Friday, August 15, 2014

Celebration for "Brooklyn's win in the fight for affordable housing at Atlantic Yards" downplays key issue: actual affordability

Fifth Avenue Committee (FAC) and BrooklynSpeaks will hold a summer celebration next Thursday, 8/21/14, as stated in the invitation, for "our win in the fight for affordable housing and accountability at Atlantic Yards."

(The graphic at right more narrowly cites "Brooklyn's win in the fight for affordable housing at Atlantic Yards." Neither use the new term Pacific Park.)

The free event, featuring music, dancing and a BBQ, will be held 6-9 pm, the FAC Center Garden, 621 DeGraw St between 3rd & 4th Avenues.

Did Brooklyn win?

But the victory announced 6/27/14 is quite flawed, as I've suggested. Yes, the new deadline for 2250 subsidized units--2025 instead of 2035--is meaningful. So too are new penalties, $2000 per month per delayed unit, to begin in 2025.

But the upcoming subsidized units, in two much-touted 100% affordable buildings, are disproportionately aimed at middle-income households. Rents will be well out of reach for most who've rallied or testified for Atlantic Yards.

Representatives of the FAC and BrooklynSpeaks recently went on TV to tout the victory and, thanks to uninformed interviewers, emerged without having to address actual affordability.

As I've written, half the subsidized housing in the next two 100% affordable towers, would go to households earning up to 165% of Area Median Income (AMI), or $141,735 for a family of four, or $99,330 for a single person. Those 2013 figures from the New York City Housing Development Corporation surely will rise.

Rents for those middle-income households will be based on 160% of AMI. If rent represents 30% of their income--it may be 35%--a four-person household would pay $3436/month. That's below market for a new two-bedroom rental around Downtown Brooklyn, but it's far closer to market than to low-income levels.

FAC and BrooklynSpeaks can celebrate some success. But even if the actual affordability was outside the scope of negotiations--secret negotiations, the results announced as a fait accompli--it's both off-key and misleading to proclaim triumph without caveats.

Not long ago subsidized units skewed toward households earning six figures was an opportunity for criticism. As Gib Veconi, a key BrooklynSpeaks negotiator, wrote 1/24/13 on his Patch blog regarding the first Atlantic Yards tower:
However, it turns out that “affordable” in the context of B2 doesn’t mean the rents charged will be affordable to working people being priced out of the neighborhood. It instead means the apartments are “eligible for government housing subsidies,” and (as I wrote in September) government regulations allow Forest City to market subsidized apartments in B2 to families with incomes well over $100,000. 
With even more subsidized units going to six-figure households, no wonder David LaRue, CEO of Forest City Ratner parent Forest City Enterprises, told investment analysts last week that "we have a structure in terms of the definition of affordable that we think is appropriate in the marketplace."

What was gained

It's certainly progress to ensure that all the affordable housing will be built by 2025, especially since increased gentrification, as the lawsuit prepared but not filed by FAC/BrooklynSpeaks, would continue to push African-American households out of the four Community Districts nearest the project.

The schedule improves significantly on the previous 2035 deadline but still would represent a 16-year buildout from the project's second approval in 2009, rather than the ten years originally promised.

Also, it's progress to enact penalties of $2000 per unit per month for the affordable housing not built by 2025, especially since no such penalties previously existed. However, the unavailability of subsidies or financing could provide a loophole.

And it's partial progress to have two all-affordable buildings, with at least 590 units, starting within the next year. One had to start by December, according to existing contracts.

(It's also progress, though not part of the victory claims, that 35% of the units in the next two buildings will be two- and three-bedroom apartments, though we don't know how they'll be distributed. In the first tower, in which the subsidized units were distributed evenly across five income "bands," the larger units were skewed toward the middle-income units. These next towers already have subsidized units weighted toward middle-income households.)

Also, the state agreed to create a new Atlantic Yards Community Development Corporation to monitor the project and provide public input--though some close neighbors remain skeptical of the lack of specifics.

Looking at the details

Despite the BrooklynSpeaks/FAC press release quoting an attorney as "thrilled to support low-income residents of Brooklyn in their struggle to keep affordable housing in downtown Brooklyn," the subsidized housing will skew away from low-income people and depart from earlier promises.

Of the 2250 affordable units promised, according to the Affordable Housing Memorandum of Understanding signed in 2005 by Forest City Ratner and ACORN, the breakdown was supposed to be:
  • 10% between 30-40% of AMI
  • 30% between 41-50% of AMI
  • 20% between 61-100% of AMI
  • 20% between 101-140% of AMI
  • 20% between 141-160% of AMI
(Those ratios, if part of a 50% market-rate building, as originally planned, would be cut in half in terms of overall units in the tower.)

