The way Mayor Bill de Blasio put it on June 27, it sounded like alchemy. There was a new plan — hammered out with the administration of Gov. Andrew Cuomo and the blessing of some Brooklyn activists who’d threatened to sue — to speed up the long-delayed affordable housing promised at the Atlantic Yards site in Brooklyn.
The news emerged as a New York Times exclusive, under the sunny headline “Plan Expedited for Affordable Housing Near Barclays Center in Brooklyn.” The print article, leading the New York section, inaccurately said the 2,250 units would be “10 Years Early.”
“We are determined to jump-start affordable housing at Atlantic Yards,” de Blasio declared. “The agreement means two 100 percent affordable buildings will go in the ground starting next year, with units serving a more diverse range of families. And what’s remarkable is that we’ve secured nearly twice as many affordable units [compared with the first, under-construction, Atlantic Yards tower] for our city investment.”
Other elected officials chorused praise. After all, as with puppies and “working families,” it’s tough to oppose “affordable housing.” Still, with a project like Atlantic Yards — controversial since it was announced in December 2003 for its scale, ambition, and expected government assistance — the devil is always in the details.
De Blasio’s cheerful words obscured details that, if not quite a devil’s bargain, surely would have tempered the triumph.
Some details, such as two-bedroom affordable units costing nearly $3,000 (if they opened this year) and income limits (for four-person households) more than $138,000, emerged soon after the announcement, though they were absent from both the Times scoop and the official press releases.
Indeed, 300 of the 600 affordable units would go to households of various sizes in the higher of two middle-income cohorts. That departs from previous promises to distribute the subsidized units more evenly across five income “bands” and tilts eligibility away from average Brooklyn households.
Affordable income bands in Atlantic Yards residential towers
The promise in the 2005 agreement
What’s planned for the next two towers
Other details, like the machinations that allow de Blasio to claim a bargain, are explained here for the first time.
The city’s not getting twice as much of the same affordable housing. Rather, those 300 middle-income units will have rents so high, approaching market rate, they don’t qualify for subsidies (though they’ll still get low-interest, tax-exempt financing).
The city could make that middle-income housing more affordable, bringing two-bedroom units to about $2,400 a month and meeting New York City Housing Development Corporation guidelines. But it would have to commit nearly twice as much in subsidies, and the mayor would have to retract his “remarkable” claim.
Today, Atlantic Yards, once promised to stem gentrification, still looks to be surfing the gentrification wave, just not as glaringly as when the construction deadline was extended to 2035.
That’s a consequence of delay, demographic change, and a mismatch in the way affordability is calculated. But it’s also because of specific decisions obscured in the statements of triumph.
The project — ultimately including 2,250 subsidized units and 4,180 market-rate ones, in 16 towers — was long promised to take ten years, when announced in 2003 and first approved in 2006, by the Empire State Development Corporation, the state agency overseeing and shepherding the project. However, developer Forest City Ratner was given until 2035 once Atlantic Yards was re-approved by the state in 2009. If built, as now promised, by 2025, it will have taken sixteen years.
A new investor, the Chinese government–owned Greenland Group, last year agreed to buy 70 percent of the project going forward (minus the arena and first tower), and consummated the deal just after the new accord, with plans for two all-affordable towers and a 2025 completion date, was signed.
This month, the new Greenland Forest City Partners — apparently aiming to slough off the project’s troubled history — announced that, along with the new timetable and renderings of the next tower, Atlantic Yards would be rebranded Pacific Park. That changes the emphasis to the unbuilt “open space,” which won’t actually be a city park. (Most people still use the old term, and since Atlantic Yards was the project’s name during most of the episodes described in this article, we’ll use it too.)
That timetable may not be a huge sacrifice for the developers, thanks to a blazing hot real estate market, Greenland’s deep pockets, a surprising source of cheap capital, and subsidized apartments reaping higher rents than previously predicted. In other words, “affordable housing” might be as much a selling point to investors as it was to elected officials and the public.
