Wednesday, April 30, 2014

In 2004, Forest City said an $80,000 income was too much for an affordable studio/1BR. Now that's in the works.

The demand for affordable housing in today's market is unending. Bisnow reported that Broadway Housing Communities' 124-unit development in Harlem's Sugar Hill drew 48,000 applications for the 98 affordable units. That's a .2% chance.

So the Atlantic Yards affordable housing--when it arrives, December 2015 at the earliest--will surely be in demand.

So, yes, the 73 low-income units and the 36 moderate-income units in the first tower will help the most desperate. 

The moderate- and middle-income units surely will be subscribed too.

But it's crucial to remember that the latter units-- 2012 estimated rents at right--would be way too expensive for most who rallied for the project.

(ACORN members were polled about support for affordable housing, but were not asked about affordable housing accessible to those in their income bracket.)

There's a huge mismatch at work between affordability by Brooklyn standards and affordability as calculated regionally. Affordable projects in New York City must base eligibility on regional Area Median Income (AMI), which is well above New York City income.

That means someone earning nearly $93,000 (as of 2012) could be eligible for an affordable studio, as noted in the graphics below--exactly what Forest City was decrying ten years ago.

The change

Over ten years, Brooklynites have not gained in their ability to pay for apartments, while affordability has grown ever elusive. Some 46% of New Yorkers are struggling to get by, a new report states.

As noted last week in a report from Comptroller Scott Stringer, from 2000 to 2012, median apartment rents in New York City rose by 75 percent (compared to 44 percent in the rest of the U.S.), while real incomes of New Yorkers declined.

About 400,000 apartments renting for $1,000 or less were lost--a sign that a project like Atlantic Yards, even if it had been fulfilled on the original schedule, would have been a drop in the bucket.

In some neighborhoods near the Atlantic Yards site, including Fort Greene, average real rents increased 50 percent or more over the 12-year period.

Who's to blame?

That makes the delay in Atlantic Yards affordable housing that much more poignant: the neediest have not seen their incomes grow, while overall area income growth has lifted the baseline for all affordable housing calculations, making it tougher to qualify for Atlantic Yards housing.

Project backers would blame the delay on opponents and critics. But Forest City's plans and promises were never realistic.

In November 2011, Bruce Ratner talked up his firm’s plan to build the world’s tallest pre-fabricated towers, an innovative, risky, and money-saving tactic, one that initially infuriated construction workers who’d aggressively rallied for Atlantic Yards.

The Wall Street Journal, without raising an eyebrow, reported Ratner’s rationale “that the existing incentives for developments where half the units are priced for middle- and low-income tenants ‘don't work for a high-rise building that's union built.’”

Of course, that’s exactly what Ratner proposed and the state approved--twice, after Ratner got permission to build at the density his firm found economically necessary. Sure, the economics had changed, but they had changed by 2009 when the state re-approved the project. (And, for the record, half the 6,430 units wouldn't be subsidized, just half the rentals: 2,250.)

And now, with the snag in Forest City's modular plan, its new joint venture partner/overseer, the Chinese government-owned Greenland group, plans to build three towers, two of them affordable, using conventional construction. Apparently now the numbers do pencil out.

The Atlantic Yards promise

In March 2004, Forest City's Atlantic Yards point man Jim Stuckey came to a Park Slope Civic Council-sponsored event, saying of Atlantic Yards housing, "From our perspective, we think creating affordable housing is for for teachers and nurses… electricians, police, for the average person who's working and trying to live in Brooklyn today. It's not creating housing for the doctors and lawyers and who people can afford a lot more than that."


Video courtesy of Battle for Brooklyn producers


"We feel there are a number of programs that exist today," Stuckey said. " For example, the city’s 20/30/50 program, the NewHOP program, you can have a family of one or two people earning as much as $80,000 and living in a studio or one bedroom apartment. You can have families of three or more earning as much as $140,000 and living in a one- or two-bedroom apartment. We don’t think that that’s affordable housing and we don’t think that many people here think that that's affordable housing."

Stuckey, however smooth and sympathetic he sounded, was missing some additional context. Later in the session, Rudy Bryant of the Pratt Center for Community Development noted that the median income in Brooklyn was about $26,000, so housing costs had to be substantially lower than the $80,000 Stuckey mentioned.

Changing AMI

Indeed, according to the 2005 Housing Memorandum of Understanding Forest City signed with ACORN, there were to be three affordable housing scenarios, all based on the then-current AMI of $62,800.

In the first scenario--the one initially promulgated to the the press--the income mix was the most affordable: the highest income for one person eligible to get subsidized housing would be $44,376.


In the third scenario--which Forest City soon adopted--the highest income for one person eligible to get subsidized housing would be $61,951.

Those numbers have changed. As of 2012, with an AMI of $83,000, the figure for one person had risen to $92,690, well above Stuckey's number. It's even higher now.

Reality vs. previous estimates

Other affordable housing proponents found that reality--the combination of gentrification and a shift in New York--has outpaced their seat-of-the-pants estimates of who should be eligible for affordable housing.

In 2006, Borough President Marty Markowitz said $80,000 should be a cap on incomes for those eligible.

In 2007, Council Member Bill de Blasio, now Mayor, said, “Definitely below six figures,” he responded. “Absolutely below six figures. Over $80 [thousand] I don’t think is what I’m thinking about, although there may be some exceptions.”

Now Atlantic Yards will offer the $93,000 studio.

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