The next two towers would include no market-rate housing, but the subsidized housing targets higher income levels:
  • 30% between 37-60% AMI
  • 5% between 80-100% of AMI
  • 15% between 130-145% of AMI
  • 50% between 160-165% of AMI
This is skewed in multiple ways. First, an inevitable consequence of time--or, project backers would say, delay--is that AMI keeps rising, from $62,800 in 2005 to $85,900 in 2013. Second, also out of anyone's control, is that AMI includes wealthier suburban counties, so it does not reflect reality in Brooklyn.

The next examples of skewing stem from decisions--surely discretionary, if not negotiated--made regarding these next two towers.

Third, the AMI "bands" have been stretched, in which low-income now goes up to 60% of AMI instead of 50%, and moderate-income does not go down to 61% of AMI but rather starts at 80%. The the "lower" middle-income band starts at 130% of AMI rather than 101% of AMI. And, of course, the "upper" middle-income band starts at 160% of AMI rather than 141%.

Such adjustment is allowed by city agencies financing the housing. However, it doesn't conform to what was long promised.

Fourth, and most glaringly, the distribution does not track that promised in the MOU. Of the total affordable units, 60% should be below 100% of AMI. Instead, in the next two towers, 35% will below that figure. Of the total affordable units, 20% should be in the highest affordable "band" but instead will be 50%.

The overall picture

At least the affordable housing is coming faster, say backers, and that's true. As Veconi tweeted in June: "180 units 4 <= 60% AMI = big acceleration. Yes need more, but getting these now matters 4 ppl facing displacement pressure."

And 30% of two all-affordable buildings surely yields more low-income housing than 20% of of a 50/30/20 building.

But the overall income profile of Atlantic Yards continues to skew upward. Along with the two 100% affordable rental buildings, Greenland Forest City Partners plans two market-rate condo buildings.

That works out to 50% market and 50% subsidized, with the subsidized units more expensive than in the MOU. Ultimately, according to Council Member Brad Lander, 40% of the affordable units will be low-income. (And they have to be, I believe, to conform to financing restrictions.)

It's not clear, however, whether the other 60% of affordable units will conform to the MOU or continue skewed as in the next two towers.

On TV, an odd victory lap

In an 8/10/14 interview with City and State, interviewer Nick Powell asked, without much knowledge of the back story, "The agreement that's in place right now, was this a long negotiation process, was there a lot of back and forth?"

FAC Executive Director Michelle de la Uz reminded him that  the original agreement "was actually hammered out by then-ACORN, now MHANY [Mutual Housing Association of New York], so that 35% of the total units would be affordable." (Actually, it was that 50% of the rentals would be affordable, since it was signed before Forest City added condos to the project.)

The terms were memorialized as part of the Housing Memorandum of Understanding and then the Community Benefits Agreement.

The "alignment" leading to settlement

de la Uz went on to note that the preference for 50% of the housing lottery slots is limited to residents of Community Districts 2, 3, 6, and 8. "So if you wait until 2035 to provide the promised affordable housing, really the thing that most people held onto as the most significant public benefit, that meant there was going to be a delay," she said, and that would disproportionately impact African-Americans.

"So we were prepared to file a fair housing, a civil rights lawsuit," she said. "We decided to reach out to Forest City, to the state. And with the city's help, as well, the mayor's help, to see if we could broker something, because there seemed to be some alignment about wanting to delivery the affordable housing faster. And we wanted to see if we could get some alignment on some other things that we wanted."

The "alignment," it went unmentioned, also had to do with the pending deal for the Chinese government-owned Greenland Group buying 70% of the project going forward. Nor did it have to do with a consensus on actual affordability.

Keep in mind that de la Uz was Public Advocate de Blasio's appointee to the City Planning Commission. That surely tempered potential adversarial elements of the negotiations.

Keeping accountable

Powell asked how the new Community Development Corporation (CDC) "can help keep Forest City Ratner accountable." (Actually, it would be appropriate to say Greenland Forest City Partners.)

de la Uz noted that "this is the only ESDC project of this size that doesn't have a separate subsidiary corporation... And considering the controversy, considering the amount of public benefits... considering the level of public investment.. it really was crying out of some oversight."

