Friday, July 17, 2009

Would 40% of AY affordable units be above market? Market-rate studios in Brooklyn's tallest building offer evidence

Three years ago, in July 2006, Forest City Ratner projected that "affordable" studios for the highest "band" (141%-160% of Area Median Income, or AMI) of those gaining access to subsidized units would cost $1861 a month. Given that AMI has gone up since then, the rent would be higher now, and likely would rise when and if units are built.

However, reports the New York Observer, when the 51-story Brooklyner opens next year, studios are expected to start at about $1550 per month. The studios will be small, 350 to 400 square feet. The affordable Atlantic Yards studios would average 400 square feet.

(At right, Forest City Ratner's July 2006 chart of projected rents.)

In 2006, the rent for AY studios among the second-highest affordable "band" (101%-140% of AMI) was to average $1488. With the adjustment to AMI, it's likely those rents also would be above $1550.

Exceeding the market

In other words, a significant slice of the subsidized housing--perhaps 900 of the 2250 units, as I wrote in April--would track or exceed market prices.

Also, note that rents on the upper-tier affordable units could be even higher, since, according to testimony at the May 29 state Senate oversight hearing, the AMI could go up to 165%. In other words, ACORN, whose constituency couldn't afford the upper-tier units anyhow, seems willing to compromise to ensure cash flow to partner Forest City Ratner.

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