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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.


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