Tuesday, May 29, 2012

WSJ on delayed Atlantic Yards affordable housing: no mention of modular gambit or KPMG report that said project was indeed buildable

There are a couple of interesting things unsaid about Atlantic Yards in today's Wall Street Journal round-up focusing on that project and Willets Point, Housing Pieces Delayed: 'Affordable' Apartments That Helped Sell Big Projects Have Yet to Materialize.

The newspaper reports:
At Atlantic Yards, the project's centerpiece basketball arena is nearing completion. But developer Forest City Ratner Cos. has yet to begin any of the 6,400 units of housing it once anticipated being built by 2016—2,250 of which would be for low- and middle-income families. Forest City has cited higher than expected costs and an inclement market, although it plans to break ground this year on its first building with 175 below-market rate units.

The delays have frustrated officials and given fuel to critics of the project, which went through a contested public approval process before the recession.

"They should do the affordable housing up front, now," said Assemblyman James Brennan of Brooklyn, who said the low- and middle-income housing aspects should be accelerated. "The only legitimate selling point for the entire project was the affordable housing."
Unmentioned, however, is the state agreed to give Forest City 12 years to build the first three towers and 25 years for the whole project, despite projections that the 16 towers would be finished in a decade.

The meaning? Bumps in the road or lies on the way?

According to the Journal, the "delays speak to broader challenges of building housing that is affordable to low- and moderate-income families in New York, once the main focus of Mayor Michael Bloomberg's housing agenda."

Well, yes, and no. The delays also speak to the willingness of the state to commission a dubious report from KPMG claiming that the project could be built in a decade, and the willingness of a now-retired Empire State Development Corporation official to dismiss the Kahr report, commissioned by community groups, that was far more pessimistic.

Forest City's commitment

The Journal reports:
At Atlantic Yards, the large number of affordable units—more than one-third—helped Forest City Ratner sell the project to elected officials and some community groups.

"That is of course what we're committed to doing at Atlantic Yards," MaryAnne Gilmartin, executive vice president at Forest City Ratner, said in an interview. "But it turns out not to be so easy."

The company plans to break ground on its first building before the end of the year, a date that has been pushed repeatedly. If the company doesn't start construction by May 2013, it must pay the city $5 million.

Unlike many low- and moderate-income housing developments, Atlantic Yards plans to use union labor, is being built in high rises, and has hundreds of millions of dollars in costs to acquire land, all of which make the development more expensive and challenging, Ms. Gilmartin said.

"We're really trying to do something that isn't something that's been done on a large scale in the city before," she said.
Of course, that project is exactly what was vetted and approved by the state.

Unmentioned is Forest City's plan, officially announced last November, to use risky/innovative modular construction at heights not previously attempted. Has Forest City given up on that?

At least the Journal points out that the start date for the first building "has been pushed [back] repeatedly." In January, I counted about ten times that the goalposts had been moved, with the timing "spring or summer." After that, the start was delayed until after the arena opens, and possibly early next year.

Note that the $5 million penalty kicks in if the building doesn't start by next May, but Forest City Ratner can gain a one-year grace period if it can certify a denial of city housing subsidies.

The Bloomberg record

The Journal's Eliot Brown summarizes the mayor's affordable housing record:
In 2005, Mr. Bloomberg called for building about 92,000 units of so-called affordable housing and preserving 73,000 units in which affordability programs were expiring.

But the city has shifted to preserving units—a tactic many housing advocates say is also needed. New construction is now likely to be roughly one-third of that total of 165,000 affordable units, said Mathew Wambua, the city's housing commissioner.
Earlier this month, the New York Times has reported, erroneously and generously, "On [City Planning Commissioner Amanda Burden's] watch, the administration has undertaken financing 165,000 units of affordable housing by 2014, of which more than 130,000 have been built...."

The phrase "been built" implies construction from the ground up, rather than preservation. No correction has yet been posted.




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