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"Impeccable" affordability? Next two subsidized towers skewed to those earning six figures

Also note analysis regarding on the claim of "Brooklyn's newest neighborhood," the delay in the promised Atlantic Yards Community Development Corporation, and the already-launched effort to sell condos to Chinese buyers.

Keep your eye on the ball, people.

The "affordable housing" in the next two Atlantic Yards/Pacific Park towers containing such subsidized units won't be that affordable, as it will be skewed to middle-income households earning six figures.

It was a huge gap in the claimed community victory that got the developer to agree to build the 2,250 units of affordable housing (of 6,430 total units) by 2025 instead of the outside date of 2035.

Also, despite the focus on the first all-affordable tower starting tomorrow and a second one next June, the context--the most likely plan-- is that four market-rate towers will start in the next 18 months or so. 

Unspecific claims of affordability

At tomorrow's groundbreaking for 535 Carlton, Greenland Forest City Partners promises an "impeccable variety of rental apartments affordable to low, moderate and middle-income New Yorkers." 

Daily News columnist Denis Hamill, in a typically sycophantic preview, focusing on Forest City CEO MaryAnne Gilmartin, wrote, "Located at Carlton Ave. and Dean St. in Prospect Heights, Brooklyn, all of the 298 units are destined for low, moderate and middle-income families."

Crain's New York Business reported:

The 298-unit building now underway by Greenland Forest City Partners is known as 535 Carlton Ave. All the units will be designated as affordable. The partnership also plans to immediately begin construction on a 275-unit market-rate condo building at 550 Vanderbilt, and then in June to begin work on 30 Sixth Ave., another 100% affordable building that will contain 300 units.
In total, the two affordable buildings will provide units based on a metric called area median income [AMI], which in New York City was $85,900 for a family of four in 2013.
Of the nearly 600 affordable apartments, about 30 of them will be for families earning up to 40% of AMI, about 150 will be for 60% of AMI, another roughly 30 for families earning 100%, about 90 for families earning 145% and about 300 for families earning up to 165%.
What it means

Let's break that down. If we use the numbers from Crain's, it means that about half the units would go to households earning six figures, especially if we consider that AMI likely will have risen by 20165.

And while such households certainly would appreciate a discount off a market-rate unit, and may have trouble finding quality housing in a prime location at an affordable cost, they were hardly the people rallying for affordable housing.
2014 AMI is actually lower, at $83.900, but AMI when the building opens  surelywill be higher
The differs significantly from the arrangement in the Affordable Housing Memorandum of Understanding Forest City Ratner signed with ACORN in 2005, and which was incorporated into the Community Benefits Agreement, as shown below..

Note that 40% of the affordable units are supposed to be low-income, but only 30% in the next two buildings would be low-income.

Also note that only 20% of the affordable units are supposed to go to the best-off cohort, earning 140%-160% of AMI, but instead 50% would go to the best-off cohort, earning as much as 165% of AMI.


Changing rent levels

There are multiple ways to make adjustments, thus bringing the developer more revenue. The first, as noted above, is to change the configuration, skewing more of the total affordable units toward middle-income households.

The second, as noted above, is to tweak the bands, raising the percentage of income for each of the cohorts, so, for example, the maximum for low-income households is 60% of AMI rather than 50%,

The third is where the rent levels are set. For the new towers, rents will be set at 37% of AMI, 57% of AMI, 80% of AMI, 130% of AMI, and 160% of AMI. Notably, the latter two figures are above the 120% of AMI and 150% of AMI originally promised.

If rents are based on 160% of AMI, and 2013 AMI is $85,900 (as reported in Crain's), that suggests a four-person household in the top cohort would pay $3,436 for a two-bedroom unit, based on 30% of income.

If rents are based on 160% of AMI, and 2014 AMI is $83,900 (as I was told by city officials), that means a four-person household would pay $3,356 for a two-bedroom units

Due to other adjustments in the calculations, the numbers are slightly different.

As I reported in BKLYNR, low-income two-bedroom units in the next Atlantic Yards towers would rent at $647 and $1,025 a month, if available in 2014, and moderate-income ones would cost $1,458. But those income “bands” make up only 35 percent of the total affordable units. Another 15 percent would rent to a middle-income cohort for which two-bedroom apartments would cost $2,405.

And fully half the units would be reserved for another middle-income group, who’d pay $1,967 for a studio, $2,470 for a one-bedroom, $2,972 for a two-bedroom, and $3,430 for a three-bedroom, according to current projections.

And those numbers surely will go up.




Comments

  1. Anonymous5:44 PM

    What should be addressed is that Jonathan Springer is a former Empire State Development Corporation employee.
    http://www.nychdc.com/content/pdf/BoardMaterial/072513/Appointment%20of%20Senior%20Vice%20President-Jonathan%20Springer.pdf

    In what best interest does NYCHDC when they are a arm to HPD?

    ReplyDelete
  2. Anonymous12:42 AM

    This gets more ridiculous. The person who wrote how reduce the cost of affordable housing is giving loans out - http://furmancenter.org/files/publications/NYCHousingCost2005.pdf

    ReplyDelete

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