FAQ on new Atlantic Yards housing deal: how 65% of units in two all-affordable towers would go to $100K+ cohort promised only 20%+ of subsidized housing

The devil is always in the details (and this will be updated, as more details emerge).

And the agreement announced Friday to expedite affordable housing for Atlantic Yards and also set up a new subsidiary regarding the project deserves a close and careful look, especially given some misleading and uninformed press coverage.

Will the two new Atlantic Yards towers, filled with 100% subsidized units, go to the neediest?

Final Supplemental Environmental Impact Statement

Well, they will provide 180 units to households defined as low-income under federal regional guidelines. Those low-income households would be above the median income for Brooklyn as a whole, though not the median income for the areas closest to the project. So those units will help some people in the Prospect Heights area remain. That's enough of a justification for some who negotiated the overall agreement, as noted below.

However, in the new towers, 390 of 600 units, or 65%, would go to households earning more than $100,000, likely paying over $3000 in rent for a two-bedroom unit (and proportionally less for smaller units). That's divided up into 50% to the highest income cohort and 15% to the second-highest income cohort.

The highest-income cohort is only supposed to get 20% of the affordable housing. Ditto for the second highest-income cohort, for which, in these two towers, the income eligibility is stretched (to 145% of Area Median Income) to a level that was originally supposed to be in the highest-income cohort.

That 65% figure is nearly double the current (2011) percentage of households earning $100,000, 34.5%, in the 3/4-mile study area around the project site, according to the Final Supplemental Environmental Impact Statement (SEIS(.

In the graphic above right, ironically enough, $100,000+ is specifically designed "market rate."

So, given the shift to the more expensive subsidized units, will these towers accelerate gentrification or stem it?

However much the towers include all-subsidized units, the 65% figure would continue the shift toward higher-income residents. (Without Atlantic Yards, the percentage of $100,000+ households would go up to 40.7%. With Atlantic Yards, if built over 25 years, the percentage would rise to 42.9%. I'm not sure what it would be if Atlantic Yards is built over 11 years.)

If the all-affordable towers confirmed to the promised Atlantic Yards configuration--40% low-income, rather than 30% as in these towers, plus more moderate-income and lower middle-income units--the shift would be moderated.

At least 72% of the Atlantic Yards units--the 2250 market-rate rentals, the 1930 condos, and the 450 rentals in the highest affordable income "band" (plus some percentage of the next "band")-- would go to households earning over $100,000.

So Atlantic Yards, however much it adds density/capacity to accommodate more low-income households, will continue a trend to include more wealthier residents.

Given that only 65% of the units in the two all-affordable buildings will be for households earning six figures, that's a mild improvement compared with the overall project configuration--but not the overall configuration of the affordable housing.

But the configuration in the first two towers is not much different from the first tower, already under construction, which has 50% market-rate units and then 50% affordable units spread evenly over five "bands."

Also, along with the two all-affordable buildings, Forest City will construct two luxury towers. So that will skew things further.

If the all-affordable towers confirmed to the promised configuration, with a greater percentage of lower-income units, moderate-income units, and less costly middle-income units, they'd make more of a difference.

How can this be?

Because the city and state can count "affordable units" without looking carefully at the income "bands" being served.

What's promised in the settlement?

Completion of all 2,250 affordable apartments by May 2025 (with penalties for non-performance). Start of construction of at least 590 (but reported at 600) affordable apartments within 12 months, with penalties for non-performance. Creation of an Empire State Development subsidiary, including locally-appointed directors, to monitor compliance with all project commitments.

How significant is that May 2025 deadline?

It is, and it isn't. Forest City Ratner, after long promising that the project would be completed in a decade, at the end of 2009 got the state to agree to set 2035 as an "outside date" before it could lose the project. There were specific timetables for only four towers and the arena.

So will the project be built "ten years early" or "ten years ahead of schedule," as some news coverage suggests?

No. It would be built ten years ahead of the current final deadline, but six years after the long-promised timetable, after the project was re-approved in 2009. But even Forest City says that it always intended to build Atlantic Yards faster than 25 years (after saying that ten years was never supposed to be the timetable).

Is there a meaningful penalty to enforce the timetable?

For each of the 2250 units not built by 2025, Forest City and its joint venture partner, the Chinese government-owned Greenland Group, would have to pay $2000 a month.

That's a lot. Is there a loophole?

Of course. The Development Agreement allows the developer to invoke an "Affordable housing subsidy unavailability" to excuse delays.

So wouldn't the deadline instead put pressure on the city (and state) to allocate direct and indirect housing subsidies?

