How many subsidized apartments for low-income families in first Atlantic Yards tower? Just eight 2BRs, as Forest City Ratner reneges on promise to build half the affordable space as 2BR/3BR units

How many affordable apartments would there be for low-income families--families that need two bedrooms or more--in B2, the first planned Atlantic Yards tower?

Only eight.

And that's out of 350 total units.

The building, which has been delayed nearly two years and has not yet broken ground, would include 130 studios, 180 one-bedroom, and 40 two-bedrooms.

Of those latter 40 units, 20 would be subsidized. However, only eight of them would be low-income, with monthly rents at $701.75 and $902.25, at least under current income guidelines.

The other subsidized "affordable" two-bedroom units--four each--would cost $1604, $2406, and $3007. It makes you wonder how much the market-rate units would go for.

Reneging on the pledge

Why so few larger units? For the first building, Forest City Ratner has reneged on its long-promised "goal" to ensure than half the affordable housing--on a square foot basis--would be two- and three-bedroom apartments.

And that was a key selling point to struggling families hoping for better housing, as noted in the screenshot at left, from the original AtlanticYards.com web site.

Note that the web site misleadingly implied that half the number of units--rather than square footage--would be larger units.

The pledge, with the "square foot basis" caveat, was part of the Affordable Housing Memorandum of Understanding the developer signed in 2005 with the housing advocacy group ACORN, and later incorporated into the Atlantic Yards Community Benefits Agreement (CBA). See screenshot at right.

The pledge was repeated in the November 2006 Atlantic Yards Final Environmental Impact Statement, Chapter 1, Project Description, which stated:

Affordable units would be reserved for households making between 30 percent and 160 percent of citywide Area Median Income (AMI) and 50 percent of these units (on a square foot basis) would be two- and three-bedroom units.

Now it seems abandoned--and for Forest City to meet the overall pledge, future towers would have to be skewed toward larger apartments.


Can they get away with it?

Apparently this path is OK, at least in terms of city oversight. According to rules promulgated by the New York City Department of Housing Preservation and Development, under the Inclusionary Housing program, a project must include a mix of affordable units that is either proportional to the market rate mix or includes at least 50 percent two bedroom units.

Guess which option Forest City has apparently chosen.

Think about it: how many families want to pay market rate for apartments in a tower next to a basketball arena, especially one that may be built via newfangled modular technology? Forest City likely concluded it has a better bet renting market-rate units to singles and couples.

That means smaller apartments, as indicated in the screenshot at right. And that means that most of the subsidized units would be small, as well.

The affordable studio apartments must be 400 square feet or more. The one-bedroom units must be at least 575. The two-bedroom unites must be 775 sf or more. The market-rate units, almost certainly, will be larger.

Both the 12/8/06 Memorandum of Mitigation Commitments and the updated 12/21/09 Amended Memorandum of Environmental Commitments produced by the Empire State Development Corporation provide lots of wiggle room. Both documents state:

Based on currently available information, the parties anticipate that the affordable housing units will be made available to households with incomes falling within the income bands set forth in the FEIS. However, the income bands may be adjusted to accommodate the requirements of any City, State or federal housing program utilized for the construction of the affordable housing, subject to City approval.

So too is City approval necessary for the mix of sizes. The building remains delayed, but Forest City Ratner in November announced their intention to build using modular technology, an effort to save money in the absence of extra subsidies.

We should know in a few months whether they will proceed with the modular plan, or instead use that plan as a threat to gain union concessions.

Could housing advocates make a stink? 

ACORN was contractually obligated to support the project--at least if it pursues the promised goals.

ACORN has been disbanded, but its longtime leader, Bertha Lewis, continues to support the project, unwilling, for example, to comment on the failure to hire an Independent Compliance Monitor required by the CBA.

And it successor organization is expected to help market the affordable units, which will be distributed via a city lottery, with half the units directed to residents of the three Community Boards containing the project.

Whatever the configuration, demand is such that the subsidized housing--at least the low-income units--will be hugely oversubscribed.

A misleading pledge

Not only is Forest City deviating from the pledge in the MOU and in the Final EIS, it exaggerated the pledge in public discourse.

Along with the screenshot from the AtlanticYards.com web site, look at the slide (left) shown to those who attended a July 2006 affordable housing information session at the Brooklyn Marriott.

It emphasized the role of larger units, stressing that about half of the "affordable units will be 2- and 3-bedroom units." Unmentioned was that the analysis would be on a square foot basis.

Similarly, in 5/20/05 coverage of the announcement of the housing plan, the New York Times summarized the plan: "half of them studios and one-bedrooms and half of them two- and three-bedrooms."

Looking at B2

Though Forest City Ratner emphasized the role of both two- and three-bedroom apartments, the first tower would not include any three-bedroom apartments, according to a fact sheet on the AtlanticYards.com web site and reproduced below.

Only 40 of the 350 units, or 12%, would be two-bedroom units. Of that total, 20 would be market-rate, and 20 would be subsidized.

But only 40% of the subsidized "affordable housing" is geared to low-income households, with incomes up to half the Area Median Income (AMI). The rest would go to moderate- and middle-income households.

What's 40% of 20? Eight.

That's the number of low-income families, for example, on the long list (128,000 as of December 2009) for Section 8 vouchers who might qualify.

Arguably, another 10% of the affordable housing is geared to the "real Brooklyn"--those who might qualify for public housing. If so, that means ten two-bedroom units would be available to those most needy.

What the mix could be

What if B2 included at least 50 percent two bedroom units, following city guidelines? That would means 175 such apartments, and, assuming no larger units, the remaining 175 units divided into studios and one-bedroom units.

What if 50% of the B2 square footage was devoted to larger units?

Assuming that the apartments would be all at the smallest size listed, in 2006 I calculated 719 studios (32%), 719 one-bedrooms (32%), 406 two-bedrooms (18%), and 406 three-bedrooms (18%).

If that ratio were applied to B2, then there would be, in total, 112 studios, 112 one-bedrooms, 63 two-bedrooms, and 63 three-bedrooms.

Divide by two for the affordable units.

The expected mix now, however, would be very different.

What would they pay?

Rent is based on Area Median Income (AMI), which includes not just all five counties in New York City but several wealthy suburban counties. When Forest City Ratner was discussing affordable housing in 2006, the AMI was $70,900, as in the chart below. The eligibility is divided among five income Bands.


Now, the AMI is $80,200.

Let's follow the same technique used on the chart: calculate the rent by taking the midpoint of each Band divided by 12 (to obtain monthly income), then multiplied by 30%. (Each Band gets 20% of the subsidized units, or 450 over the life of the project--but each Band also has a mix of smaller and larger apartments.)

I'll use only households with four people, who might want a two-bedroom apartment.

Midpoint for those in Band 1, the lowest income, is 35% of AMI, or $28,070. That translates into $701.75 monthly rent for a two-bedroom.

Midpoint for those in Band  2, the other low-income category, is 45% of AMI, or $36,090. Rent would be $902.25.

Midpoint for those in Band 3, the moderate-income category, is 80% of AMI, or $64,160. Rent for a two-bedroom would be $1604.

Midpoint for those in Band 4, a middle-income category, is 120% of AMI, or $96,240. That translates into $2406 for a two-bedroom.

Midpoint for those in Band 5, the higher middle-income category, is 150% of AMI, or $120,300. Monthly rent = $3007.50.

It makes you wonder what the market-rate units would cost. And it certainly suggests that the smaller market-rate units would be easier to rent.

B2FactSheetNov2011