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The departing "middle-class" and AY affordable housing

New York City Comptroller William Thompson on Sept. 12 issued a report on New York's 2005 outmigration patterns involving various income groups, and it was quickly used by columnist Errol Louis to argue for projects like Atlantic Yards that would include subsidized housing for the middle-class.

Not so fast. It turns out that moderate-income residents departing the city would not be helped much by Atlantic Yards, given that those in their (approximate) income bracket would be eligible for only 450 of the 2250 affordable units. In fact, when the affordable housing deal was first announced, 900 units were aimed at this demographic; developer Forest City Ratner instead shifted more of the affordable units to higher income brackets.

Thompson's press release, headlined THOMPSON: MODERATE-INCOME HOUSEHOLDS MOST LIKELY TO LEAVE NYC, made some somewhat subtle points:
Moderate-income ($40,000 to $59,999 annual income) and higher-income households ($140,000 to $249,999 annual income) were most likely to leave the city, while middle-income ($60,000 to $139,999) and wealthy households ($250,000 and above) were least likely to leave.

The full report explained that the moderate-income families tended to move to other parts of the country, seeking "higher real incomes through better job opportunities or lower living costs. The higher-income movers tended to move to the suburbs, valuing housing, school, or tax differentials.

Middle-income blues

In a column September 16 headlined Call an ambulance - our middle class is bleeding, Daily News columnist Louis wrote:
The numbers are in, and the data show what some of us have been saying for a while now: that New York's forgotten, quietly suffering middle-class families need all the help and attention this city's leaders and institutions can muster. And they need it fast.
...Middle-class families - notably, households with annual incomes between $40,000 and $60,000, and households earning more than $140,000 - make up a disproportionate segment of the army heading for the exits.

Note that Thompson's report used more careful terms than the catch-all "middle-class." Still, the comptroller apparently used that term while speaking to Louis, who wrote:
"The numbers don't lie," Thompson told me. "The middle class is the group that's leaving. They are not displacing poor people."

That means we have to end the zero-sum politics that pits the needs of the poor against those of the middle class. Look at any of the big development projects around the city that include affordable housing - Atlantic Yards, Queens West, conversion of the Domino sugar factory on the Brooklyn waterfront - and there's a fight about whether subsidizing middle-class families amounts to a wasteful "giveaway" of resources best reserved for the very poor.

The New York Observer in an article headlined Census Shows Middle Class in Flight From New York, noted:

Little wonder the solidly middle class are fleeing the city. Rather than sink over one-third of its monthly income into housing costs—whether through mortgages or rents—a household making between $40,000 and $60,000 a year generally exits the city, leaving the very wealthy and the working class behind to further stratify the Big Apple.

Actually, it would be more accurate to call those departing the lower end of the middle-class, since a lot of the middle-class are staying--we wouldn't call a household earning $70,000 "very wealthy."

Middle-class vs. moderate-income

When the Atlantic Yards 50/50 affordable housing program was announced by developer Forest City Ratner and ACORN, it applied to the entire project, which at that point was all rental units. (Condos were later added; they now count 1930, of which 200 would be subsidized, though likely not affordable to moderate-income families most outmigrating.)

The affordable housing configuration was presented in three potential scenarios. In each scenario, 900 units would be available to low-income households, with incomes 30-50% of Area Median Income, or AMI. (AMI, which includes suburban counties, was once $62,800 for a family of four; now it's $70,900. City and borough household income is significantly lower.)

The large amount of wiggle room involved the other 1350 units. In one configuration, there would be 900 units available to households with incomes of 51-100% of AMI--a rough equivalent to the moderate-income cohort that's leaving disproportionately. The final 450 units would be available to households with incomes of 101-160% of AMI.

See graphic below, from April 2006 version of (Click to enlarge)
The switch

When it came time for the affordable housing information session on 7/11/06, however, Forest City Ratner had replaced the first scenario with the third scenario--which alarmed numerous attendees, who saw much of the housing as unaffordable to them. Moreover, the AMI in the past year had risen, thus increasing rents all around.Thus the current scenario does not provide as much opportunity to the "bleeding" middle class. Rather, there would be 450 units available to households with incomes of 60-100% of AMI, 450 units available to households with incomes of 101-140% of AMI, and another 450 units available to households with incomes of 141-160% of AMI.

In other words, 900 units, or 40%, would go to the middle-income households who are least likely to leave, according to Thompson's report.

That's not to say that they don't face pressures, given that the housing market continues to tighten, two years after the statistics for Thompson's report was compiled. So Louis has a point. And there's a legitimate debate about whether Atlantic Yards, or anything in its place, should have more low-income housing--regional AMI is much higher than Brooklyn household income, and BrooklynSpeaks, for example, points out that 60% of the units would not be affordable to average Brooklyn households.

But it is clear that a project like Atlantic Yards, to do the most good, should better target those moderate-income households that are leaving disproportionately.

That raises some questions. If affordable housing is a legitimate goal, why is developer Forest City Ratner allowed to call the shots regarding the configuration of income brackets? And why hasn't ACORN raised its voice?

Looking at Queens West

As for Queens West, also cited by Louis, a city press release last October stated:
Up to 5,000 units of housing primarily designed to be affordable to families earning from $60,000 to $145,000 for a family of four is expected to be developed on the site.

Again, they may need help in the city's housing market. But Thompson's report makes the case for prioritizing moderate-income families who earn $40,000 to $60,000. So the critics of Queens West, who argue for both low-income and moderate-income housing, have a point.


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