Exactly. So Atlantic Yards may get priority over other projects. It's always been questionable whether there would be enough subsidies for Atlantic Yards without impinging on subsidies for other projects.

Is the $5 million penalty for delay in the next two buildings meaningful?

Not really. There are already $5 million penalties in the Development Agreement for delay on the next two towers around the arena. This new agreement shifts the $5 million obligation to different buildings.

While proponents said it accelerates project milestones for the second and third residential buildings, it actually moves up the deadline for only the third building, by 18 months. But Forest City and Greenland were already planning to build that tower faster.

What does that change in the penalty obscure?

Forest City is actually building more slowly on the arena block. Rather than start a second arena block tower by December and a third two years later, it must start its second arena block tower by next June.

That allows cranes at the site of B3 to be used for the arena's green roof in the meantime, as indicated in the graphic above.

[Updated] Does this agreement help those already displaced from the neighborhoods around the Atlantic Yards project get a shot at the community preference?

Yes, a letter from New York City, unmentioned in the press released, indicates expresses the intention of the City of New York to consider former residents of districts 2, 3, 6 and 8 who have been displaced since the time of Atlantic Yards’ 2006 approval as eligible to participate with preference in lotteries for its affordable housing.

Didn't Greenland say they wanted to finish Atlantic Yards in eight years?

They did. Now they will aim to do it in 11 years.

What's the danger of moving fast?

Well, given past history of construction violations, neighbors worry about opportunities to cut corners. Greenland is notably aggressive. “In China we may step on somebody else’s feet, but so what?" Greenland's Ifei Chang has said, in another context. "Sometimes somebody else will step on mine. It’s all good. I won’t sue them.”

Mayor de Blasio was asked Friday, "Can you speak about the city's role in the Atlantic Yards affordable housing deal, speeding up that timeline, and how that project now fits into your affordable housing game plan?"

"Well, it's an important part of it," he responded. "Our Deputy Mayor, Alicia Glen, is famously an aggressive negotiator. I gave her the instruction to go and ensure that the long-awaited affordable housing at Atlantic Yards would happen as soon as possible. Now I'm someone who supported that project from the beginning, and believed it could be pivotal to ensuring economic diversity in that area in Brooklyn, the area I come from. But the pace of that affordable housing has just plain been too slow, and we were not going to see that pattern continue. By the way, the state of New York felt the same way. So I feel very good about where we stand now, that affordable housing is going to start right away, that two buildings, fully affordable, will be built in the next few years, and then there's an aggressive plan thereafter. And it will certainly contribute greatly to our overall affordable housing effort."

Will this "contribute greatly to our overall affordable housing effort"?

Well, it allows de Blasio to add to the totals he wants to compile. How much will help the neighborhoods around it is another question. The mayor's stated plan is to deliver only 11% of affordable units--not 65%--to middle-income households.

Is the city getting a bargain on these two towers?

They say so, but it's far more complicated. Glen told the Times that the city will provide a cash subsidy of $11.75 million for each building with 300 units of affordable housing, a major improvement on the Bloomberg administration's investment of $11.6 million for 182 affordable units in the first tower. (That's apparently a New York City Housing Development Corporation second mortgage.)

But that doesn't address the amount of tax-exempt bonds allocated or, crucially, the difference in affordability between the first tower and the next two.

What do you mean?

As reported by Crain's, of the 600 units in the next two towers, 5% will be for families earning up to 40% of AMI Area Median Income), 25% for those earning 60% of AMI, 5% for those earning 100% of AMI, 15% for those earning 145% of AMI, and 50% for those earning up to 165% of AMI. (The lower range has not been reported yet.)

That distribution differs from the configuration in the Housing Memorandum of Understanding that Forest City signed in 2005 with ACORN, which divides the units into five bands: two low-income bands, 30-40% and 40-50% of AMI; one moderate-income band of 60-100% of AMI; and two middle-income bands, 100-140% and 140-160% of AMI.

Each band represents 450 units. While the top band should represent 20% of the affordable units, for the next two towers, it will represent at least 50%. Similarly, while the two low-income bands should represent 40% of the affordable units, in the next two towers they will represent 30% of the affordable units.

Is that kosher?

Despite the Housing MOU, such changes are not barred by the the Development Agreement Forest City signed with the state, which allows more flexibility, as long as affordable housing units fit within the range of current city/state programs. In other words, it's OK to go up to 60% of AMI (even 80%) for low-income groups and 165% (even 175%) for middle-income groups. On the Upper West Side, it can even go up to 230%.

Isn't the AMI skewed, because the federal government also uses wealthy suburban counties? 

Very much so. The Brooklyn median income, in 2011, was $46,126. The 2013 regional AMI is $85,900. That said, the 2011 median income in the study area was $77,363, a rise of 12.4% in 12 years.  

