The market effect on middle-income "affordable" units: rents for 130% AMI households higher at Domino in Williamsburg than Plank Road in Prospect Heights

"Affordable housing" is supposed to be below-market, income-targeted, income-linked (pick your synonym), but one lesson from 2021 is that middle-income "affordable" units--such as at Plank Road (B15, 662 Pacific St.) are being rented at a discount from the allowable rents set by the city's Department of Housing Preservation and Development (HPD).

The rationale, as we were told by Empire State Development--the state authority that oversees/shepherds Atlantic Yards/Pacific Park" is this: "130% of AMI is the allowable rent, and the rents have been set, in coordination with HPD, to reflect current market conditions and the needs in the area."

Stay tuned for similar rents, likely, at Brooklyn Crossing (B4, 18 Sixth Ave.), which has opened to market-rate tenants, though the affordable housing lottery hasn't launched.

A contrast in Williamsburg

But "market conditions" and "needs in the area" are apparently different in Williamsburg, where a new housing lottery also aims for middle-income households but has higher rents.

Let's look at 266 Kent Avenue, part of the Domino project (not in Greenpoint, as erroneously stated in the image, though not the text).

From the description:

266 Kent is Brooklyn’s newest iconic tower redefining the Williamsburg waterfront and sets a new bar for premium affordable housing rentals right on Domino Park. Standing at 45-stories high, the property offers Studio, One Bedroom, and Two Bedrooms homes all equipped with washer/dryers, floor-to-ceiling windows, track lighting and solar/blackout shades. 266 Kent amenities include a fitness center and residential lounge, an outdoor lounge pool/sundeck, playroom, bike storage and shuttle bus to the L, J/M/Z trains and more. Additional fees apply for some amenities. 50% preference for residents of Brooklyn Community Board 1. Rent includes cooking gas and hot water, and the tenant is responsible for electricity including heat. 

Looking at the AMI

There are 33 units aimed at households earning up to 80% of Area Median Income, which is technically low-income by city metrics, though surely an individual earning up to $66,880 does not conform to the common understanding, and $1,550 for a studio, though a relative bargain, is not what struggling people seek.

But let's look at the 33 units aimed at households earning up to 125% of AMI and the 23 units aimed at households earning up to 130% of AMI. The rents are:

• studio: $2,490 for both
• 1-BR: $2,658 for both
• 2-BR: $3,168 for both

(Fun fact: the $2,490 studios were listed on StreetEasy, apparently as an enticement to get people to apply to the lottery.)

Let's compare that to Plank Road, for which the housing lottery has 94 units aimed at households earning up to 130% of AMI. The rents are:

• studio: $1,547 ($2,490 at Domino) 
• 1-BR: $2,273 ($2,658 at Domino)
• 2-BR: $3,219 ($3,168 at Domino)

That means that, while the income caps are the same--for one person, $108,680--the income floors differ significantly. For one person, the floor at 662 Pacific is $53,040, while at 266 Kent, at 130% of AMI it's $85,372--and, bizarrely enough, at 125% of AMI it's $87,875. (That must be a typo.)

As I wrote in November, there's a big gap at Plank Road between the rents for the smaller units and the allowable rents (studios $1,547 vs. potential $2,263; 1-BRs $2,273 vs. potential $2,838), as seen in the chart below, from HPD. Rents for 2-BRs are $3,219 vs. potential $3,397.

Those discounts, as I wrote, are very inconsistent, but apparently reflect the "market."

Also inconsistent is how the Williamsburg building can charge more than what's seemingly allowed for a studio ($2,490 vs potential $2,263). 

Could it be that they're looking at 2022 AMIs? Maybe, but the income limits listed are the ones for 2021, as shown below.