Skip to main content

From the NYT on de Blasio's housing policy: "the gauzy promise of an affordable neighborhood" around Barclays Center "has not *yet* been fulfilled"

From the optimistic Times editorial yesterday, Can New York Be Affordable Again?:
It is a timely and exciting mission. Too-slow growth and gentrification have shrunk the supply of affordable housing while greatly increasing New Yorkers’ anxiety about what their city is becoming. Mr. de Blasio’s answer is this: Build aggressively and densely, and demand that a significant portion of new units be permanently affordable. Use all means possible to protect what’s there, including strengthening rent regulations and tripling, to $36 million a year, the amount the city spends to protect tenants from greedy landlords in housing court.
The skeptics hit back almost instantly. Gov. Andrew Cuomo’s office pronounced one of the mayor’s ideas — a plan to create 200 buildable acres from thin air on a deck over the Sunnyside rail yards in Queens — dead on arrival. And residents in some neighborhoods where Mr. de Blasio hopes to build, worried that they were doomed to be overwhelmed by a tide of soaring rents and evictions, asked the million-dollar affordable-housing question: affordable for whom?
The success of the plan, laid out by the administration in a 116-page book of policy prescriptions, will depend on several factors. One is toughness: mandatory inclusionary zoning, stronger rent laws, an army of Legal Aid lawyers, stricter code enforcement against landlords who let properties decay.
Another is persuasion. Mr. de Blasio will have to convince New Yorkers that the huge construction binge he wants — including 160,000 new market-rate units plus 80,000 affordable ones — and years of noise and inconvenience will be for their benefit. And this, in turn, involves making the difficult argument that even though only a fraction of the new units will be affordable — 20 percent or 30 percent or more, depending — this will be enough to build a city within the city that is within a regular New Yorker’s financial reach.
That's hardly all that needs to be done. The increase in units will not be offset significantly unless the steady conversion of below-market and rent-regulated units stops or slows. Nor does de Blasio's plan project nearly enough units for poor New Yorkers.

Nor does it address a full reform of tax policy, including but hardly limited to a tax on pied a terre units. And, of course, housing would become more affordable if there are more middle-class jobs. Also, while de Blasio does plan some transit improvements, far more needs to be done; here's YIMBY's proposal re eastern Queens.

More from the editorial

It continues:
That is one reason the mayor has been talking openly about gentrification and promising to help batten down neighborhoods’ affordability before the wave hits. It is also why his administration has been dispatching officials to community meetings across the city where neighbors have been up in arms— for good reason. Brooklyn’s Barclays Center project gave developers and corporate tenants the tax breaks and profits they wanted, but the gauzy promise of an affordable neighborhood around it has not yet been fulfilled. In Manhattan, giant luxury towers still sprout skyward, while rich foreigners park their money in luxe apartments that stay empty.
By taking on affordable housing, Mr. de Blasio is making a full, multiyear commitment to a mission that, like “cleaning up Albany,” sounds vague and impossible. But Mr. de Blasio seems to mean it.
Cynicism is easy. Idealism is hard when you’re a politician who is making a huge promise, is expected to deliver and could lose his job if he fails. For the salvation of New York as a diverse, mixed-income city that is there for everybody, it’s essential that Mr. de Blasio gets this right. He needs to get hammering, starting now.
(Emphasis added)

Note that corporate tenants, unless you count the Brooklyn Nets and associated sponsors, haven't gotten tax breaks. And note that the language about "affordable neighborhood" suggests it might yet be fulfilled. It won't.

There will be 2,250 below-market units, but they will overall fuel gentrification, given the overall increase in household income, because 1) the Area Median Income (AMI) floats ever higher and 2) de Blasio has allowed the percentage of AMI in the next two all-affordable towers to exceed that promised in the Community Benefits Agreement and Affordable Housing Memorandum of Understanding.

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…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

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…