Is the Atlantic Ave. Mixed-Use Plan asking for too much (as per City Journal & the Real Deal)? It doesn't even seek the affordability CM Hudson negotiated last year.

Among local residents speaking at public meetings, there's been significant community dismay toward the proposed draft guidelines for the Atlantic Avenue Mixed-Use Plan (AAMUP).

Why? Because it seems--unless further modified--to be geared to require affordable housing only at 80% of Area Median Income (AMI), rather than 40% or 50% or 60% of AMI, which would serve those more at risk of displacement.

Charts from NYC HPD

In other words, a two-bedroom apartment--at least under current income levels, which will rise--for $1,271 or $1,588 or $1,906 rather than, potentially, $2,542. 

(Actually, developers of units at 80% of AMI are not asking $2,542, since it's unrealistic.)

By contrast, two recent articles by housing supply enthusiasts have questioned the plan for demanding too much affordable housing, which thus would stall developers and block the provision of the city's needed housing, including affordable housing.

One takes aim at 35th District Council Member Crystal Hudson, perceived as a roadblock.

What's unmentioned: the new (potential) baseline

The irony, unrecognized and undiscussed, is that developers pursuing spot rezonings, some negotiated by Hudson, have already agreed to deliver more affordable units--and more deeply affordable ones--than the AAMUP demands. 

With the 421-a tax break assumed to be available, two developers in 2022 agreed to 35% affordable housing, at a blended average of 54% of AMI.

Shouldn't that be a baseline?

In other words, couldn't it be argued that the AAMUP process fell drastically short by not acknowledging the previous track record, not by asking too much?

Perhaps the Council Members know that, based on comments by Hudson and colleage Chi Ossé, as I reported yesterday, since they seek not only more public sites for 100% affordable housing but also much deeper affordability in the rezoning.

In City Journal

Former city planner Eric Kober, writing An Unproductive Housing Consensus for the  free-market oriented Manhattan Institute's City Journal Sept. 15, suggested the plan was likely to fail because it demanded too much:

The most generous [proposed zoning], along Atlantic Avenue, would rezone to a residential floor area ratio (FAR) of 9.0. (The FAR is the amount of total floor space allowed in a building, relative to the area of the lot. A FAR of 9.0 means that on a 10,000-square-foot lot, 90,000 square feet of multistory housing is permitted.) Such buildings could be up to 185 feet in height. On the side streets off Atlantic, permitted FARs and building heights would be lower.

Allowing for ground-floor and second-story nonresidential space, the plan envisions up to 4,000 new housing units being constructed in the area... But is that actually possible?

Given high rents, he suggests the city should simply upzone:

If the city simply allowed apartment buildings, the 4,000 units would likely materialize within a few years. Sadly, however, the city doesn’t intend simply to allow apartment buildings. Instead, the rezoned area would be subject to the Mandatory Inclusionary Housing (MIH) Program, which requires buildings larger than ten units to allocate between 20 percent and 30 percent of units to low-income households (the different percentages of required affordable units are based on the targeted income levels). The city projects that of the 4,000 new units, 1,150 to 1,550 will be “affordable.” 

This is where the whole enterprise takes on an air of unreality. Units mandated at rents affordable to low-income households can’t pay for their own construction. That burden then falls on the remaining market-rate units. Real estate developers still expect a competitive return on their investment; they won’t subsidize the affordable units unless they’re compensated in some way.

(Emphasis added)

From another angle, the "air of unreality" is not acknowledging that  landowners and developers, sone with very low land costs, would gain a huge increase in buildable square feet--in land value--without asking for something in return.

That's why they agreed to obligations in the spot rezonings.

Keep in mind that the whole AAMUP process began when the 421-a tax break had not expired, which it did in June 2022. Surely the assumption was that some tax break would be there to incentivize developers to build below-market housing.

One curious example

Writes Kober:

For a time, the fortuitous melding of high market rents and generous tax benefits in this particular neighborhood made new private, mixed-income MIH housing feasible. For example, a site at 1010 Pacific St., currently under construction, was rezoned to require MIH in 2019 and “grandfathered” under the expiring 421(a) legislation. It would provide 52 of a total 175 units as affordable housing. But in the post–421(a) era, that’s no longer true.

Also fortuitous: a spot rezoning in which the applicant "contemplated" 25% units affordable at 60% of AMI, but instead could deliver 30% of the building at 80% of AMI. That translates to 1-bedroom units listed at $1,681, well below the upper (2022) guideline of $2,002.

What's next

Concludes Kober:

At a minimum, the administration needs to suggest a Plan B that allows housing construction even if the legislature fails to reinstate the 421(a) tax exemption. If that breaks the “consensus,” then it’s telling: perhaps the plan all along was to take the city’s money to build the promised 100 percent affordable housing on two city-owned sites and let the rest of the neighborhood continue to stagnate. That’s not a deal the city should accept.

Presumably this is not the only rezoning where either a 421-a replacement or--even more difficult--a citywide revamp of tax policy is needed. 

Keep in mind that New York State is already offering a 421-a equivalent to developers in Gowanus, and something like that may be under consideration for Atlantic Yards/Pacific Park.

It ain't over. And if 421-a or its equivalent returns, the question shouldn't be whether to include affordable housing, but how much, and at what levels, given the example set by private rezonings.

In The Real Deal

In Zoning wars: City’s developers, future at mercy of politics, the Real Deal's Erik Engquist Oct. 16 wrote:

Seeds of their prosperity or decline will be laid in the next year as rezonings play out along Atlantic Avenue in Brooklyn, around four Metro-North stations in the Bronx, in Manhattan’s Garment Districtand perhaps in western Queens.

Zoning largely dictates what gets built... But what determines zoning? Politics, ideology and ignorance. Mostly politics.

Regarding Atlantic Avenue

Engquist writes:

Take Atlantic Avenue. City planners are optimistic because Council member Hudson initiated the process. Upon taking office, she was confronted with applications from developers seeking spot rezonings to replace underperforming properties with apartments. Hudson realized a proactive, sweeping rezoning made more sense than reacting to proposals one by one.

Yet when the Adams administration released the plan, she immediately distanced herself from it. That doesn’t mean she’s against it. This is part of the political theater essential to New York City rezonings.

Wait a sec. It's not just political theater but a recognition of the complex reality. Engquist doesn't mention what was negotiated in the private rezonings, but writes:

But if she responds by demanding more affordability than the market and the city can subsidize, little housing will be built. East New York is a case study.

OK, but East New York is not Prospect Heights/Crown Heights/Bedford-Stuyvesant. And the city's unwillingness to demand the affordability to which developers have already agreed to in private rezonings means that Hudson has to play catch-up.

Is it unrealistic for her and colleague Chi Ossé to demand that publicly-owned sites be used for 100% affordable housing, that some private buildings contain 50% affordable units, and that the city's Mandatory Inclusionary Housing (MIH) be revised toward deeper affordability?

Maybe. Surely some of that is a negotiating position. But to defend upzoning without asking more from developers is "politics" too.