Skip to main content

Dissecting de Blasio: much of the "100% affordable housing" is hardly for the neediest

At the 12/15/14 groundbreaking for the new Atlantic Yards/Pacific Park tower at the corner of Carlton Avenue and Dean Street, Mayor Bill de Blasio had his mantra. "There are very few phrases I like better than 100% affordable housing, so this program is off to a good start," he declared.

"At 535 Carlton, to me this is exactly what we came here to do: 298 units, all affordable," he added. "This is a symbol of what we intend to do with our affordable housing plan over and over and over and over."

Did he really believe it?

"Affordable" merely means "income-linked." Had de Blasio said that half of the units would go to households paying more than $3,000 for a two-bedroom unit (and commensurately for other sizes of apartments), he would have been force to recognize that much of this "affordable housing" clearly does not go to those most in need.

(As I explain separately, Atlantic Yards backers for years actually used the phrase "affordable and middle-income housing.")

Fully half the units in this "100% affordable" rental tower will be geared to middle-income households earning up to 165% of Area Median Income, or AMI. Same for a second tower, as noted in the chart below. Both will be twinned by 100% market-rate buildings, which lowers the overall "affordability" percentage.

Income eligibility for next two "100% affordable" buildings

Income eligibility for next two towers.
The configuration differs significantly from the arrangement in the Affordable Housing Memorandum of Understanding that Forest City Ratner signed with ACORN in 2005, and which was incorporated into the Community Benefits Agreement.

Note that 40% of the affordable units are supposed to be low-income, but only 30% in the next two buildings would be low-income.

While only 20% of the affordable units were supposed to go to the best-off cohort, earning 140% to160% of AMI, instead 50% would go to the best-off cohort, earning as much as 165% of AMI. And 15% would go to another middle-income cohort, earning up to 145% of AMI.

Potential rents for next two "100% affordable" buildings

Potential rents for next two "all-affordable" buildings, based on 2014 figures. Upon opening, the rents should be higher.
Note that rents will be calculated on a somewhat lower AMI than the actual eligibility ceilings for each category.
When "affordable" studios cost more than $2,000 a month and two-bedroom units well over $3,000, this kind of middle-income subsidized housing requires significant advertising, as with Hunters Point South.

In fact, in de Blasio's ambitious plan to build or preserve 200,000 affordable units, only 11% --not 65%, as in the next two towers--are supposed to go to middle-income households.

The dismay, and the need

The few times actual rents were shared in public with potential renters, as at 2006 information session, those desperate for "affordable housing" expressed dismay. Since 2006, income-linked rents, based on rising Area Median Income (AMI), have floated far higher.

The authoritative NYU Furman Center for Real Estate and Urban Policy, in a 2013 report, noted out what seems intuitive: low-income renters are more needy:
Between 2002 and 2011, the proportion of households that were rent burdened increased as much for moderate-income households as for low-income households. However, rent burdens remain significantly higher for low-income renters. By 2011, only one out of four moderate-income households was rent burdened, while a full 80 percent of low-income households were rent burdened (and half were severely rent burdened, having paid at least half their income to rent and utilities).
While de Blasio could have made Atlantic Yards/Pacific Park more affordable by calculating rents at a lower percentage of AMI, he agreed to the opposite, as noted above.

The Community Benefits Agreement was supposed to fight gentrification. The "100% affordable" buildings, while providing a chunk of low-income housing, have a limited impact.


From the Community Benefits Agreement
Deflecting attention through "affordable" vagueness

Mayor de Blasio, developer Forest City Ratner (and partner/overseer the Greenland Group), and backers practice three strategies to deflect attention from this glaring compromise with the developer's push for profit.

The main strategy is vagueness. Keep saying "affordable housing" untethered from specifics, as in the press release issued in June after the new timetable was announced.

“This is a testament to what’s possible, in terms of real affordability for New Yorkers,” said Jonathan Westin, Director of New York Communities for Change, in de Blasio's press release last month.

"The groundbreaking at Pacific Park is the realization of our City’s promise to preserving not only the affordability of communities across Brooklyn, but its economic and cultural diversity,” said Council Member Laurie Cumbo.

"The local community desperately needs access to affordable housing and this is a meaningful step forward in fulfilling that need” said Michelle de la Uz, Executive Director of the Fifth Avenue Committee, who negotiated the settlement in June that advanced the project buildout from a 2035 "outside date" (or a 25-year buildout), to 2025 (a 15- or 16-year buildout).

