Friday, June 19, 2015

City, state, electeds help Forest City spin "100% affordable" building geared mainly to $100K+ households as a "model"

Not modular. Perspective skewed.
It's "Orwellian, almost."

City and state officials--who work for the public, remember--have, in service of developer Greenland Forest City Partners, contributed to a deceptive, misleading portrayal of the affordable housing in Atlantic Yards/Pacific Park.

They would hardly mention that subsidized units are skewed toward households earning six-figure incomes, as I described in a long article last year for BKLYNR.

Yesterday came a press release (also, at bottom) for the 23-story 38 Sixth Avenue, aka B3, located at the southeast corner of the arena block, Work Begins on 38 Sixth Avenue at Pacific Park Brooklyn:
CLEVELAND and BROOKLYN, N.Y., June 18, 2015 -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB), a member of Greenland Forest City Partners, the joint venture developing the Pacific Park Brooklyn project, today announced that the joint venture has closed on financing for the construction of 38 Sixth Avenue, a 303-unit, 100-percent affordable apartment building at Pacific Park Brooklyn, and that work has begun on the building.
Designed by SHoP Architects, 38 Sixth Avenue (formerly known as B3) is the third building that Greenland Forest City Partners has broken ground on since December 2014 at Pacific Park Brooklyn, including 535 Carlton, a 100-percent affordable apartment building, and 550 Vanderbilt, a market-rate condominium building.
Keep your eye on the ball. The project was originally supposed to be 50/50 affordable/market rentals, then approximately 35% subsidized after 1930 condos were added to the 4500 rentals. 

Every "100% affordable" rental will ultimately be matched by a "100% market" rental. And another "100% market" condo is about to be launched, without the same political fanfare.

As for "a model," a term used in the press release, note that in Mayor Bill de Blasio's ambitious plan to build or preserve 200,000 affordable units, only 11% --not 65%, as in these two "100% affordable" towers--are supposed to go to middle-income households.


From the state, a lie

The press release continues:
“We’re very excited that Greenland Forest City Partners is moving aggressively to fulfill their commitment to a fast-tracked timeline for the delivery of affordable housing,” said ESD [Empire State Development] President, CEO, and Commissioner Howard Zemsky. “They’re on track to complete construction 10 years earlier than originally predicted and when construction commences at 38 Sixth Avenue, they’ll have made good on their commitment to start construction on two 100-percent affordable buildings by June 30. In addition to delivering much-needed affordable housing, 38 Sixth Avenue will also deliver jobs and economic activity.”
(Emphases added in bold throughout)

That's not true. The project, when approved in 2006 and again in 2009, was supposed to take 10 years. Then the Development Agreement gave a 25-year "outside date," or 2035.

A revised schedule agreed to in 2014--part of negotiations with community groups who claimed a rather imperfect victory--set a completion deadline of 2025. That makes for 10 years earlier than the previously extended outside date, but not "10 years earlier than originally predicted."

I asked Empire State Development yesterday if they would issue a correction or clarification. No response.

And by the way, "economic activity" is one of those vague terms, like "affordable housing," that needs to be unpacked with more specifics. After all, gambling and drug dealing deliver economic activity.

From the city, "incredibly proud"

From the press release:
“The people of this city need affordable housing built in real time. And make no mistake: affordable housing at Pacific Park is on the move. We committed last summer to get two new 100-percent affordable buildings in the ground by this June, and today, we are making good on that promise. Our administration is incredibly proud to have negotiated two buildings that each have double the affordable housing and reach more low-income families as the first buildings to rise at this site, all without increasing costs to the public. We are grateful to all our partners in the community, at Greenland Forest City and at the State who have worked to get these shovels in the ground,” said NYC Deputy Mayor for Housing and Economic Development Alicia Glen.
As noted, the building "have double the affordable housing" only because the configuration of the project has shifted. 

And while the buildings reach "more low-income families"--again, only because the subsidized housing is being distributed in fewer buildings--that obscures a deeper problem: the affordable housing is far less affordable than originally promised. 

(Remember, "affordable" merely means "income-linked," with tenants paying 30% of their income.)

As I've written, 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. 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 overall affordable units are supposed to be low-income, but only 30% in this all-affordable 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.

Note YIMBY's statement that "Forest City’s press release says more than a third of the units 'will be sized for families,' hopefully indicating three bedrooms (or larger)." Actually, that simply means two-bedrooms or more.

Who's eligible, what it will cost

Below is my calculation of the rents for each unit. 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.


Based on the new AMI, here are the income maximums for residents in the building.

More elected officials offer praise

It is apparently enough for many elected officials to praise "affordable housing" without looking at the details. (Note that state Senator Velmanette Montgomery, a longtime project opponent, is not quoted.) From the press release:
"It is imperative that we maximize every opportunity to construct affordable housing for Brooklynites that make up the foundation of our communities,” said Brooklyn Borough President Eric Adams. “I thank Greenland Forest City Partners for their commitment to advancing toward affordable housing at Pacific Park." 
Assemblyman Walter Mosley, Assembly District 57, said, “As the state assembly representative of the neighborhoods directly surrounding the Pacific Park Project, it pleases me to see the partnership between Forest City Ratner Companies and Greenland USA is producing the amount of affordable housing promised to the community, especially at such a crucial time where such housing is at a premium. We are facing a housing crisis, the likes of which we have not seen since post-World War II, and it is critical that projects like Pacific Park continue to create and maintain affordable housing in an effort to ensure hard working families can continue to live in this great city and state." 
“The influx of new residential buildings in communities across New York City too often excludes the thousands of families who cannot afford market-rate housing units. The highly-anticipated construction of 38 Sixth Avenue will help alleviate the overwhelming need for affordable housing in Brooklyn while preserving the cultural and economic diversity of its surrounding community,” said Council Member Laurie A. Cumbo.
Cumbo's quote is particularly rich.

Where the financing came from

From the press release:
For construction financing of 38 Sixth Avenue, the New York City Housing Development Corporation is providing an $83 million first mortgage loan for the building through the issuance of tax-exempt government debt obligations funded by Citi Community Capital. Greenland Forest City Partners is also receiving a $10 million subordinate loan from HDC and a $2 million subordinate loan from Citibank.
....“HDC is committed to financing high impact projects that will create the quality affordable housing needed to foster strong, economically diverse neighborhoods,” said HDC President Gary Rodney. “38 Sixth Avenue, the latest addition to the Pacific Park Brooklyn development, leverages an innovative financing structure to achieve affordability that will add to the fabric and diversity of this vital Brooklyn hub. Thanks to a collaborative partnership with Citi Community Capital, Empire State Development, and HPD, HDC was able to provide the financing for this mixed income housing development, delivering on the goals of the Mayor’s housing plan.”
The final validation, from Bertha Lewis

The press release states:
Bertha Lewis, Founder and President of The Black Institute, said, “Pacific Park Brooklyn is turning into an affordable housing engine. When we announced this project nearly 12 years ago, some expressed doubt that the housing would come to fruition. Today, with affordable housing an even greater crisis in New York, Pacific Park buildings are not only becoming a reality, they are becoming a model for how to build housing and communities that reflect the diversity, in every way, of our City. I applaud the joint venture for its commitment to the promise of Pacific Park and their desire to move quickly.”
Actually, some expressed doubt that the affordable housing would be truly affordable, and questioned how much it would serve the constituency of ACORN, the low-income organization Lewis then led. As the statistics show, most of the housing will be out of reach.

No, not a model.

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