Didn't Forest City meet that MOU configuration in the first tower, B2?

Yes, in terms of income distribution. However, Forest City promised that 50% of the affordable units, in floor area, would go to two- and three-bedroom units. The first tower falls far short, with no three-bedroom units and some 20% two-bedroom units.

Will the next two towers have more two- and three-bedroom units?

That's likely, according to public statements. But the numbers haven't surfaced yet.

How does the first tower, B2, look in terms of income eligibility?

Income eligibility for the next two Atlantic Yards towers, based on 2013 AMI

Calculations by Atlantic Yards Report

To what extent do these two new towers address the affordable housing crisis targeted by BrooklynSpeaks and the Fifth Avenue Committee, in their challenge to Atlantic Yards?

Only in part.

To what extent do these two new towers address the affordable housing crisis targeted by ACORN when it signed the housing deal in 2005?

“The affordable units will be made available to all Brooklyn residents, some of whom may even have been displaced by the market forces that led to the gentrification of this very neighborhood over the past 20 years,” ACORN Executive Director Bertha Lewis said at the time. “It transforms a community that has been out of reach for all but the wealthiest New Yorkers." 

It's safe to say the transformation is far more attenuated. That said, Lewis has blamed project opponents for delays that kept the housing from being built sooner. (I'd say there are multiple sources of delays, including the recession and Forest City's unrealistic plans, along with legal challenges.)

Was the public misled regarding the new agreement?

I think so. The original press coverage, and press releases emphasized the new timetable and the all-affordable buildings without explaining who'd be eligible to live in them.

Would you have been more critical of the agreement in your interview Friday on WNYC had you know the configuration of affordability?

Yes.

Did BrooklynSpeaks and the Fifth Avenue Committee, as well as the elected officials and other community groups endorsing the agreement, know of/endorse (and/or push back on) the income configuration in the next two all-affordable towers?

Update: Gib Veconi of BrooklynSpeaks, in a Twitter exchange, acknowledged they did not know the income details of the units in the all-affordable towers announced last Friday:
Gib Veconi ‏@GibVeconi 2h
Good job @AYReport explaining role of potential @BklynSpeaks suit 2 accelerate #affordableHousing at #AtlanticYards http://wnyc.org/2CefY
Norman Oder ‏@AYReport 2h
@GibVeconi Agree it played significant role. But still question how much leverage @BklynSpeaks had/used, given housing details that surfaced
Gib Veconi ‏@GibVeconi 1h
@AYReport #FairHousing claims r based on race, not income. Affordability bands in NYC subsidy policy not in potential lawsuit scope.
Norman Oder ‏@AYReport 1h
@GibVeconi Thks4 for clarification, but did u/FAC know of/agree 2 income configuration in 2 all-affordable buildings? Big departure from MOU
Gib Veconi‏@GibVeconi
@AYReport Was not privy to those details, but AYCDC [Atlantic Yards Community Development Corporation]should oversee fulfilling affordability commitments on total 2,250 units going forward.
Norman Oder ‏@AYReport 52m
@GibVeconi OK. AYCDC role is progress. But how do 390/600 $100K+ affordable units address gentrification issues you've eloquently raised?
@AYReport 180 units 4 <= 60% AMI = big acceleration. Yes need more, but getting these now matters 4 ppl facing displacement pressure.
Norman Oder ‏@AYReport 33m
@GibVeconi I hear u, but isn't there big tradeoff if rest of affordable units skew upward? BkSpeaks pr emphasized total aff. housing package
Norman Oder ‏@AYReport 28m
@GibVeconi Also note: low-income units = 40% of total affordable in #AtlanticYards, but only 30% in next two towers. Another tradeoff.
Gib Veconi ‏@GibVeconi 24m
@AYReport same tradeoff if not mistaken. See previous reply re AYCDC.

In other words, Veconi thinks that the acceleration of low income units--there were 73 in the first tower, and now there will be 90 in each of the next two towers--is worth the deal. It's certainly valuable, but as I pointed out, BrooklynSpeaks in its press release emphasized the entire affordable housing package, not just the low-income units.

Update: Michael Cairl of the Park Slope Civic Council responded to my query:

When the PSCC discussed this we were informed in general terms about the AMI distribution but not to this level of detail. But it did not affect the vote to endorse the settlement; what the PSCC Board as a whole was interested in, and the basis of the vote, were the expedited delivery of 600 affordable housing units with robust performance guarantees, and the fact that for the first time the community will have a voice in the governance of at least the affordable housing component of the project.