Atlantic Yards reminds us how the enticing term “affordable housing” proves elusive in practice. Though often considered a synonym for “low-income” housing, “affordable” merely means that a household typically pays no more than 30 percent of its income in rent.
Under certain subsidy programs, moderate- and middle-income households qualify for affordable units too. WNYC radio host Brian Lehrer recently quoted a housing advocate as proposing a more precise phrase: “income-linked housing.”
Compounding the challenge, the concept of “low-income” is out of sync with Brooklyn, since housing agencies calculate eligibility based not on city or borough statistics but rather area median income, which includes wealthier suburbs.
Thus, the 2014 AMI of $83,900 for a four-person household diverges from the $45,215 Brooklyn median income, according to the Census Bureau, though the latter is based on a household with 2.71 people. (The median household income in the three-quarter-mile area around the project site was, as of 2011, $77,363, after a 15.7 percent jump since 1999. But the people rallying for Atlantic Yards affordable housing, in the main, came from elsewhere in Brooklyn.)
Low-income two-bedroom units in the next Atlantic Yards towers would rent at $647 and $1,025 a month, if available in 2014, and moderate-income ones would cost $1,458. But those income “bands” make up only 35 percent of the total affordable units. Another 15 percent would rent to a middle-income cohort for which two-bedroom apartments would cost $2,405. And fully half the units would be reserved for another middle-income group, who’d pay $1,967 for a studio, $2,470 for a one-bedroom, $2,972 for a two-bedroom, and $3,430 for a three-bedroom, according to current projections.
Thus, many subsidized Atlantic Yards apartments — especially at the next two towers — will be out of reach to many who rallied for the project at public hearings, under the banner of New York ACORN. (The organization was part of the national Association of Community Organizations for Reform Now, which is defunct, but has been succeeded by New York Communities for Change.)
Some backers assumed “affordable” meant “low-income.” “I am the Tenant Association President of Parkview Apartments in Flatbush,” one ACORN member, Leroy Johnson, declared in poignant testimony submitted at an Atlantic Yards public hearing in July 2009. “Our landlord is trying to convert our building from Section 8 to market rate. How are people going to be able to afford Market Rates? The people in my building cannot afford $2,000 per month rent.”
ACORN had just helped him preserve his building, and Johnson was understandably appreciative. “Where are people going to go? There is no housing left in Brooklyn, let alone any housing that is affordable,” he declared.
“That is why we need to Build Atlantic Yards and BUILD IT NOW!” he concluded.
For Forest City Ratner, “affordable housing” has proved a potent tool, used to marshal grassroots support, secure political backing, and marginalize dissent. Officials like de Blasio, however ambivalent about a mega-project spanning 8 million square feet over 22 acres, have said the housing, not the arena and major league team, swayed their support.
When Atlantic Yards was proposed in December 2003, it came with a trifecta of selling points: “Jobs, Housing, and Hoops,” according to the developer’s slogan. While the “Hoops” stayed on course, ultimately bringing the NBA’s Brooklyn (formerly New Jersey) Nets, “Jobs” and “Housing” went through major gyrations.
Forest City promised 10,000 permanent jobs in four office towers planned to wrap the arena, but three of those towers have been swapped for housing. The promised 15,000 construction jobs actually meant job-years, a rarely explained piece of context.
The affordable housing saga remains murky. According to Bertha Lewis, the theatrical leader of New York ACORN, a co-founder of the Working Families Party, and a member of de Blasio’s inner circle, Atlantic Yards was — at least before ACORN entered the picture — slated to be an arena tethered to mostly luxury housing.
Lewis has told multiple interviewers that, only after a January 2004 meeting in Forest City Ratner’s boardroom at the MetroTech Center in Downtown Brooklyn, with 30 activists in tow, did the developer agree to ACORN’s ambitious 50/50 affordable housing plan, with 50 percent subsidized units and 50 percent market, devised after consultation with the group’s members.
