If affordable housing advocates support an extension of the 421-a deadline, with more affordability, what does that signal for the Atlantic Yards/Pacific Park deadline?

I wrote 3/6/23 how, according to the Real Deal, some legislators support extending the construction completion deadline for projects supported by the 421-a tax abatement for four years--from June 15, 2026 to June 15, 2030--but not for all projects, as Gov. Kathy Hochul has proposed.

Rather, they'd offer that carrot only to buildings that contain more than the required minimum under the tax break provisions, which is 30% at 130% of Area Median Income (AMI), middle-income units aimed at those earning six figures.

If so, that could be extended to projects along Atlantic Avenue, just east of the Atlantic Yards/Pacific Park site, that were approved in spot rezonings in recent years, but perhaps not B5, 700 Atlantic Avenue, the first Atlantic Yards/Pacific Park tower over the railyard.

A renewed argument

In a 5/23/23 essay in City Limits, Opinion: 421-a Deadline Threatens the Promise of Gowanus Rezoning, Michelle de la Uz, executive director of Fifth Avenue Committee, and Rachel Fee, executive director of the New York Housing Conference, argue that an extension is necessary to get the nearly 3,000 affordable units approved in the Gowanus rezoning.

They write:

But 421-a came with a 2026 deadline to complete the projects that utilized it. In Gowanus, 2,000 out of the 3,000 affordable units will be created through MIH [Mandatory Inclusionary Housing] and need more time because of delays resulting from challenges like site environmental cleanup requirements, preparation of infrastructure improvements, the need to secure financing in a tight market or lingering staffing and supply-chain issues as we recover from the pandemic.

It’s up to the legislature to extend that deadline until 2030 prior to the end of legislative session in Albany on June 8. To ensure that the 421-a units needing the extension better align with housing need, requiring permanent and deeper affordability of the new units should be included in the extension.

(Emphasis added)

Drilling down

Note that "permanent and deeper affordability" does not necessarily mean more total units, as suggested in March, but, rather, lower rents.

The devil, of course, is in the details. First, the rent limits at 130% of AMI are, as of now, ridiculous: a studio for $3,035 and a 1-BR for $3,253 that developers wouldn't dare ask for that.

Are they going to ask for low-income units at 80% of AMI, which means a studio for $1,868 and a 1-BR for $2,002, or such units at 50% of AMI, which means a studio for $1,167 and a 1-BR for $1,251?

The Atlantic Yards housing deadline

Keep in mind that de la Uz, as a leader in the BrooklynSpeaks coalition, in 2014 negotiated the May 2025 deadline for the project's 2,250 units of affordable housing, with $2,000/month fines for each missing unit. There are 876 (or 877) units left to launch.

She also helped organize a July 2022 press conference aimed to pressure Empire State Development (ESD), the state authority that oversees Atlantic Yards/Pacific Park, to enforce a deadline to build the long-forgotten Urban Room--an atrium attached to the unbuilt flagship office tower--but was really more about ensuring that ESD holds the developer to its housing promises.

At that point, it was plausible that developer Greenland Forest City Partners, dominated by Greenland USA, might start the long-awaited first phase of the platform over the Vanderbilt Yard, unlocking the potential for three new towers. That didn't necessarily mean they'd meet the deadline, but they could make progress.

But the platform didn't start.

This past April, at a meeting of the advisory Atlantic Yards Community Development Corporation (AY CDC), Director Gib Veconi--with de la Uz the key leader of BrooklynSpeaks--asked about the fines: "What’s ESD’s position about collecting those remedies?”

ESD representatives, he noted, had previously claimed that the remedies were non-negotiable, so he asked if that was “still the agency’s perspective?”

“The project documents haven’t changed, so the requirements on the project are still the same,” ESD's Tobi Jaiyesimi stated carefully. “We recognize where we are with the developer’s ongoing discussion with the MTA as it relates to the platform… but at this time there have been no changes to the project documents, so those obligations are still standing.”

That left a lot of wiggle room. Surely the developer doesn't want to pay.

A negotiated extension?

Given de la Uz's stance on the extension of the 421-a deadline, it's not unreasonable to think--though neither she nor BrooklynSpeaks have suggested it--she might have some flexibility toward the Atlantic Yards/Pacific Park housing deadline.

That said, the devil's in the details. Some extension might be justified, given the pandemic and associated impacts, though four years seems a lot.

But such an extension might only be justified if there is both deeper affordability and greater public accountability. (Note that planner Ron Shiffman, a recent AY CDC appointee, has suggested greater involvement of public and nonprofit entities.)

Remember, the developers reneged on the promise, to advocacy group ACORN and in the supposedly legally-binding Community Benefits Agreement, for distribution of 900 low-income units, 450 moderate-income ones, and 900 middle-income ones.

Rather, thanks to loose government oversight, the results have been skewed to middle-income households. 

Morever, rising AMI means that rent levels, even for low-income units, continue to increase, making the impact of delay far more important than previously acknowledged.

 

In other words, as I wrote, a moderate-income (100% of AMI) 2-BR in 2006 might have rented for $1,418, more than a low-income 2-BR (50% of AMI) in 2022, which could rent for $1,501.