The first three Atlantic Yards towers would include 336 units (36 in the first tower, plus 300 in the next two) for the highest-income subsidized units. The Housing MOU promises 450 units total in this band. Does that mean only 114 more such units will be built?

I don't know, but it merits watching. The pattern so far points to far more units in this highest affordable-income band.

What brought the settlement around?

Well, the mayor and the governor each took credit. Clearly the lawsuit that threatened to scuttle the Greenland deal was a significant factor--though, given that the affordable configuration in the next two towers skews toward the better off, the community groups that negotiated the settlement had less leverage than I thought.

You wrote that the changes were pushed by groups that sought more project transparency, but the agreement was negotiated in secret and the outline--not the specific terms--were public as a fait accompli, less than a day before ratification by the board of Empire State Development. 

Now that we knew the specific terms, the lack of transparency is even more troubling. Public Advocate Letitia James, who told a TV interviewer, "To negotiate this deal behind my back is totally unacceptable," sounded both political and prescient.

(Yes, she's a longtime opponent of Atlantic Yards. But she's also a supporter of affordable housing and was front and center when de Blasio announced his affordable housing plan in Brooklyn.)

Did the groups negotiating the settlement value affordable housing and accountability the same?

They say so, but the devil's in the details, and there are more details about the affordable housing. That's one reason the Dean Street Block Association registered its exceptions and left the Prospect Heights Neighborhood Development Council (PHNDC), which signed the settlement. The Dean Street group had been in the larger PHNDC for a decade.

We don't know the budget for the subsidiary, for example. It's not clear why it should take six months to establish. But it should add accountability, especially compared to the current bi-monthly Atlantic Yards Quality of Life Committee.

How does the governance structure differ from that once sought?

Well, for several years the plan has been for an entity controlled by the governor, as the new Atlantic Yards Community Development Corporation would be.

Of the 14 directors, responsible for monitoring the delivery of public commitments related to the Project by making policy recommendations to the ESD Directors:

o Nine (9) board members, including the Chair, will be appointed by the New York Governor (Governor must appoint Chair per statute). Of these nine (9), no more than five (5) may be City or State employees;
o The additional five (5) board members will be appointed by New York City Mayor and local elected officials:
o 1 appointed by the Mayor of the City of New York
o 1 appointed by the Brooklyn Borough President
o 1 appointed by the Speaker of the New York State Assembly 
o 1 appointed by the President Pro Tem of the New York State Senate
o 1 appointed by the Speaker of the New York City Council

But when proposed in 2007, the project oversight entity, as shown in the slide at right, was to have 50% of the board appointed by the city and local elected officials.

Gib Veconi notes (as Michelle de la Uz also pointed out to me), "No NYS government agency or subsidiary is controlled by any elected official other than the Governor."

From the original ask in 2007 (which Veconi says in 2008 moved from theory to practice, acknowledging control by governor) :

The sponsors of BrooklynSpeaks.net believe that two new structures should be created in order to meaningfully involve stakeholders from the local community prospectively, coordinate effectively between the City and the State agencies, and generally improve the quality and accountability of project decision-making.
• A Project Planning and Oversight Entity should be created. This could be established as an ESDC subsidiary, comparable to Brooklyn Bridge Park Development Corporation or Queens West, both of which were created specifically to involve local representation in the decision-making for those projects. The Project Planning and Oversight Entity would include as part of its board representatives from the ESDC, City agencies responsible for planning and provision of infrastructure, as well as local elected officials. This Planning and Oversight Entity would be responsible for reviewing and approving all changes to the project and policy surrounding it. The entity would also ensure mitigations were being implemented according to agreed-upon standards, and that the actual delivery of public benefits under the project was consistent with the stated goals of the project.
• A Stakeholder Council should be chartered by ESDC to provide a forum for community dialog and input into the project on a continuing basis. This Council could establish working committees to address particular categories of project issues (e.g., transportation, public services, open space, urban design, workforce development, etc.). The representatives of the Council would include members of local Community Boards and leaders of community organizations and civic groups, including the signatories of the CBA. The Stakeholder Council would serve in an advisory capacity to the Project Planning and Oversight Entity.
The establishment of representative decision-making and community advisory bodies would help make the Atlantic Yards project a genuine public/private partnership. However, their simple establishment alone will not resolve the flaws in the project, including its overwhelming density and height of its buildings; its lack of a transportation plan; and its failure to address the housing needs of thousands of local families whose incomes would not qualify them for housing in the new project. These flaws are the direct result of Atlantic Yards having been conceived and planned without adequate public participation, and can only begin to be addressed as Atlantic Yards moves forward if public is meaningfully engaged in the decision-making for the project.