Evidence suggests that Forest City had discussed a housing deal, at least informally, by the time Atlantic Yards was unveiled in December 2003. That deal aimed to inoculate the developer against protest from its nearest neighbors, who could be cast as selfish gentrifiers unwilling to accept affordable housing, which was used to justify a dramatic change in scale.
It also gave Forest City community backing for the state to pursue eminent domain to acquire property, to override zoning to allow taller towers, and to bypass the City Council, which typically oversees land use decisions.
In “late 2003,” Lewis has stated, “ACORN approached Forest City Ratner and began a spirited dialogue about its plans.”
Forest City, she’s said, wanted a so-called 80/20 plan, with 80 percent market rate and 20 percent low-income housing. (Contradictorily, she’s also claimed, “There was no plan to do anything affordable in that project, whatsoever.”)
Documents indicate that Forest City, as of October 22, 2003, indeed was planning 80/20 towers, a typical mix in the era of Mayor Michael Bloomberg. In a New York magazine article published that month, developer Bruce Ratner touted 5,500 apartments to “serve various income levels.”
Maybe that meant an 80/20 plan, maybe not. But six weeks later, when Atlantic Yards launched, it came with a 50/50 arrangement like the one ACORN would later endorse.
At the opening press conference on December 10, 2003, held at Brooklyn Borough Hall, Ratner declared that building 4,500 rental units “doesn’t mean only market-rate housing, it means middle-income and it means affordable housing.” (Like many, he equated “affordable housing” with low-income housing.)
Ratner, contradicting Lewis, would later cast it as an enlightened corporate strategy, with no credit to ACORN: “When we first announced this project, before any community came to us, I said 50 percent of rental units will be affordable and middle income.”
As Lewis told it, ACORN’s support was contingent on a lot “of truly affordable housing. I mean significant, not the 20 percent stuff. We’re thinking half. Poor people, working people, we want half — you can’t just do luxury.”
Then again, “working people,” in the Atlantic Yards formulation, stretches well beyond “poor people.” Of the 4,500 rentals, 20 percent, or 900, would be geared to low-income families, just as with the 80/20 program Lewis decried. The real shift, getting to a 50/50 plan for the rental units, regards the moderate- and middle-income housing.
According to Lewis, Forest City executive Jim Stuckey, from 2003 to 2007 the company’s Atlantic Yards point man, had declared that more than 20 percent affordable housing was economically unfeasible. “There’s no precedent for 50 percent, period,” he said.
Actually, there was: in 1998 the New York City Housing Development Corporation, which funds city-sponsored affordable housing by allocating tax-exempt bonds and direct subsidies, initiated the New Housing Opportunities Program. The program added 30 percent moderate- and middle-income units to the 20 percent low-income ones, thus creating a 50/30/20 template.
But who would get the additional 30 percent slice? Over the history of Atlantic Yards, that cohort has shifted. Lewis and her New York ACORN colleague, housing expert Ismene Speliotis, initially gained kudos not by increasing low-income housing but by seemingly making the other subsidized housing more affordable.
Though middle-income units may go to households earning up to 175 percent of AMI, Forest City, as City Limits reported in 2005, “agreed to lower the cap to 160 percent, and possibly as low as 140 percent.” (In 2005, AMI was $62,800, so 160 percent meant $100,480 for a family of four and 140 percent meant $87,920.)
The configuration with the lowest cap offered 900 moderate-income units, with 450 for those from 60 to 80 percent of AMI, and another 450 for those from 81 to 100 percent of AMI. That left 450 for middle-income households from 101 to 140 percent of AMI.
Instead, Forest City chose the scenario that flipped the ratio, with middle-income units double the number of moderate-income ones. There’d be 450 units spread among moderate-income households earning 60 to 100 percent of AMI, 450 for middle-income households from 101 to 140 percent of AMI, plus 450 more for those from 141 to 160 percent of AMI.