The CDC will have 14 members, with nine appointed by governor, five by local officials. "There's a real emphasis on ensuring there's consultation with the local Community Boards," she said. "Basically the main responsibility of that CDC will be to monitor the public benefits that have been promised  and to ensure that impacts are something that are mitigated as well. There is staff assigned and resources to do that."

Impact on gentrification

Powell asked if the deal would help stem gentrification.

"I think we need to be realistic about the project stemming the tide of gentrification," de la Uz responded. "The reality is that we've had an affordable housing crisis in the city of New York for over 70 years. And that has only gotten worse over the last several years. So, the provision of 2250 units that are affordable is definitely significant, but the demand far, far outstrips the supply of affordable housing. But, y'know, we need to do something. Certainly not doing anything won't help."

This would have been the right time to mention AMI levels. After all, in December 2009, BrooklynSpeaks stated that "One third of the affordable housing would go to those earning more than $70,000 per year – far higher than the $35,000 the average Brooklynite earns."

One BrooklynSpeaks principle was "Calculate affordable housing according to Brooklyn Area Median Incomes (AMI), not the much higher regional AMI." That not only didn't happen, the AMIs have gone in the other direction.

The new name Pacific Park

Powell asked about the significance of the new name.

The name, which coincides with Forest City's new partner, is "part of a larger emphasis on hitting a reset button... the past is the past, the future is the future," de la Uz said. "And I think they've been dogged, obviously, by a lot of controversy. And I think there are a number of positive aspects to the project. And I think the rebranding is part of highlighting the positive and hopefully letting go of the negative."

That's a charitable way of putting it.

Finally, an affordability question

Powell asked about AMI levels, and didn't get a full answer.

"In this case, the AMI levels were agreed to as part of that MOU by ACORN," de la Uz said. "The AMI levels are from 30 to 160% of AMI."

"Right now 100% of AMI is about $84,000 for a family of four," she said. (Actually, it's a bit higher.) "But Brooklyn's median income is closer to $45,000 for a family of four," she continued, noting that AMI has outpaced the rise in Brooklyn.

Regarding Atlantic Yards, she said, "Basically, if it's built as the agreements were made, years ago, then that would mean families earning about $25,000 a year to $130,000 would be eligible for the affordable housing. That certainly is a pretty broad range. There's need at all ranges, but much of the need really and largest gap is on the folks that have lower incomes."

That's true, which is why it's important to note that the next two towers will not be built according to the previous agreements.

Any changes, in hindsight?

"Looking back, ten years ago, would you guys have done anything different in terms of negotiating this agreement, in terms of pushing harder, at Forest City Ratner," asked Powell. "I'm always curious, if there are any regrets."

It was an uninformed question, because ten years ago, de la Uz was on the outside, not negotiating, while ACORN negotiated.

Still, she ignored that issue, as well as the issue of affordability, and said, "I think there are more lessons learned. Hopefully, there's been a message to the development community that you can't promise and not deliver, or promise and delay on your delivery of the public benefits."

"I think the level of scrutiny and accountability that the public demands... as a result of that level of investment into a private project," she said, "is one where I hope that the development community recognize they have to be forthcoming and timely with the public benefits."

"I think the lesson is partly on the other side," she said, criticizing the lack of state oversight.

"I think FAC and members of BrooklynSpeaks and local officials have been pretty consistent on our message," she said, "about needing to deliver on public benefits and the need for accountability."

Reaching the black community

Marjona Jones, former organizing coordinator for Brown Community Development Corporation and an organizer on the lawsuit, joined de la Uz on Here and Now on 8/10/14, a weekly Channel 7 program focused on African-American issues in the New York tri-state area.

Jones noted that "the agreement in 2009 did not include the community at all" and did not include the groups that signed the CBA [Community Benefits Agreement."

Actually, the agreement in 2006 didn't include the community, either. This current agreement does include some of the community, but it also missed some things, as noted above.

Host Sandra Bookman said at one point, "Let's talk about this current deal. It is pretty impressive."

de la Uz noted the acceleration of provision of affordable housing, the CDC, the "pretty stiff financial penalties" (no mention of the loopholes), and the two buildings that will begin soon. She didn't mention AMI, but did, upon prompting from Bookman, talk about the pre-housing lottery preparation seminars.

In closing, Bookman asked her guests to explain "why this is so important to people."

"What this means to folks on the ground," Jones said, "it's not a magic bullet. It's not going to solve the housing crisis, in itself, but it does give us access to affordable housing sooner. And it also gives us a seat at the table... the oversight group.. another piece of this and why it's different from the CBA is the government is part of it... this has teeth, and serious penalties."

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