away with building? Were promises ever realistic?

(This is one in an irregular series of articles about issues that a State Senate committee might address when it holds a hearing on Atlantic Yards.)

So, let's look at the promised Atlantic Yards affordable housing. 

How much are they supposed to build? How little can they get away with building? And were the promises ever realistic?

The affordable housing push

Affordable housing was one of the strongest selling points for the Atlantic Yards project; indeed, the slogan "Jobs, Housing, and Hoops" within about two years became much more about hoops, according to developer Forest City Ratner's propaganda.

Of course, the 6860 units of "mixed-income housing" touted in the flier at right are not all "badly needed." (After all, the total number was cut to 6430.) And many of the 2250 subsidized units are a lot more affordable than others, given that a good chunk--perhaps 900--would be rented for close to market rate

The opportunity for affordable housing drew a huge crowd to a July 2006 affordable housing information session, even as several attendees expressed dismay that so many of the subsidized units would be unaffordable to them.

"Real housing for the real Brooklyn"

Only the 900 low-income units, as well about half of an additional 450 units, fit with what the Daily News dubbed "real housing for the real Brooklyn."

In other words, 1125 units would go to the "real Brooklyn" represented by ACORN, which signed the affordable housing Memorandum of Understanding (MOU) and Community Benefits Agreement.

How many units a year?

How many apartments might that be a year? Well, if the project was to take ten years as (spuriously) promised, that's 112.5 units a year. Over 20 years, it would be 56 units a year. 

But, given Empire State Development Corporation (ESDC) CEO Marisa Lago's acknowledgement that the project could take "decades" and, given the reality that nothing has started in two-and-a-half-years, let's take 25 years as a ballpark figure.

That means 1125 units over 25 years--or 45 units a year. That's not much of a dent in the affordable housing challenge. I daresay a commensurate investment in outer-borough transit service would do as much good.

Smaller project possible

But there's no reason to think all the units promised would be built, or built in a timely fashion. Remember, the State Funding Agreement allows 12 years after the exercise of eminent domain and the delivery of property via condemnation to build Phase 1--and there's no timetable for Phase 2.

And the City Funding Agreement allows a Phase 1 some 44% smaller than promised. That led me to calculate that, given 1 million square feet of housing space, 1000 units, and a 30% requirement of affordability, only 300 affordable units would be built.

That calculation probably low-balled the total. The affordable units certainly would average well under 1000 square feet a unit, and many of the smaller market-rate units would be under that benchmark as well.

So let's add 20% and call it 360 units--over up to 12 years. That's still only 30 units a year.

Enforceability

The plan for affordable housing drew praise even from those critical of the project. In an August 2006 New York magazine cover story, Chris Smith cited "terrific and creative commitments in the Community Benefits Agreement, minority job training and below-market housing chief among them."

But are they really commitments? The requirement that 30% of Phase 1 would be affordable is part of the state documentation. 

The Community Benefits Agreement allows ACORN to go to court to seek injunctive relief. "While courts tend to favor monetary damage remedies, we believe we have a strong legal argument for injunctive relief since the goal of the parties to the CBA is community benefit rather than financial gain and it would be difficult to quantify the damages arising from the breach in financial terms," an ACORN spokesman told me in September 2006.

(No, Forest City Ratner could not get out of its obligation by paying ACORN $500,000, as has been reported.)

Moreover, even the weak requirements of the CBA would not necessarily transfer to a new owner if Forest City Ratner sold the project.

Questionable from the start?

But what if the commitments were unrealistic from the start? 

Atlantic Yards would require $1.4 billion in housing bonds, according to information the Empire State Development Corporation disclosed to the Public Authorities Control Board and made public only after the project was approved, in documents filed in the lawsuit challenging the AY environmental review.

(I had previously sought the information, in a 2006 Freedom of Information Law request filed with the New York City Department of Housing Preservation and Development, but I was stonewalled.) 

In May 2007, some six months after Atlantic Yards was approved, Shaun Donovan, then Commissioner of the Department of Housing Preservation and Development, told Congress that the city faced "an immediate crisis" because it lacked the capacity to issue bonds for the affordable housing projects planned.

And that problem was already evident in March 2007, as the New York Observer reported. It stands to reason that the problem had not simply cropped up that month. 

What did the ESDC know and when did they know it?

So the project may have been approved with no inquiry as to whether there would be enough bonds to support Forest City Ratner's plans.

I can't be certain, but several months ago, I filed a Freedom of Information Law request, asking the ESDC if it had considered the availability of tax-exempt bonds in evaluating Atlantic Yards. I haven't gotten an answer. Each month I get a letter telling me they're still looking for responsive records.

Maybe the Senate hearing can get some answers.

1 comment:

  1. Ratner's atlantic yards project is a classic bait and switch ... promise the moon, deliver nothing but crap.

    This is why the general public has such contempt and disdain for publicly subsidized sports arenas.

    Sure, sometimes these projects draw moderate support in public opinion polls, but whenever they're put to an actual ballot box vote, they're overwhelmingly defeated. (So much for public opinion polls ... they're as phony as a 2-dollar bill.)

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