That wasn’t the last switch. Soon after the housing deal was signed in 2005, Forest City swapped office towers for condos. (The one remaining office tower — slated to loom over what is now the plaza outside the Barclays Center — is on indefinite hold and not even part of the developer’s public presentations.)
That seemed to upend the 50/50 pledge, but the Housing Memorandum of Understanding left a loophole: “If the projected number of residential units should increase for any reason that the Developer determines to be economically necessary, both the Developer and ACORN will work towards developing a program that follows the same guidelines and principles set forth in this document.”
That memorandum was soon incorporated in the community benefits agreement, a much-touted side contract, the first in New York City, purported to guarantee local hiring, job training, and affordable housing.
To critics, Lewis and allies have always had a response: Atlantic Yards promises more subsidized housing compared with other projects, especially in Downtown Brooklyn, where a misguided rezoning, mainly aimed to spur office space, instead spawned luxury housing. (The counterargument is that Atlantic Yards got more government help.)
As Speliotis put it at a public hearing this past April, pushing back on those perceived as slowing the project, “We are losing our neighborhood, while we fight each other.”
That better-than-the-alternative argument won over some Atlantic Yards critics. One principle of BrooklynSpeaks — the mend-it-don’t-end-it coalition that helped wrangle the housing deal announced in June — was, as of 2009, to “Create affordable housing that meets the community’s needs,” using the Brooklyn median income instead of “the much higher regional AMI.”
Perhaps recognizing that was an impossible goal, more recently they instead focused on getting the state to force Forest City to come closer to the original ten-year schedule.
As a June 2014 deadline approached to close Forest City’s deal with Greenland, the coalition posed a threat. The Fifth Avenue Committee, a community development corporation based in Gowanus, and civic groups in BrooklynSpeaks prepared a civil rights lawsuit. It contended that the delay in the project to 2035 made it less likely that black families would remain in the neighborhoods near the project to take advantage the lottery’s community preference, which reserves half of the units for residents of the four community districts near the site.
That gave activists leverage to get the state to impose the new deadline and penalties for delays, as well to establish as an Atlantic Yards Community Development Corporation, a subsidiary set up by the Empire State Development Corporation, to monitor the project.
That achievement prompted the Fifth Avenue Committee and BrooklynSpeaks to plan a summer celebration August 21 for “our win in the fight for affordable housing and accountability at Atlantic Yards.” But the invitation didn’t mention the skewed affordability in the next two towers.
The new timetable surely represents progress, since 900 low-income units will have far more impact by 2025 than 2035. Still, in a recent interview with City and State, Michelle de la Uz of the Fifth Avenue Committee, who was Public Advocate de Blasio’s appointee to the City Planning Commission, acknowledged, “There’s need at all ranges, but much of the need really and largest gap is on the folks that have lower incomes.”
Former Brooklyn Borough President Marty Markowitz had pledged that the housing would “go to those that need them the most,” but that’s not so. Today Forest City, as well as backers like Deputy Mayor Alicia Glen, has begun to call those middle-income units “workforce housing,” aimed to keep teachers and cops and nurses in the city. However a defensible goal, it has little to do with ACORN’s restive, yearning constituents.
Like his predecessor, de Blasio has set some ambitious benchmarks for affordable housing: 80,000 units to be built and 120,000 preserved. In that plan, only 11 percent are supposed to go to middle-income households.
Atlantic Yards, obviously, is a departure, though it’s a higher-cost area of the city build. So de Blasio must drop some rule-of-thumb priorities — such as affordable housing for the less affluent — that he once professed for the site.
The problem, as Mayor de Blasio might tell his previous, councilmanic self, is that the rocketing of real estate costs and regional AMI — even as the incomes of the poor and working-class have stagnated — makes it tougher to deliver for the neediest.
