Skip to main content

MAS Summit: is the path to sustainable housing changes in the housing code and work rules? Also, the savings from unsexy rehabs

What's the secret to developing sustainable and affordable housing? According to a housing panel at the Municipal Art Society's Summit for New York City Oct. 21-22, advocates might focus not on the availability of subsidies but on ways to bring construction costs down and to make better use of available space.

"The biggest impact you can actually have on the environment is live in smaller spaces and live in a shared household… and use mass transit," said Moderator Jerilyn Perine, Executive Director, Citizens Housing and Planning Council (CHPC).

She noted that nearly half the people in Manhattan live alone. "Since a single person consumes 53% more energy than a single person who lives with other people, this is an overconsumption of housing," she said.

CHCP has advocated for housing code changes to allow more people to live together and to revise standards for single units. "In other places in the world, they are rethinking how to use space on the inside," she said. "That sadly is not really happening here."

At the same time, Perine noted an "underconsumption" in neighborhoods where housing is overcrowded: some 750,000 families are doubled up, living with at least one other head of household.

High cost of construction

Julia Vitullo-Martin, Director, Center for Urban Innovation, Regional Plan Association (RPA), said that in New York construction costs are " disproportionately expensive," substantially more expensive than even in union-dominated cities like Chicago and Boston and "ludicrously more expensive than in nonunion cities like Dallas."

While a few years ago, that didn't matter much, given New York's success, "now we're in a very different environment," she said, "and some of these other cities are looking extremely attractive."

At an event last year at the Manhattan Institute, Vitullo-Martin's former office, the mayor of London, Boris Johnson, "made the astonishing comment that the city he feared most in the U.S. was Chicago."

She said that a Manhattan Institute study "a few years ago" of construction costs found New York's at $352 a square foot and Chicago at $163. (I'm not sure what type of building.)

More recently, she said, a commercial one-story building in New York was $215/sf, while Chicago was $187, Los Angeles $176, the District of Columbia $162, and Dallas $139..

Cost factors and CBAs

Vitullo-Martin said "everything" contributes to higher costs, including land, construction materials, the cost of shipping, and permitting and land use regulations.

"And to this we may soon be adding mandatory CBAs [community benefits agreements]," she added. "You may well think CBAs are good: why shouldn't communities get their cut? There may well be an argument, but truth is, that's going to be one more costly layer."

(Here's more of her critique of a recent report issued by Comptroller John Liu's task force.)

How to lower labor costs

Vitullo-Martin said that she and RPA colleague Hope Cohen have just started a study of labor costs, an "extremely expensive" factor, but subject to renegotiation.

"We've simply taken as a given high costs of wages/benefits," she said. "We're going to look at the uncompetitive practices, whether part of a contract, part of tradition--jurisdictional disputes where site gets shut down or work not done because it's the work of electrician or carpenter. They don't have those kind of jurisdictional disputes in Washington."

She said they'd studied a pair of matched residential towers, one built union, one non-union. The first took 30 months, at $365/sf. The second took 36 months, at $280/sf. "The builder believes second building better, because he didn't have jurisdictional disputes," she said.

"If green is our objective, we have to get away from the idea that buildings cost what they cost and government is simply going to make up the difference," Vitullo-Martin said. "Government isn't going to make up difference much longer."

Later, she was asked, "To what extent is organized crime and corruption being factored in your analysis of building cost, and are you advocating busting up of trade unions?"

Vitullo-Martin responded no to the second question, saying they were looking at work practices and jurisdictional disputes. She responded obliquely to the first question: "As for the mob, historically, the mob has been a problem in construction industry."

(In the Village Voice today, Tom Robbins writes Nailing the Mob's Builders: A contractor tells a billion-dollar industry's dirty secrets.)

The savings from rehab

The Enterprise Community Partners' Green Communities initiative has done a study that calculated it costs $1917 per dwelling unit to implement energy- and water-saving measures that save $4851 over the unit lifestyle.

Given that a lot of affordable projects dependent on government financing, Perine asked, "should government be subsidizing big new construction if they could do ten moderate rehabs?"

Bomee Jung, Program Director for Enterprise, said, "We do have an obligation to pay attention to these projects, not necessarily the sexiest [ones]."

Later, Vitullo-Martin added that "it would be very useful if city thought about zoning/permitting to unleash more extensive building," such as live/work zoning to allow both housing and small manufacturing or artists' space.


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…