Atlantic Yards affordable housing, projections vs. reality. Updated graphic shows middle-income skew and cost of delay, given rising AMI used to calculate rents.
I recently updated a basic chart regarding the promises and reality of the Atlantic Yards "affordable"--better-termed "income-linked" or "income-targeted" housing, which was supposed to be spread among five "bands": two low-income, one moderate-income, and two middle-income.
What's glaring is an oversupply of middle-income apartments: though 1,374 units (61%) of the promised 2,250 total have been built, there have been 718 units in the first middle-income band, or an oversupply of nearly 60%.
Moreover, nearly 75% of the promised middle-income units in the second (and higher) middle-income band have been built, not 60%. Meanwhile, the low- and moderate-income units lag significantly.
The human impact is: dreams dashed for individuals and families, while the goal of a true mixed-income community has not been met. Both of those gained significant political support for the project.
But it's much worse than that, as explained below, because the formula to calculate affordability has enabled ever more expensive apartments.
Moreover, a deadline of May 2025 to deliver the remaining 876 (or 877) affordable units won't be met, and Empire State Development (ESD), the state authority that oversees/shepherds the project, seems distinctly unwilling to enforce it.
While the disproportionate emphasis on middle-income units is glaring, that doesn't fully capture the impact of delay.
Affordable housing is calculated as a percentage of Area Median Income (AMI), which itself is calculated via a complicated formula that involves not only Brooklyn/NYC but also wealthier suburban counties.
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| Excerpt from 2006 flyer |
It promised 50% affordable housing, among the 4,500 rentals--the only housing contemplated at the time. But a clause allowed that to change if the project configuration changed--which it did.
That MOU was incorporated in the "legally binding" Atlantic Yards Community Benefits Agreement (CBA), also signed in 2005, purported to guarantee community commitments.
That has well outpaced income gains in Brooklyn and especially among the struggling people who saw low-income Atlantic Yards apartments as a lifeline.
Today, a four-person household earning $62,800--100% of AMI in 2005--would not qualify, as projected then, for a moderate-income unit, at the top of that "band." Rather, that family would be considered low-income, paying, as of 2022 calculations, up to $1,501 for a one-bedroom and $1,801 for a two-bedroom.
That means that many of the low-income people who marched for the project--assuming only modest gains income--would not qualify for even low-income units at 50% of AMI, even if they were available. And they're not.
The middle-income skew
The four most recent buildings to open, with housing lotteries launching starting in 2021, contain 592 (30% of total) income-targeted units, but only for households at 130% of AMI.
That means, for a four-person household, an astounding income cap, as of 2022, of $173,420, and a two-bedroom that could--but won't--rent for $3,903.
Units at 130% of AMI, especially in less opportune locations, are difficult to fill, according to multiple reports.
No wonder the marketing, as in the screenshot for 595 Dean at right, has tended to emphasize "rent-stabilized luxury," with subsequent annual increases keyed to the Rent Stabilization Board guidelines, rather than "affordable."
We don't know the rents yet for those units, but they could well be set based on 2023 AMI calculations--which have not yet been released.
But note the jump from the 2021 figure of $119,300 to the 2022 figure of $133,400.
Middle-income parity
The rising AMI also means that today, an apartment at 130% of AMI, could go to households earning more than those in 2016 and 2017 seeking units at 165% of AMI.
In other words, while units at the lower of the two middle-income "bands" are more affordable than those at the upper band--at least if competing at the same time--the rising AMI obviates the difference pretty quickly.
As I wrote last November, in 2016, a studio for a middle-income person, at 160% of AMI, would rent for $1,996. The next two buildings had an income cap of 165% of AMI. In 2016, 535 Carlton studios rented for $2,137 and in 2017 38 Sixth studios rented for $2,121.
Then came buildings at 130% of AMI. When the 18 Sixth housing lottery was announced in January 2022, the maximum allowable rent for a studio ( under the lower 2021 AMI guidelines) was $2,263, higher than the income caps in 2016 and 2017.
However, the developers chose to set rents at $1,905. Similarly, at 662 Pacific St. (B15, aka Plank Road), they set maximum rents for a studio at $1,547, apparently aiming for speed of uptake. Rents for the two-tower 595 Dean complex haven't been set yet.
No community preference
Also, the revision of the 421-a tax break eliminated a community preference--half the units for those in the four nearest Community Districts--that applied to the "affordable" units in the first three towers. That also was a selling point: to help keep people in the neighborhood.
That said, those earning more than $150,000--far more than most Brooklynites--are not those at greatest risk of displacement. So the rationale for community preference is weaker.
Moreover, given that it can be tough to fill those units, likely the developers, as well as the affordable housing partner processing the intake--Mutual Housing Association of New York (MHANY), an ACORN successor--prefer a wider range of applicants.
What went wrong?
First, the CBA was not enforced. The developer never hired a promised Independent Compliance Monitor. Only the signatories could enforce it, and never had the political will, or budget, to pursue it.
Second, New York State offered crucial slack, by offering a very general definition of affordability, surely to accommodate the developer's lobbying. That first appeared in the State Funding Agreement, and later in the project's guiding Development Agreement.
Third, city and state policies changed regarding tax breaks and direct subsidies, making it more advantageous, for example, to deliver only middle-income units at 130% of AMI.
Bottom line: promises should be locked in, with commitments and/or penalities.
Meanwhile, no one with any clout blew the whistle.
What next?
Atlantic Yards/Pacific Park is at a crossroads. The developer in May 2022 announced plans to start the first phase of a crucial platform, covering one of the two blocks of the below-grade Vanderbilt Yard. Each block would support three large towers, plus the lion's share of the project's much-ballyhooed open space.
However, Greenland never moved forward, perhaps because of disputes with the Long Island Rail Road, but also--likely--rising interest rates, the failure to renew the 421-a tax breaks, and deep debts of its parent company, Shanghai-based Greenland Holdings Corp., which is largely state-owned.
Meanwhile, Empire State Development has made no indication that it will enforce a 2014 agreement, signed to avert a potential fair-housing lawsuit (on the premise that a delayed buildout would disadvantage Black residents who'd be displaced before they had a chance to enter the housing lottery), that set a May 31, 2025 deadline for the affordable housing.
The penalties: $2,000/month for each missing unit, or potentially $1.8 million a month, all going to an affordable housing trust fund. The developer surely doesn't want to pay, and ESD has hedged regarding enforcement.
It's possible that some sort of renegotiation could revise the project. If public funds are used to build the platform, thus lowering the developer's cost, that could lead to more deeply affordable housing, especially if the public and nonprofit sectors play more of a role.
Or the developer could get an extension, and kick the can down the road.
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