At a May 2004 City Council hearing on Atlantic Yards, de Blasio declared that he “had a problem” with the notion that households with incomes of $150,000 might get subsidized housing, adding, “What we need for affordable housing in New York City is for the lowest incomes slanted downward, not upward.”
He asked Forest City executive Stuckey for specifics. “We understand,” Stuckey stated in a voice seemingly tempered with concern, “if you are earning $140,000 than that is not considered to be an affordable housing unit.” But an apartment for a family earning $30,000 to $50,000, “that is very well an affordable unit.”
Economic Development Committee Chair James Sanders seconded the notion, suggesting that $20,000 to $40,000 was low income, and $50,000 to $70,000 the next level. “Any time you go over 90, 100 [thousand], I don’t think any of us are thinking it is moderate any more. I think we would say that is market, and that is not what we need as much in Brooklyn right now.”
Then-Council member (and now Public Advocate) Letitia James, the project’s leading political opponent, pressed Markowitz, Atlantic Yards’s biggest political booster, about the bounds of affordability.
“Middle-income housing,” the borough president responded, “is somewhere in the area of $50 to $80,000, affordable housing is below that.”
A year later, at the second and last Council hearing on Atlantic Yards, Markowitz faced cross-examination from gadfly Council member Charles Barron, a former Black Panther representing East New York.
“The housing,” Barron stated. “50 percent is luxury, correct?”
“Market rate,” responded Markowitz.
“30 percent moderate, right?”
“Moderate middle,” continued Barron. “Most of us can’t afford that either.”
Markowitz smiled but looked combative: “I know you can afford it.”
“That's 80 percent,” Barron continued. “It’s not about me and it’s not about you, it’s about the people.”
Markowitz raised his eyebrows, enduring the expected tongue-lashing from the Council’s resident radical.
“When you all say 50 percent affordable housing, that’s not true. It is 20 percent low-income, and 80 percent is moderate to high,” Barron said. “This is going to be instant gentrification. That community has already been gentrified. And with this proposal it will be instant gentrification. But you don’t care about that because the Nets are coming. You gotta play ball.”
The borough president, Barron continued, was “fine with giving” Ratner the Metropolitan Transportation Authority’s Vanderbilt Yard — the key public property at the heart of the Atlantic Yards site — with no competitive bidding. “Once you say jobs and affordable housing to us, the process goes out the window,” he declared.
“Let’s see if I can answer this,” Markowitz replied calmly, proceeding to fudge the difference between the 8.5-acre rail yard and the rest of the 22-acre site, which included private homes and businesses, as well as city property and public streets. “The Atlantic Yards area has been available for any developer in America for over 100 years … It represents a whole new possibility of a formerly abandoned area.”
“There are people that have worked for the City of New York that are teachers, firefighters, cops, regular civil service workers, that may earn $45-, $50,000 a year that are in dire need of housing too,” Markowitz added, as if anticipating Glen’s 2014 remarks.
Barron nodded skeptically.
“I don’t expect you to agree, it’s okay,” Markowitz continued. “The jobs and the housing will go to those that need them the most.”
A year later, in July 2006, some of “those that need them the most” flocked to a ballroom at the Marriott hotel in Downtown Brooklyn, drawn by a full-page ad for a Forest City-sponsored information session on affordable housing.
Even then, at much lower AMI than today, the working-class, largely black audience found their expectations confronted rude reality. The units were billed as “rent-stabilized,” since all the units participating in the program see their annual rent increases determined by the Rent Guidelines Board. But that did not mean “low-income.”
As one attendee asked semi-apologetically, to applause, “Where is the stabilization if the two-bedroom apartment is over $2,000?” Another questioner challenged the way AMI was calculated.
Lewis fell back on context. “There’s 96 projects going on in Brooklyn right now,” she said. “Not a scrap of it is affordable.” Not quite, but the reality was still ugly: ACORN’s report, “Sweetheart Development,” issued in March 2006, said that only 7 percent of the units in 87 new developments in and around Downtown Brooklyn included affordable housing, though city officials disputed that. (There’s more now, up to 1,100 in the next three years, according to the Downtown Brooklyn Partnership, though the actual affordability is unclear.)
