Wednesday, October 29, 2014

Community victory? What the New York Times exclusive on Atlantic Yards settlement got wrong: sequence, affordability, city triumph, accountability

Now that there's a public discussion tomorrow, "Accountability and Atlantic Yards," it's worth looking at the settlement between members of the BrooklynSpeaks coalition, individual plaintiffs, and other groups preparing a lawsuit on fair housing issues.

The suit argued that delay in building the subsidized housing would have a disproportionate impact on African-Americans, as displacement trends mean fewer would be in Brooklyn Community Districts 2, 3, 6, and 8 to take advantage of the 50% preference to locals in affordable housing lotteries.

The settlement averted a suit and thus allowed the planned joint venture, in which the Chinese government-owned developer Greenland Holdings, bought 70% of the project going forward, forming Greenland Forest City Partners and thus (seemingly) rescuing Forest City.

The settlement is complicated, as is Atlantic Yards. Unfortunately, the New York Times misled the public through errors and omissions in its exclusive 6/27/14 article Plan Expedited for Affordable Housing Near Barclays Center in Brooklyn, which should have added caveats to its portrayal of a community victory. (I called it a "victory with flaws," before all the details emerged.)

The article exaggerated the pace of construction, downplayed the high rental rates for many units in the next two towers, claimed erroneously that the settlement addressed affordability levels, let city officials over-claim success on affordability, and failed to illuminate the compromises on accountability.

Settlement details

First, the settlement details. Forest City Ratner agreed to build all 2250 affordable units (of 6430 total) by 2025, rather than the previous outside date of 2035. (That means a 15-year buildout since the project was reapproved in 2009 and property transferred in 2010, far better than the 25-year buildout previously allowed, but also not the ten-year buildout long promised.)

Not actually "10 Years Early"
Also, two all-affordable towers would be started within the next year. Affordable housing must be built along with market-rate units. There are new penalties for delay, which would fuel the New York City Housing Trust Fund, which would fund affordable housing in the four Brooklyn Community Districts.

Finally, the settlement sets up a new monitoring body, the Atlantic Yards Community Development Corporation (CDC), with nine of 14 board members appointed by the governor, and one each by the mayor, Brooklyn borough president, Council Speaker, Assembly Speaker, and Senate President, after consultation with local community boards.

In exchange, the plaintiffs gave up their right to sue, not only on fair housing issues, but all claims regarding Atlantic Yards as of 6/27/14, though they can still sue if the agreement is not "materially complied with."

These gains came with question marks and omissions, ones that were not immediately apparent, especially in the Times. I already wrote about the Times exaggerated the gain, claiming the towers would be "10 Years Early" and "10 years ahead of the current schedule."

Next two buildings not both affordable

The first error may not be huge, but it should serve as a red flag. As shown in the screenshot at right, the Times reported that the next two residential buildings "will be entirely affordable housing."

However, that's belied by the graphic below that, which shows that the one building starting in December will be all affordable, while another will be condos.

And it's belied by another paragraph in the article, which states:
Forest City also expects to begin construction on two luxury condominium towers by December and July.
In other words, instead of building promised towers with 50% subsidized and 50% market units, Forest City--or, actually, the new joint venture--would build four towers that worked out to a similar configuration.

That's a gain in certain ways for the developer, because there's likely more profit in market-rate units that are in an exclusively market-rate building than in one in which residents must share with the hoi polloi.

It would have been more accurate to say the next two rental buildings will be affordable. I tried multiple times without success to get the Times to make this simple fix.

Were affordability levels specified?

The article states:
The new agreement specifies that a portion of affordable units would be for low-income families of four that make $48,000 or less, moderate-income families earning up to $88,000 a year, and middle-income families earning up to $104,000.
Actually, the agreement says nothing about the affordability levels. Nor do the affordability levels correlate with those previously announced in either the Atlantic Yards Community Benefits Agreement or the B2 modular tower, now stalled at ten stories.

More missed on affordability

Moreover, the figures provided do not represent the affordability levels in the next two towers, given that 50% of the units could go to households earning up to 165% of Area Median Income (AMI), or nearly $140,000. (Was that $104,000 a typo? If so, that's a major one.)

The Times let de Blasio claim that "we've secured nearly twice as many affordable units for our city investment," and let Deputy Mayor Alicia Glen claim that “We’ve fundamentally changed how developers are working with the city to deliver affordable housing,” she said.
The Times missed the real story: the affordability levels in these next two subsidized towers would skew significantly toward less affordability, as half the units would go to a middle-income cohort in which four-person households would pay nearly $3,000 for a two-bedroom apartment and commensurate sums for smaller units.

The city investment is less because those units are too expensive to even qualify for subsidies, as noted in the letters at bottom from the New York City Housing Development Corporation and as I explained in a long article for BKLYNR.

The BrooklynSpeaks press release when the deal was announced used the term "affordable" more than 40 times without defining it. Since then, BrooklynSpeaks signatories have said the actual affordability was outside the scope of negotiations.

Maybe so, but the parties did negotiate other issues, such as a one-time payment by Fores tCity of $250,000 to an Atlantic Yards Tenant Protection Fund.

And given the secret negotiations--the results announced as a fait accompli--it was both off-key and misleading to proclaim triumph without caveats. (Remember, Public Advocate Letitia James, a long-time project opponent but also one who pushed for accountability, said, "To negotiate this deal behind my back is totally unacceptable.")

What about accountability?

The Times article states:
“This project has been crying out for real public accountability, and the community has been crying out for affordable housing now,” said Michelle de la Uz, executive director of the Fifth Avenue Committee, one of the groups that signed the covenant. “I’m heartened that everyone realized you can’t have one without the other as part of realizing Atlantic Yards’ full promise.”
That remains to be seen. There's an inherent tension between getting Atlantic Yards built on a tight timetable and not cutting corners in construction, at least as shown in the construction of the arena. Note that the developer is already late on the arena green roof, though neither the developer nor the state has explained that.

The new Atlantic Yards Community Development Corporation (AY CDC) likely represents an improvement over the status quo, but its effectiveness remains unclear. The Times called it "a 14-member board responsible for ensuring compliance with the agreement, and for monitoring the mitigation of community impacts during the construction period."

Unmentioned is that the AY CDC is an advisory body, not a subsidiary charged with overseeing the project as a decision-making body, for which BrooklynSpeaks had steadily advocated.

Gib Veconi of the Prospect Heights Neighborhood Development Council, who signed the settlement with de la Uz, has argued that the new CDC is not much of a change, since the subsidiary also would have been controlled by the governor.

Perhaps, but it's notable how BrooklynSpeaks was willing to retreat from a long-held position. And surely Forest City Ratner and Empire State Development didn't want such a subsidiary.

That raises questions about how much the negotiators and political backers concerned primarily about affordable housing--note the stress in the press release--were willing to trade off regarding accountability.

The errors that were fixed

In the article, Times editors and reporter Charles Bagli were sloppy enough to get several basic things wrong, including the first names of Michelle de la Uz and MaryAnne Gilmartin, as well as the affiliation of people in the photo.

Those were quickly corrected. The more meaningful errors and omissions remain uncorrected.

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