Skip to main content

ACORN, the disconnect in the crowd, and the absence of facts regarding affordable housing

The housing advocacy group ACORN sure inspires loyalty in its followers, given that dozens showed up last Wednesday, attired in red, to the public hearing held by the Empire State Development Corporation regarding  the Atlantic Yards project.

What ACORN does not do, however, is keep its members informed about details in the Atlantic Yards affordable housing agreement. Nor do those members apparently feel obligated to get their facts straight. Testimony from its members on Wednesday was heartfelt, but often distracting, erroneous, or even pie-in-the-sky.

There was a lot of cheering and chanting of "Build It Now." There weren't a lot of facts. Actually, there's been more faith--and, as I write below, there may be a theory to explain it.

(Photos by Tracy Collins)

One woman testified that "Forest City Ratner was shaken down" because it "paid market rate for housing." Not at all.

ACORN head Bertha Lewis said that all the rental units would be rent-stabilized. Not unimportant, but a distraction from the questions at issue:
--how long would it take for housing to be built?
--is the announced ten-year timetable remotely realistic?
--how much subsidy is needed and is it available?
--could the subsidies be steered to other projects to produce housing faster?

Also unmentioned: what would the rents actually be? The last time Lewis had to face questions about those numbers, more than three years ago, the crowd was quite disappointed. After all, most of the affordable housing--1350 out of 2250 announced units--would be unaffordable to the low-income people who make up the majority of ACORN's membership.

Also unmentioned: ACORN, by virtue of the 2005 Affordable Housing Memorandum of Understanding, is obligated to publicly support the project. Also, ACORN has been bailed out by Forest City Ratner, gaining $500,000 in grants and a $1 million low-interest loan.

Time for a decent apartment

One woman, a Ms. Boyd, testified poignantly, “I’m 72-and-a-half, and it’s time for me to get a decent apartment.”

Surely it is. But it's not realistic to expect that apartment to arrive via the Atlantic Yards project. 

Let's do some math. First, the ESDC acknowledges that the potential for a delayed buildout, in which only one tower gets constructed.

That would mean 200 subsidized units, with 20 of them designated for senior citizens. Given that half the affordable units are designed for people in the three adjacent community boards, that means Ms. Boyd--who's either in one category or another--has a shot at ten of those units.

But wait. If the units are distributed evenly across all the income bands--from 30% of Area Median Income (AMI) to 160% of AMI--only four of those senior citizen units would be low-income. (I'm assuming that Ms. Boyd, like most followers of ACORN, is in the low-income category, with income at 50% of AMI or lower.)

There would be only four apartments--or, perhaps, even fewer, in case some of them are studios designated for people living alone and others one- or two-bedroom units for seniors with family members.

Trusting the contract

Another member, George Finley, testified, "Just like [ACORN leader] Ms. Bertha Lewis got up here and told you that, no matter what you hear in the public, we have the original contract with Forest Ratner and the downtown community of Brooklyn."

There's no contract with the "downtown community" and, of course, the developer is Forest City Ratner. Finley apparently doesn't know that the "original contract" signed in 2005 included three scenarios, and that the first scenario announced was quickly dropped.

As I wrote in July 2006, no longer would 900 of the 2250 affordable apartments be promised to moderate-income people earning 50%-100% of the AMI.

Rather, only 450 units would go to moderate-income people, and 900 would be aimed to the middle-class, earning above the AMI. Thus, some 40% of the units in the affordable allotment would have relatively high rent; a family of four would pay more than than $2000 a month.

Ratner's willingness to deal

ACORN's Pat Boone testified, "I’m very very much afraid that if we do not allow this project to go through, thousands of people will not get affordable housing. Because of all the developments I’ve seen around in this neighborhood, nobody has spoken out against them."

It is an article of faith that Bruce Ratner was extraordinarily magnanimous in agreeing to include affordable housing, given that other developers nearby said no. The reason is that the other developers were able to build as of right, thanks to the rezoning of Downtown Brooklyn, which ACORN did not protest, as the Observer reported.

Other developers have been required to include subsidized housing as part of other rezonings. Atlantic Yards was essentially a privately negotiated rezoning, with a bonus in square footage for affordable housing. Ratner made promises and, in turn, got an organization willing to turn out its followers to cheer for the project, no matter what.

Source of affordable housing

Despite what Boone said, it's not a zero-sum game. If Atlantic Yards is not built, the housing subsidies can be directed to other affordable housing projects. As for the long-term creation of affordable housing, it may depend more on infrastructure improvements--such as the provision of new transportation options that spur building--than direct subsidies.

"We’re not going to stand by and try to have some agency take care of us," Lewis trumpeted. "ACORN will take care of us.”

It's the opposite. "Some agency" will have to supply subsidies to create affordable housing.

Notes toward a theory

Beyond the support for affordable housing in general, and beyond the financial and contractual obligations, is there any way to explain the fervor for this deal?

Exploring the history of subprime loans in her new book Our Lot: How Real Estate Came To Own Us, Brooklyn-based journalist Alyssa Katz writes:
The experience in neighborhoods confirmed what Fannie Mae's market research also was discovering. Borrowers who were new to homebuying, especially if they were members of minority groups, tended to care more about how they were treated by the person selling them a loan than about the financial soundness of the loan itself.

The parallel isn't direct, but instead of "borrowers new to homebuying" substitute "signatories to the Atlantic Yards Community Benefits Agreement (CBA)."

In this case, ACORN and other project supporters have frequently saluted Forest City Ratner's willingness to sit down at the table regarding something new, the CBA.

After that, however, most haven't looked closely or skeptically at a changing deal.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

Not quite the pattern: Greenland selling development sites, not completed condos

Real Estate Weekly, reporting on trends in Chinese investment in New York City, on 11/18/15 quoted Jim Costello, a senior vice president at research firm Real Capital Analytics:
“They’re typically building high-end condos, build it and sell it. Capital return is in a few years. That’s something that is ingrained in the companies that have been coming here because that’s how they’ve grown in the last 35 years. It’s always been a development game for them. So they’re just repeating their business model here,” he said. When I read that last November, I didn't think it necessarily applied to Atlantic Yards/Pacific Park, now 70% owned (outside of the Barclays Center and B2 modular apartment tower), by the Greenland Group, owned significantly by the Shanghai government.
A majority of the buildings will be rentals, some 100% market, some 100% affordable, and several--the last several built--are supposed to be 50% market/50% subsidized. (See tentative timetable below.)

Selling development …

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…

"There is no alternative": DM Glen on de Blasio's affordable housing strategy

As I've written, Mayor Bill de Blasio sure knows how to steer and spin coverage of his affordable housing initiatives.

Indeed, his latest announcement, claiming significant progress, came with a pre-press release op-ed in the New York Daily News and then a friendly photo-op press conference with an understandably grateful--and very lucky--winner of an affordable housing lottery.

To me, though, the most significant quote came from Deputy Mayor Alicia Glen, who, as the Wall Street Journal reported:
said public housing had been “starved” of federal support for years now, leaving the city with fewer ways of creating affordable housing. “Are we relying too heavily on the private sector?” she said. “There is no alternative.” Though Glen was using what she surely sees as a common-sense phrase, it recalls the slogan of a politician with whom I doubt de Blasio identifies: former British Prime Minister Margaret Thatcher, a Conservative who believed in free markets.

It suggests the limits to …