Many left the Marriott disappointed, with the Observer suggesting that Lewis and Stuckey “were a little hard pressed to respond.”
In the fall of 2007, then-Council member de Blasio, gearing up to campaign for borough president in 2009 — an effort he’d drop once term limits were overturned, ensuring another term for Markowitz — invited bloggers to a freewheeling Q&A session that delved into affordable housing.
De Blasio suggested, not unreasonably, “a tiered approach, whenever humanly possible … between the lowest-income folks, which is families under $20,000, up to some level of moderate- or middle-income. Some people would cut it off at $60,000; some people would cut it off at $80,000.”
He acknowledged the tension between maximizing a wide spread of incomes — which requires more subsidies — and increasing the number of units, easier to achieve if apartments require higher rents.
As chair of the Council’s Committee on General Welfare, de Blasio said he’d prefer to help the neediest, but as a representative of gentrifying Brooklyn, “it’s perfectly legitimate” to go to $80,000 to help working families.
Should households earning six figures, de Blasio was asked, get subsidized housing?
“Definitely below six figures,” he responded. “Absolutely below six figures. Over $80 [thousand] I don’t think is what I’m thinking about, although there may be some exceptions.”
Rather than pursue the borough presidency, de Blasio, with the Working Families Party’s backing, won the race for public advocate. He went after bad landlords but remained quiet about Atlantic Yards. Though he’d long praised the community benefits agreement, he never criticized Forest City’s failure to hire the independent compliance monitor the CBA required.
Whether influenced by Bruce Ratner’s campaign contributions or Lewis’s advice, or perhaps the pragmatic recognition that subsidies were finite, de Blasio avoided criticizing the first Atlantic Yards tower, though it delivered far fewer family-size units than promised. (Forest City had pledged that 50 percent of the affordable units, in floor area, would have two or three bedrooms, but there were none of the latter and only 20 percent, in unit count, of the former.)
Indeed, my investigation showed that, while city officials pressured Forest City to add more than the few two-bedroom apartments first proposed, they agreed that those new units could be skewed toward those who could afford higher “affordable” rents, households earning six figures. That saved Forest City about $1 million. The most expensive affordable two-bedroom apartments in that tower, according to a presentation Forest City prepared, would rent for $2,839/month, calculated from 150 percent of AMI, not 160 percent, as in the next two towers.
After criticism during the mayoral campaign for his posture toward Atlantic Yards, de Blasio promised progress on the affordable housing. “On my watch, it will happen,” he told the Times, in the last words of a pre-election profile.
The question, left lingering, was whether he would offer carrots or sticks.
Though the residential market in and around Downtown Brooklyn has been booming, Forest City proceeded very slowly on Atlantic Yards housing. The arena broke ground in March 2010, with the first tower said to start as soon as six months later. But the building didn’t launch until until December 2012.
Part of the delay involved an audacious gamble: the rollout of a new system — and factory at the Brooklyn Navy Yard — to build the tallest tower ever using modular technology, creating finished apartment segments that could be trucked to Prospect Heights.
Explaining the modular plan, Ratner told the Wall Street Journal in November 2011 that existing incentives for 50 percent affordable buildings “don’t work for a high-rise building that’s union built.” Of course, that’s exactly what Ratner proposed and the state approved — twice. (He also claimed that the ten-year timetable, used to estimate such things as project benefits, was “never supposed to be the time we were supposed to build them in.”)
The first modular building, however, has been delayed, stretching the promised two-year timetable to potentially three years. The production model has some snags, as evidenced by unit façades flapping in the wind on Dean Street.