More substantial, but still questionable, arguments

The second argument, as de la Uz and allies have pointed out, is that this new schedule is far better than the previous one--which itself was extended in 2009 from the long-promised ten-year buildout. 

That's true, but they don't say it's accomplished, in part, by "100% affordable" buildings with most units out of reach of average Brooklyn households.

They say there's now room for new advocacy for more affordability, since actual affordability wasn't part of the settlement negotiations. That's true, but they didn't have to settle.

The third argument, as Bruce Ratner said on Inside City Hall 7/1/14, "We don't have anything there now." (That papered over the smaller amounts of working-class and market housing that was demolished) "Whatever you're adding is additive."

Yes, Atlantic Yards/Pacific Park adds a huge amount of density on blocks formerly low-rise and/or zoned for manufacturing.

But the whole point in overriding zoning was that Ratner's company pledged to build 2,250 units of affordable housing--with a specific configuration--over ten years. He and political backers changed the rules, but they now want full credit for doing something.

The fourth argument, such as in the 1/5/15 Next City article, Inside the Gamble That Could Make or Break Bill de Blasio: Can the Market Solve an Affordable Housing Crisis?, is:
But the Atlantic Yards deal reflects an uncomfortable truth of housing construction in New York: Even units affordable to those who make considerably more than the city’s median income are not being built without subsidy. No one sees that changing in the near future.
As I commented:
I'm dismayed by implication that the city's Atlantic Yards deal was A-OK because affordable units are costly to build. There are many elements to Atlantic Yards, but significant--and unmentioned--is that developer Forest City Ratner got a huge density bonus, as the state overrode city zoning to build at the scale Forest City thought it needed to provide affordable housing at the configuration it promised. (Forest City also bought, or contracted for, land well below the current market.)
Skewing the story

"We intend to take every opportunity, push every partner, and stretch every dollar further as we take on this affordability crisis,” de Blasio stated in the press release last month, which added:
The first building at Pacific Park, B2, broke ground in 2012 and has 50 percent market-rate apartments, 30 percent middle-income and 20 percent low-income units. 535 Carlton has greater and deeper affordability. It is 100 percent affordable, with 50 percent middle-income, 20 percent moderate and 30 percent low-income units.
(Emphases added)

That wasn't true, for two reasons.

First, the frame. Yes, 535 Carlton as an all-affordable building has more affordability than B2. But B2 was an exemplar of a 50/50 affordable building, half-market, half subsidized, which was supposed to be the pattern for all the rental buildings. 

535 Carlton should not be seen in a vacuum but rather twinned with the market-rate, "unaffordable" condo building that also started last month. In other words, instead of splitting subsidized and market units in one building, they're divided among two buildings.

In fact, as shown in this potential--and so far accurate--chart, the next two "100% affordable" buildings will be twinned with condo buildings, then followed by two more market-rate buildings, one a rental, one a condo. That's four 100% "unaffordable" buildings.

Then, after another 50/50 (or 50/30/20) building, there would be two more market-rate buildings, one a condo, one a rentals. Finally, there'd be three more very larger towers split between "affordable" and market-rate rentals.


What's moderate-income?

Second, it was misleading for de Blasio to say "100 percent affordable, with 50 percent middle-income, 20 percent moderate and 30 percent low-income units."

Put aside the low-income percentage, which is accurate. Put aside the 50% that is clearly middle-income, for those earning up to 165% of AMI. And put aside the 5% that is clearly moderate-income, those at 100% of AMI.

What about the 15% who are earning up to 145% of AMI and paying rent calculated from 130% of AMI?

Is that really moderate-income? No.

The New York City Housing Development Corporation's Mixed Middle-Income Program delineates the categories:
A minimum of 30% of the units would be affordable to moderate-income households earning between 80% and 100% of AMI. A maximum of 50% of the units would be affordable to middle-income households earning up to 130% to 160% of AMI. 
In other words, households at 145% of AMI are clearly middle-income, not moderate-income, as de Blasio claimed.

According to the authoritative NYU Furman Center for Real Estate and Urban Policy, in a 2013 report and graphic:
Based on guidelines from the U.S. Department of Housing and Urban Development, low-income households have an income up to 80 percent of the area median income. Moderate-income households have an income ranging from 81-120 percent of the area median income. Middle-income households have an income between 121-200 percent of the area median income.

Comments

Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.