Monday, August 31, 2009

The Daily News follows up on the housing guarantees, gets quotes out of FCR, ESDC, and ACORN, lets them off easy

Well, it's nice that the Daily News, alone among the press, followed up on my article last Thursday questioning the guarantees for Atlantic Yards affordable housing, but the omissions and errors deserve attention.

The article, headlined Weaker plan to finance Bruce Ratner's Atlantic Yards housing project, was posted today though, I'm told, was actually in the paper Friday.

The article begins:
The final version of a state plan for developer Bruce Ratner's Atlantic Yards project weakened guarantees that promised affordable housing would get necessary funding, new documents show.

Ratner has pledged to build 2,250 units of affordable housing as part of the proposed Nets arena and 16-tower project, but critics have questioned whether he'll ever come through.

A draft of the plan, obtained under the Freedom of Information Law by the blog Atlantic Yards Report, promises state and city affordable housing subsidies to fund those units.

"City actions include approval of funding . . . for affordable housing bond financing," an April 2006 draft of the General Project Plan states. "The State would also . . . provide funding for affordable housing bond financing."

Those paragraphs were deleted in later drafts. The current plan says the affordable housing is "expected" to be paid for with tax-exempt bonds from city and state housing programs.


Actually, it wasn't the final version that weakened guarantees; those guarantees were discarded in the spring of 2006, before the General Project Plan.

Questioning ACORN

The Daily News queried Forest City Ratner's affordable housing partner:
ACORN director and Atlantic Yards backer Bertha Lewis said she wished public officials would stop "mucking about" with the plans, but expressed confidence all the promised apartments would get built.

"Bruce Ratner's never wavered," she said. "I never look for anybody else to ensure these guarantees. We look directly to the developer to ensure the guarantees."


That's bogus. The Affordable Housing Memorandum of Understanding (MOU) ACORN signed required Lewis to publicly support the project. Forest City Ratner has bailed out ACORN with $1.5 million in grants and a loan.

Then consider that, in the March 2006 report ACORN prepared called Sweetheart Development: Gentrification and Resegregation in Downtown Brooklyn, ACORN specifically looked to government, not developers:
ACORN holds that any developer seeking tax abatements should be required to make at least 30% of new housing units affordable, and to tier this affordable housing for different income levels, ensuring that units are affordable, at 30% of household income, for all low- and moderate-income families.

As for Ratner not wavering, well, remember that the developer originally promised that 900 of the 2250 affordable apartments be go to moderate-income people earning 50%-100% of the Area Median Income (or AMI) but quickly switched the configuration, with only 450 units going to moderate-income people and 900 aimed at the middle-class, earning above the AMI.

How would the affordable housing guarantee in the Community Benefits Agreement (CBA) be enforced? The CBA provides for binding arbitration, as well as the opportunity to go to court to enforce the agreement.

Given ACORN's unwillingness to challenge Forest City Ratner, it's highly unlikely they'd go to court, and, should the developer cite the lack of housing subsidies, ACORN may just not have a case.

Checking with the ESDC

The Daily News asked the ESDC and the developer about the housing and their answers were reminiscent of that old Marx Brothers line, "Who you gonna believe, me or your own eyes?"

Empire State Development Corp. spokesman Warner Johnston couldn't say why the language in the plan was changed, but said the agency "remains committed to developing affordable housing with our partners at Forest City Ratner."

Forest City Ratner spokesman Joe DePlasco said: "The General Project Plan and the modified General Project Plan both include the affordable housing component and the developer remains 100% committed to what was agreed to."


These statements may not be false, but they're not very meaningful. The General Project Plan (GPP) may include the affordable housing component, but it does not enforce it. Nor is the approval of the GPP contingent in part on the availability of housing subsidies, as the early draft suggested.

Misreading Matlin

The article closes:
In an e-mail also obtained by Atlantic Yards Report, ESDC counsel Steve Matlin acknowledged there's no guarantee that funding will be available - but said that's Ratner's problem.

"Forest City will take the risk that adequate housing programs are in effect," he wrote. "The bottom line is that the affordable housing requirements do not go away if housing benefits are inadequate or are not available."


Actually, the State Funding Agreement gives the developer an out. In other words, current documentation suggests that the requirements are not enforceable.

Also missed in this article: there's no evidence that the state considered the availability of housing bonds when approving the project with an "anticipated" ten-year buildout, and there's no evidence that such bonds would be available. In other words, the promises of 2250 subsidized, "affordable" units over a decade just can't be believed.

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