Meanwhile, Forest City Ratner — surely pushed by its parent, publicly traded Forest City Enterprises — decided to find a new investor. That would lower its risk regarding delays and its obligation to build costly infrastructure: a new railyard to store and service Long Island Rail Road trains, and a deck necessary to build towers over that yard.
Last year Forest City announced it would sell 70 percent of the remaining project to Greenland, which has charged into major world cities with big investments. Forest City, which once hoped to get book value for its share of the $545 million it had invested, instead got $200 million from Greenland, thus suggesting the project was — for now — worth only about half the firm’s investment. The developer then announced an “impairment,”or lowered asset value, of $148.4 million net of tax.
Could Atlantic Yards have been a bad deal for Forest City? Maybe, but the company now sounds positive, and so do investment analysts.
After all, if the affordable housing can reap higher rents than previously expected, the numbers change. David LaRue, CEO of Forest City Ratner parent Forest City Enterprises, told investment analysts this month that “we have a structure in terms of the definition of affordable that we think is appropriate in the marketplace.”
Forest City will earn a 5 percent development fee for the project overall. And the value of land in nearby Downtown Brooklyn has skyrocketed in 18 months — from $75 to $350 per square foot — which should make the Atlantic Yards condos more valuable.
The booming market is surely one reason why Greenland — despite Forest City’s claim it was only cost-effective to build modular — plans to build the next few towers through conventional means.
Another reason Atlantic Yards looks financially more attractive is that, according to a report in a legal blog, Forest City has raised $249 million in low-cost financing, likely for the two new condo towers recently announced, as well as future towers.
The source is a lightly regulated federal program called EB-5, which gives immigrant investors green cards for themselves and their families if their $500,000 investment, parked for a few years with little or no interest, can be shown to “create” ten jobs. (Fortune magazine just produced a tough investigation of the program.)
If Forest City’s board simply ran out of patience, the Greenland deal might resemble Ratner’s 2009 decision to sell 80 percent of the Nets at a discount to Russian oligarch Mikhail Prokhorov, who has since seen the value of the team skyrocket.
The affordable housing will emerge in a transformed market for builders and renters, as AMI levels float higher. Five years ago, at a public information session in July 2009, Forest City executive (and now-CEO) MaryAnne Gilmartin estimated that affordable rents ranged from $12.50 per square foot for low-income units to $30 “for the highest level of middle-income.”
No longer. A two-bedroom apartment at $2,972 a month and 800 square feet would cost more than $44 per square foot, while an 950-square apartment would cost about $37.50 per square foot.
Such figures nudge well above Gilmartin’s $30 per square foot. The average price per square foot in Downtown Brooklyn is $52.84, while the median is $48, according to Brownstoner, as of August 21.
If New York state has now imposed new sticks on Atlantic Yards, in the form of a ten-year deadline, the favorable circumstances for Atlantic Yards have been aided by some carrots from de Blasio.
The BrooklynSpeaks negotiators got a commitment for faster “affordable housing,” but no say in the range of affordability, which was already in discussion with the administration. So, if de Blasio couldn’t offer the increased subsidies Forest City apparently sought in April, he could relax parameters for affordability. As AMI rose, to truly counteract gentrification, he would instead have had to tighten the parameters for affordability, pushing for more units at a lower percentage of AMI. (After all, AMI should rise further by the time the new towers open in two years or so.)
So far the Atlantic Yards buildout departs from the housing deal Forest City signed with ACORN, which promised 20 percent of the subsidized housing in each of five “bands,” from low-income to middle-income.
The ratio among “bands” was achieved in the first tower, albeit with few larger units. That deficit is made up in the next two buildings, which should have 30 percent two-bedroom units and 5 percent three-bedroom units, a significant improvement.
But they likely will go mostly to the highest-income cohort. The new towers don’t offer an even distribution, since 50 percent of the affordable housing will be in the top middle-income band. Also, 15 percent will be in the second middle-income band, 5 percent in the moderate-income band, and 30 percent in the low-income bands. (Overall, 40 percent of the subsidized housing should be, as promised, in the low-income bands, confirmed Council member Brad Lander, though it’s unclear whether the affordability of the remaining subsidized units will conform to the 2005 promise.)
