Friday, February 14, 2014

From City Limits: questions about de Blasio's housing plan, and a call for transparency

Mayor Bill de Blasio by May 1 is supposed to release his plan to build or preserve (a big difference) 200,000 affordable units.

Meanwhile, former city housing official Kerim Odekon offers an illuminating essay in City Limits, Pricey Building Raises Questions for De Blasio Housing Plan:
On Goldman Sachs's website, Deputy Mayor [Alicia] Glen describes the Bradford (aka the Acacia, 1560 Fulton Street) , a 105-unit Brooklyn building she co-developed in 2010, as work that she is "particularly proud" of. In the short clip, Deputy Mayor Glen notes that 30 percent of Bedford Stuyvesant residents live in poverty and that officially 15 percent are unemployed. She then showcases the Bradford as a transformative project poised to provide needed housing and economic growth for the neighborhood.
Unfortunately, the Bradford represents a particularly poor approach to the creation of affordable housing and raises four fundamental questions that the de Blasio administration must address if it hopes to deliver necessary housing and equitable community development:

Affordable housing for whom? The majority of the Bradford's rents are out of touch with the needs of Brooklynites. While 20 percent of the units are quite affordable (mainly 1 bedroom apartments renting at $400 per month, set aside for individuals earning less than $18,000/year), 80 percent of the "affordable" units were initially set at rents of $1,900 per month for a 1 bedroom and $2,300 per month for a 2 bedroom. In 2010, half of all Bedford Stuyvesant households earned less than $35,000/year. This means that half of Bed Stuy families would need to pay 80 percent or more of their pre-tax income to live in one of these 2 bedroom apartments. Subsequently, according to filings at the City Register, the owners of the Bradford renegotiated and weakened the terms of their regulatory documents to increase the income limits by over 20 percent on almost half the higher rent "affordable" apartments—a practice usually reserved for projects experiencing difficulties attracting households within the stipulated income brackets. Given the demand, truly affordable housing in New York City should never face issues finding tenants. Subsidizing Goldman Sachs to build essentially market rate housing in Bedford Stuyvesant is a "trickle down" approach to community development, a strategy Glen has long championed.
Odekon raises several other issues, including:

  • Affordable where?
  • Affordable at what cost?
  • Affordable for how long?

The HPD response

HPD Deputy Commissioner Eric Enderlin, issued a response, in part:
While opinions may differ on the approach to take full advantage of programs created to spur affordable housing and the worth of the public benefit, it is deceptive to focus on one building. Mr. Odekon focuses on the Bradford, without acknowledging the critical relationship it shares with the Garvey, a permanently affordable housing project on the same block.

The Bradford and the Garvey are two mixed-income, mixed use projects that were financed and constructed under one master development plan. In the Garvey, which was built according to the Inclusionary program, all of the 78 apartments are permanently affordable to low-income New Yorkers, with rents at $494 to $782 per month for one-bedroom apartments and $597 to $943 for two-bedroom apartments.

Under the Inclusionary program, the additional floor area is the incentive provided to the developer in exchange for designating a minimum of 20 percent of the apartments in a building as permanently affordable to low-income households. This bonus can be used on-site to build a larger project, and/or it can be used off-site at a different property within a defined geographic area.
Odekon responded, in part:
The rejoinder quibbles about the semantics of exactly how the Garvey and the Bradford relate to each other in the City’s broken inclusionary housing program, and misleads readers to imply that these projects were developed under a fixed master plan. In fact, the description of the 2008 acquisition loan to Goldman Sachs/BRP states that all affordable unitswill serve tenants earning less than 130% of HPD’s Area Median Income, yet all 83 of the Bradford’s high-rent units have income limits 27-50% higher. It is bad policy to think that building one affordable housing building with public land,$10.7 million in City subsidies, and $7+ million Federal LIHTC subsidy investment (the 73 unit Garvey) automatically grants Goldman Sachs/BRP the privilege to build a separately financed high-rent and over-subsidized building (the 105 unit Bradford) on nearby public land...

Having high-rent apartments in an affordable building is good public policy, yet they should not compromise 80 percent of all units. This is not inclusive community development. The affordable housing crisis in New York City is not about a lack of $2,000/month one bedroom apartments in Bedford Stuyvesant – these apartments already exist in the neighborhood.
The public policy issues

Odekon concludes:
De Blasio campaigned to “hold developers’ feet to the fire, bargain harder, demand more, because [developers are] getting extraordinary value”.
He must have had over-subsidized and out-of-reach projects like the Bradford in mind. Unfortunately, HPD and its sister agency, the Housing Development Corporation (HDC), the public agencies entrusted to implement a multi-billion dollar housing plan, remain plagued by insufficient oversight and a culture of closed-door negotiations. As a result, buildings like the Bradford are over-subsidized despite agency neighborhood assessments showing significantly lower market rents and despite concerns raised by public servants about project costs. While recent efforts to increase transparency at HPD such as Local Law 44 are a step in the right direction, the law falls short of promoting true accountability. Full development budgets should be easily accessible online, not only to stimulate competition among the developers and contractors, but to ensure that public officials operate under the assumption that good-government watchdog groups and housing advocates are monitoring exactly what the City is spending taxpayer dollars on. With greater transparency would come greater efficiency; and HPD will need to operate more efficiently if Mayor de Blasio hopes to maximize the City’s limited resources to produce truly equitable community development.
Mayor Bloomberg’s New Housing Marketplace Plan made impressive gains subsidizing housing for wealthier New Yorkers to move into relatively lower-income neighborhoods such as Harlem and Bedford Stuyvesant, yet fell short when it came to requiring significant permanently affordable housing in wealthier communities across the city. Mr. Enderlin’s rebuttal implies there is no alternative to this type of planning model. Actually, a more equitable alternative path is possible, and it involves creating and mandating economically integrated affordable housing in all of the City’s diverse neighborhoods, accessible to a broad spectrum of New Yorkers. This is exactly the sort of “bold progressive change” that the public expects from the de Blasio administration.
(Emphases added)

Indeed, the Atlantic Yards saga shows how transparency has been limited. In July 2012, the New York City Housing Development Corporation held a hearing on the first Atlantic Yards tower, but with insufficient information about exactly what was planned.

Only a Freedom of Information Law request revealed Forest City Ratner's push to get more of the subsidized two-bedroom units allocated to higher-income "bands."

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