Friday, May 13, 2016

Scenes from 461 Dean rollout: Cumbo "celebration," MHANY sheepishness, Mosley caution; NY1 puff; CSS dis

From NYC Housing Connect notice
Applying for affordable housing is a longshot process that requires careful paperwork, and more people are learning this as Forest City Ratner holds information session and speaks to Community Boards regarding the ongoing 60-day lottery for the 461 Dean Street tower, aka B2.

The questions at the first information session, held at BAM Rose Cinemas May 10, and the Community Board 2 meeting, held at Ingersoll Community Center May 11, mostly concerned eligibility issues. (Info sessions continue on May 16 and May 24.)

But the overall discourse about the building has been all over the map, including a cheerleading cameo by Council Member Laurie Cumbo, a caution from Assemblyman Walter Mosley, sheepishness from the housing group managing the rollout, a puff piece from NY1, and criticism from a housing expert, who called the number of low-income units a tiny response to the citywide challenge.

Reticence about affordability

At BAM, there was an undercurrent of understandable reticence about the actual affordability of the apartments, which have a wide range.

Notably, while many reports point to the presence of $559 studios, those five units are far more than the lowest-income two-bedroom units (1), and the largest number of coveted two-bedroom units skew dramatically toward middle-income households able to pay $3,012 for an "affordable" unit.

(This 32-story tower, built via modular construction, is 50% market/50% below-market. It is the only one of the 15 towers--out of 16--to be owned exclusively by original Atlantic Yards developer Forest City Ratner, which sold 70% of the remaining project, since renamed Pacific Park, to the Shanghai-based Greenland Group. The Barclays Center operating company was sold to Russian billionaire Mikhail Prokhorov.)

Not only was the building's relative unaffordability not stressed, in one case, it was evaded, as described further below. That meant the developer faced little pushback, unlike in the July 2006 affordable housing information session that left many attendees dismayed at the relative high rents, such as two-bedroom units for $2,000.

At the BAM meeting, there was no mention of the problems (leaks, mold) that delayed this building, once hailed as an example of "cracking the code" for modular construction.

Cumbo surfs "affordable"

Then again, the rhetorical power of "affordable" is such that 35th District Council Member Cumbo, offered the chance to make an introduction at the info session, told potential applicants--and future constituents--that a decade ago the project faced "challenge and controversy," but implied that it's over.

"I get to step in on the celebration time," Cumbo declared enthusiastically, with no acknowledgment that one of the controversies--raised as recently as 2012 by predecessor Letitia James and the community coalition BrooklynSpeaks--concerned the breadth and affordability of this building.

A sheepish tone

Introducing 461 Dean at Community Board 2, Ismene Speliotis, Executive Director of Mutual Housing Association of New York (MHANY), first described MHANY--a successor to ACORN, which signed the original housing pledge with Forest City.

"We fight for affordable housing"--her tone got a bit sheepish--"often for levels that are lower than what is here on this card" outlining affordability.

Speliotis noted that there were "never enough" affordable units, and that three-bedroom units, absent in this first building, will be available in the next two, 100% affordable buildings. (She didn't mention that 65% of those units will be for middle-income households, a significant shift toward higher rents than the configuration originally pledged to ACORN.)

Speliotis said that affordable housing is too often skewed to both the upper- and lower end of the affordability spectrum, and her group worked to make sure there were multiple "bands," a reflection--and greater use of--the city's existing 50/30/20 program, in which 20% low-income units were complemented by 30% middle- and moderate-income units. (True, but see above parenthetical.)

She also noted that MHANY aimed to work with applicants to make sure that those with "a blip on your credit report" would not be deterred from applying.

A bit of evasion

The slide operator at the BAM session had two slides to illustrate households that could take advantage of the affordable housing. The first slide showed three examples:
  • Mr. and Mrs. Lopez, with $30,056 income, paying $727 in rent
  • Mrs. Anderson, with $30,316 income, paying $718 in rent
  • Mr. Yin, who lives with a sister, with $72,000 income, paying $1,314 in rent
The slide operator then quickly clicked through the next slide, which--as was visible briefly--had two other examples, at higher incomes and monthly rents. (In 2006, they showed five different income "bands," including two examples of monthly rents over $2,000.)

Maybe it wasn't as relevant to the perceived audience. Maybe they were in a hurry. But it was noticeable.

Celebrating progress, with NY1's puff

NY1's Jeanine Ramirez, in the 5/12/16 Tallest Modular Building in the World Tops Out in Brooklyn, presented a notable puff piece, declaring it was "outfitted with everything, even the kitchen sink" and reporting how they got to ride the construction elevator 320 feet up to take in the view."

The relatively brief piece packed in several evasions and untruths.

The process, Ramirez, said, "actually took longer than traditional construction," which led Forest City Ratner's Adam Greene to reply, "Because it's innovation, innovation sometimes takes a little bit longer, but that's OK."


Really? They were supposed to build the entire project via modular construction! They had to pay back the tax-exempt construction loan! They had to buy out their partner in the building! They had to buy out their partner in the modular factory (Skanska) and remain in bitter litigation! The building is a loss! They closed the modular factory! The building had mold and leaks!