Though the new 100 percent affordable buildings depend on that big chunk of middle-income housing, supporters of the June 27 deal didn’t stress that.
“We are thrilled to support low-income residents of Brooklyn in their struggle to keep affordable housing in downtown Brooklyn,” said Ted De Barbieri, an attorney working on the shelved lawsuit, in the BrooklynSpeaks press release.
“To finally get to a place where we are moving full steam ahead on this ten-year agreement for a wide range of hard working families is welcome news,” declared Speliotis, now of the Mutual Housing Association of New York.
The agreement involves careful use of HDC’s Mixed-Income Program, which includes two subsidies. One — the sale of tax-exempt bonds — costs the city little, since the burden falls mainly on federal taxpayers. Still, the city has a limited amount of bonding capacity to allot and thus must pick among projects.
The second subsidy, a second mortgage from HDC corporate reserves, is keyed to the affordability of the units, and thus offers wiggle room.
Low-income units get $85,000 per unit; those eligible for the units can have income levels up to 100 percent of AMI, as long as rents are calculated from 80 percent of AMI. (That’s well above the 50 percent of AMI for low-income units in the Forest City/ACORN agreement.)
Middle-income units, which get a $65,000 subsidy, face a different cap: units must have rents calculated at 130 percent of AMI, even if those eligible can have incomes up to 175 percent of AMI.
But when rents are calculated above 130 percent of AMI, as with half of the apartments in the next two towers, the units get no second-mortgage subsidy.
So it was misleading for the mayor to say that “we’ve secured nearly twice as many affordable units for our City investment,” since those units are not secured by the city direct subsidy but depend simply on tax-exempt bonds. Thus, while the B2 tower, with 145 of 181 affordable units eligible for subsidy, has a total subsidy of $11.6 million, each of the next two towers, with about half the 300 units eligible for subsidy, has about $11.8 million in subsidy.
While de Blasio at a press conference called Glen “famously an aggressive negotiator,” there’s clearly a trade-off between subsidy and affordability.
The two new towers could have provided greater affordability had all (or more of) the units been eligible for the Mixed-Income Program. And that simply would have required more city subsidy to ensure rents were based on 130 percent AMI, bringing down those two-bedroom rents to some $2,400.
On July 1, Glen found herself on NY1 defending the deal by stressing that “the affordability crisis is hitting people not just at the low-end of the spectrum.”
“Our moderate- and middle-income families,” said Glen, tossing out examples like cop, nurse, and teacher, “are the very people who lived in these neighborhoods for generations and need housing. I think it’s shocking that the city has gotten so expensive over the past decade that people who make $100,000 a year are now considered really in the sweet spot for needing affordable housing.”
“So I don’t think it should be shocking to people,” stated Glen, who suggested that “we’re also serving 30 percent of the families at or below $40,000 a year. Very low income families which are struggling.” (Actually, only 5 percent of the units would serve families below $40,000 a year.)
Though remaining positive about Atlantic Yards, activists connected to the deal aim for far more affordability elsewhere, and yesterday held a march calling for what organizer Jonathan Westin of New York Communities for Change described as “an aggressive departure from the philosophies of the Bloomberg years.”
As Westin recently wrote in the Huffington Post, regarding a project known as Astoria Cove, “We want to prevent the ‘Brooklynization of Queens’ … namely the loss of mixed-income, economically diverse communities.”
He didn’t say that Atlantic Yards represented that loss, but the contrast was clear: NYCC has proposed a new 50/50 model. In one version, half of the units would be market and half low-income, up to 60 percent of AMI. In another, producing all-affordable buildings, the low-income units would be coupled with an equal measure of moderate-income apartments, capped at 100 percent of median income. The goal, they say, is “real affordability.”