Yes, the Affordable New York (421-a) tax break has fueled much middle-income housing, at 130% of AMI, as with four Atlantic Yards/Pacific Park buildings

There's more discussion over Gov. Kathy Hochul's proposed successor--Affordable Neighborhoods for New Yorkers--to the 421-a tax break, which in 2016 was rebranded Affordable New York, and had delivered a significant amount of middle-income "affordable housing."

In Atlantic Yards/Pacific Park, 662 Pacific St. (B15, aka Plank Road) and 18 Sixth Ave. (B4, aka Brooklyn Crossing) have 30% income-targeted units, all geared to households earning 130% of Area Median Income (AMI), which means mostly six-figure earners. 

The under-construction B12/B13 (615 Dean St./595 Dean St.) are expected to be similar.

Well, some research is in, and while it's not definitive about the right policy, it confirms that--duh--developers disproportionately chose the option of 130% of AMI, because that was most lucrative. 

After all, rents get pretty close to market-rate, albeit below luxury units in those same building, and the developers have, recognizing the market for such income-linked, rent-stabilized apartments, have not even sought the maximum allowable: 

• Studio: Plank Road, $1,547; Brooklyn Crossing, $1,905; allowable, $2,263
• 1-BR: Plank Road, $2,273; Brooklyn Crossing, $2,390; allowable, $2,838
• 2-BR: Plank Road, $3,219; Brooklyn Crossing, $3,344; allowable, $3,397

The Furman Center report

Progressives and Hochul Battle Over Fate of $1.7B Developer Tax Break, Greg David reported 2/1/11 for The City, with a seemingly supportive quote from a research group:

“We need more housing supply, the program that’s providing that supply needs to be updated, and that update needs to equitably serve New Yorkers,” said Matt Murphy, executive director of the NYU Furman Center, which on Wednesday issued a report documenting how important the tax break is to the city.

As it happens, the Furman Center report, The Role of 421-a during a Decade of Market Rate and Affordable Housing Development (also at bottom) is hardly definitive. From the report's Conclusion:

Key questions about the program remain, such as whether its cost is warranted as a tool to incentivize the development of rental housing and whether the affordable housing it produces could be better harnessed to promote economic and racial integration. And if not 421-a, could alternative policies ensure apartments continue to be built in New York City, thereby reducing pressure on the existing market rate rental housing stock over the long run?

Yes, the units were mostly middle-income:

We show that under 421-a, new market rate properties of various sizes have been developed across the boroughs at a large scale, while incorporating mostly “middle-income” income-restricted units, and creating a smaller but not insignificant number of lower income units. We also find that smaller properties (6-29 units) made up 78 percent of the properties built under Affordable New York, with 20 percent of the total units built in such properties.

The middle-income push

I had noticed that, as with Atlantic Yards/Pacific Park, many other buildings at 130% of AMI were showing up. When I queried the de Blasio administration's Department of Housing Preservation and Development in 2020, though, I could never get any statistics.

The Furman Center, though, analyzed the advertisements on the city's Housing Connect portal for buildings using 421-a. Between 2016 and 2018, low-income units at 60% of AMI predominated.

After the law changed, though, middle-income units predominated, though the Affordable New York (ANY) program has variations that allow for lower-income units. The report notes that the revised program did drive new income-restricted units, because some earlier versions of 421-a programs did not require any affordable units.

From the report:

Beginning in 2016, when projects could first opt-in to ANY, the number of units in properties built under a version of 421-a that require income restricted units jumps from less than 3,000 to close to 10,000.

A skew in size

Notably, the smallest units were aimed at poorer people, but low-income families have it tough:

While half of rent-regulated studios advertised on Housing Connect under Affordable New York were targeted to low-, very low-, or extremely low-income households, only a quarter of advertised two-bedroom units were affordable for those households.

 
Among units advertised for Affordable New York, we found 720 studios, 1,849 one-bedrooms, 1,221 two-bedrooms, and 110 three-bedrooms. The number of bedrooms in a unit can determine which type of household is eligible for a new income-restricted unit. Many policymakers prize larger units because they are able to accommodate families with children. However, only five percent of advertised three-bedroom units were afford-able to very or extremely low-income households.

 
This is likely driven by the law authorizing 421- a, which requires that properties mirror the unit mix of market rate units in their affordable units, or that half of the affordable units be at least two-bedrooms, and that no more than half of remaining units be smaller than a one-bedroom.

So if the building as a whole is oriented to smaller units--which makes sense for market-rate renters, since larger families of means might want to buy elsewhere, rather than stay--that means affordable units are smaller, as well. 

Remember that 50% of the Atlantic Yards affordable units, in floor area, were supposed to be family-sized, meaning two or three bedrooms. The first building, 461 Dean St., didn't come close, while the two "100% affordable" buildings, 535 Carlton Ave. and 38 Sixth Ave., did meet that standard.

But neither Plank Road nor Brooklyn Crossing contain affordable three-bedroom units.