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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.

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