Tuesday, April 07, 2015

As plans for B3 emerge, rising rents; most units for $100K+ households; $20M more in tax-exempt bonds; disconnect with Final SEIS

Rendering of 38 6th Avenue,
On Monday, March 30, I attended the extremely brief hearing held by the New York City Housing Development Corporation (NYC HDC) on planned tax-exempt funding for numerous projects, including B3, the Atlantic Yards/Pacific Park tower known as 38 Dean Street.

The 243-foot, 23-story tower, also known as 38 6th Avenue, will be built at the southeast corner of the arena block, on land once occupied by several row houses, including the one that housed Freddy's Bar and Backroom. It's designed by SHoP Architects--also responsible for the arena and two other arena block towers, one under construction.

B3 will include 303 subsidized units, though the affordability deserves scrutiny. Most two-bedroom units will cost over $3,000, and well over half the units will go to households earning more than $100,000.

Subsidized units are skewed toward middle-income households rather than, as long promised, spread more broadly.

A small revelation

Attending the hearing were three Forest City staffers and a p.r. person, three people from NYC HDC, and one representative of another developer. Since no one was there to testify, the meeting ended as soon as it formally opened.


But it was useful in a couple of ways.

For one thing, in the few weeks between NYC HDC's announcement (excerpted above) that $75 million in tax-exempt funding was expected for this 100% affordable building, the fact sheet distributed at the meeting (left, click to enlarge, also reproduced at bottom) indicated that $95 million would be sought.

I followed up by asking why, and was told, "The total loan amount has increased closer to $95M due to income from the commercial space and increased 2015 AMI [Area Median Income] rents."

Note that NYC HDC had told me they would provide information about the tower before the meeting, but did not do so.

Increased rents

Indeed, rents are increasing--a good jump from the 2014 Area Median 
Income, but less so from the 2013 AMI.

Note that the "Area" in question includes not just New York City's five boroughs but also wealthy suburbs, which means a significant disconnect with the Brooklyn median income.

(The Brooklyn median income is $46,085, but for a household of 2.73 people, not 4 people, so it deserves an adjustment upward for four.)
The 2013 AMI = $85,900 for four-person household
The 2014 AMI = $83,900
The 2015 AMI = $86,300
Income maximums for new residents

Based on the new AMI, here are the income maximums for residents in the building. Note that the bands are higher than those promised in the Affordable Housing Memorandum Forest City Ratner signed with ACORN, thus still qualifying as affordable--as long as residents pay 30% or less of income for rent--but to better-off households.



Incomes at which rents will be set

The rents will be calculated at a discount from the maximum income; residents will pay 30% of the figures in the table below.


Potential rent, number of units

Below is my calculation of the rents for each unit, taking 30% of the figures in each box above and dividing by 12 monthly payment. The number of units per band is an estimate, since, as footnoted, some units may have more people, and they will pay a higher rent.

But it's clear that the building is skewed to Band 5--middle-income households.


From the Final SEIS

It's curious that the Final Supplemental Environmental Impact Statement (Final SEIS), issued by Empire State Development in June, assumed that the income range in the affordable housing would follow those long used for the project--with low-income bands maxing at 50%, and middle income bands at 160%--rather than the higher figure already agreed to by NYC HDC in May regarding the next two towers. (see letter at bottom here).

Planned configuration in B3 and B14, the two new all-affordable towers

Also, only 20% of the affordable units--not 50%--were supposed to be in Band 5, and 40% of the units--not 30%--were supposed to be in the two low-income bands.
From Final SEIS, Executive Summary

The fact sheet for B3 (aka 38 6th Avenue)


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