"The development got its original name because it's atop the Long Island Rail Road yards that run under Atlantic Avenue," stated Ramirez, misdescribing the 22-acre site, about 8.5 acres of which are railyards.

"But after fending off some 30 lawsuits against the project, the developers rebranded it, for what they're now marketing as a new neighborhood," she stated, unwilling to call the developer on the lie--not 30 lawsuits, maybe 30 legal decisions or, as Bruce Ratner once put it, "litigations"--or to challenge the notion of a 22-acre neighborhood with a tooth cut out and which somehow jumps Flatbush Avenue to one acre.

"The center of the project, Pacific Street... is becoming a park," said Greene, without being challenged on the difference between publicly-accessible open space and a public park. The piece ended by noting that some units will be "available to residents earning as little as $20,000 a year."

Also note the mostly breathless coverage on Curbed.

On Fox5, a more mixed picture

The 5/11/16 Fox5 report, below, was more mixed, including some wide-eyed reporting, citing a building with "breathtaking views of the city" and which is "fully loaded with amenities," but pointing to the wide range of affordable incomes.

"Those apartments aren't meeting the most serious needs of the city, at all," said housing policy analyst Tom Waters of the Community Service Society, noting that there are 1 million low-income households.

The article also quoted Erik Engquist of Crain's as pointing out that a person's odds in a housing lottery is 1000 to 1 (also see the New York Post), though I suspect the odds are even longer for low-income households but surprisingly better for middle-income ones (since many households in the latter cohort don't know they're eligible--hence the advertising).

The Fox 5 reporter described the project as "rebuilding the old Atlantic Yards to Pacific Park Brooklyn," which is a compound error, since the reference apparently referred to the railyard, which is not Atlantic Yards, and didn't point out that Atlantic Yards is a developer's brand name, not a place.

It also said that Greenland Forest City Partners promises "a total of 1800 housing units," which actually refers to the units under construction or abotu to launch. The entire project is supposed to be 6430 units, including 4500 rentals, half below-market.



In the studio, Mosley was asked his take, and replied cautiously. "I think that his project is part of a much larger issue. It's going to solve some of the problems, a very minute portion of the problems."

He noted that Area Median Income (AMI) is an outdated measure, since it lumps New York City in with suburban counties. (Mosley said it includes Suffolk/Nassau/Westchester/Putnam, though actually it's Putnam, Rockland and Westchester, without the two Long Island counties.)

Mosley said the AMI for a four-person household is about $90,000, but if limited to New York City would be "roughly half of that."

Not quite, but in the ballpark: the 2015 AMI for a four-person household was $86,300, while the 2010 NYC median household income was $48,743, which 1) likely has risen and 2) may apply to a smaller household.

Still, his general point is indisputable: AMI distorts affordability, making it look like "affordable" units are serving the needy. Actually, many "affordable" units are serving households in the relatively privileged sector of the population.

Other questions: size, perpetual stabilization

What's the size of the apartments, in square footage?

At the BAM info session, Erica Sims, Deputy Executive Director of MHANY, didn't specify, but said more information would be provided later in the process. That's not super-helpful, given that one-bedroom units, in the market at least, can have a very wide range.

Will the affordable units, which are under rent stabilization and thus face incremental rent increases set by the city's Rent Guidelines Board, ever be destabilized?

Sims said no. That's not quite true. The affordability is guaranteed for 35 years, the term of the tax-exempt bonds, a relative blip in the cycle of the neighborhood. Occupied units will remain in rent stabilization, but vacated ones would leave, city officials told me.

Enthusiasm about the building

At the BAM info session, Forest City Ratner Executive Vice President of Residential Development Susi Yu spoke enthusiastically about the building, as if addressing peers in the real estate industry.

She said the large windows meant the building is "completely light-filled" and said "I'm super exited." She noted that the modular construction allowed for atypical features like a wall-mounted toilet and wall-mounted sink

She said it was "exciting" to be able to fit out closets with shelving and doors.

Questions about the building

At the Community Board 2 meeting, Jim Vogel, an aide to Sen. Velmanette Montgomery who has raised questions--both on behalf of the Senator and himself--about the building, referenced unspecified studies that said modular buildings pose a 60% greater fire risk, and asked about tests done on scale models.

Forest City external affairs executive Ashley Cotton said she didn't know what studies he was talking about, but said the building would be certified by the Department of Buildings like any other.

No one brought up the problems the building faced with leaks and mold.

Other Pacific Park issues

Yu, talking about the full project, said the 535 Carlton tower, 100% affordable, should be occupied by the end of 2016 or the beginning of 2017.

She described 615 Dean as a "100% market-rate condo," though officials at parent Forest City Retail Trust have signaled it might be a rental.

She said 664 Pacific, the 27-story tower just east of Sixth Avenue, would take about three years, which means a 2019 opening for the tower and associated school.

As I wrote in February 2015, a lawyer for Empire State Development wrote that the "school could open for the 2018 school year only if ESD gains control of the site by February 2015." That didn't happen, and--perhaps for other reasons as well--the tower is delayed.

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