Skip to main content

Former state overseer: not-so-affordable Atlantic Yards/Pacific Park "affordable housing" builds distrust

It's notable how many advocates and elected officials have applauded the not-so-affordable subsidized housing that's part of Atlantic Yards/Pacific Park, calling it, for example, "a model for the shared vision of a New York that works for all."
From the Daily News

By contrast, expert analyst Tom Waters of the Community Service Society said, “Those apartments aren’t meeting the most serious needs of the city, at all.” (And the Daily News, anomalously, produced a tough headline, right, at the groundbreaking of 535 Carlton.)

Waters doesn't have a dog in this fight, unlike organizations associated with ACORN, which signed the Affordable Housing Memorandum of Understanding with original developer Forest City Ratner.

Former state overseer gets harsh

A particularly powerful--and previously unknown--criticism comes from a very unexpected source, Arana Hankin, the former project director for Empire State Development.

(As I describe in more detail separately, in the 2013-14 academic year, she pursued a Loeb Fellowship at the Harvard Graduate School of Design, and reflected critically on the project she previously defended.)

Consider her comments in the video below, a 9/9/13 presentation Hankin made to her new academic colleagues. The "very complicated" methodology behind affordable housing, she observed, "just adds to the community's distrust."



Most people, she said, assume that affordable housing is below the Area Median Income (AMI), she said.  (The term “income-linked" would be more precise, since "affordable" merely means that rents aim at 30% of household income.)

According to the chart, the maximum income, at 160% of AMI,
was $132,800 for a four-person household. Now it's $144,960.
In the first Atlantic Yards residential tower, aka B2 (or 461 Dean Street), 40% of the affordable units go to households with incomes above 100% of AMI, Hankin noted.

Despite a promise of family-sized units, this first tower, flanking the Barclays Center, has no three-bedroom apartments, but many studios. (See my coverage of the compromises.)

"So it just continues to build the distrust, and there's misshapen expectations because of the ways in which the project was essentially sold to the community," Hankin said. As she wrote separately in an article:
Private developers’ use of the CBA [Community Benefits Agreement] and government’s insistence on taking a backseat role has continually marginalized low-income communities and stoked destructive infighting for limited resources. Local leaders who have signed these CBAs no longer are able to publically oppose these projects as a condition of benefit delivery, yet, because the developer has the upper hand during negotiations, these agreements are typically not legally enforceable and many of the benefits are never realized.
Or, those benefits are diminished, as noted below.

More context
It's actually worse than Hankin discussed. First, the New York City AMI--now an astounding $90,600 for a four-person household and $81,600 for three people--is inflated because it includes wealthy suburban counties. That makes a poor fit for Brooklyn, where the Census Bureau reports median income at $46,958 (for households of 2.74 people).

The largest chunk of two-bedroom affordable apartments in that first tower, 461 Dean--built from modular components--will rent for $3,012. In "100% affordable" 535 Carlton, two-bedroom affordable units can cost $3,223.

Those levels well exceed the $2,700 threshold at which vacant rent-regulated apartments can leave rent-stabilization, though these Pacific Park units will be considered "rent-stabilized" since annual increases will be tied to annual Rent Guidelines Board decisions.

Hankin did not mention that, after 2009 renegotiations, ESD gave Forest City 25 years—rather than the long-promised ten years—to build out the project. Since her lecture and paper, renegotiations in 2014, coupled with a threatened lawsuit and a new majority investor (Greenland bought 70% of the project, minus the arena and one tower), produced a new timetable with a 2025 deadline for the affordable units.

Expensive "affordable housing"

Undermining that progress, 65% of 535 Carlton and 38 Sixth, two "fully affordable" buildings, will go to households earning above 100% of AMI.

Half the units are aimed at households earning between 145% and 165% of AMI. That’s drawn no criticism from government agencies or elected officials, though only 20% of the project's subsidized units were supposed to go to that middle-income cohort.

Mayor Bill de Blasio even called one building a model, though such middle-income housing aims at a tiny fraction of New Yorkers and departs from his focus on low-income affordable housing.

I have to think that Hankin, were she liberated again to speak candidly, would agree that it's no model.

Perhaps the discourse in New York could accommodate academics David Madden and Peter Marcuse, who in their new book, In Defense of Housing, write:
When so-called affordable housing programs are producing apartments priced at levels virtually identical to what developers would demand without the affordability requirement, it is clear that the term "affordable" is not so much descriptive as much as ideological.
That's not precisely the case here, as even a $3,000 two-bedroom apartment may be below-market. But such units are far too costly for the vast majority of those desperately seeking--and, in some cases, having cheered for--"affordable housing."

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…