• What Will 'Affordable Housing' Mean Under De Blasio?

Pricey Building Raises Questions for De Blasio Housing Plan

A development that used generous subsidies and largely offered high-rent units represents the kind of deal the mayor's affordable housing initiative ought to avoid.

Affordable housing developers and advocates are praising the recent appointment of Goldman Sachs alumnus Alicia Glen as Deputy Mayor for Housing and Economic Development. As the City's new housing czar, Deputy Mayor Glen is at the helm of crafting and implementing Mayor de Blasio's bold new housing plan, a crucial component of his progressive vision to attack inequality in New York City.

On Goldman Sachs's website, Deputy Mayor Glen describes the Bradford (aka the Acacia, 1560 Fulton Street) , a 105-unit Brooklyn building she co-developed in 2010, as work that she is "particularly proud" of. In the short clip, Deputy Mayor Glen notes that 30 percent of Bedford Stuyvesant residents live in poverty and that officially 15 percent are unemployed. She then showcases the Bradford as a transformative project poised to provide needed housing and economic growth for the neighborhood.

Unfortunately, the Bradford represents a particularly poor approach to the creation of affordable housing and raises four fundamental questions that the de Blasio administration must address if it hopes to deliver necessary housing and equitable community development:

Affordable housing for whom? The majority of the Bradford's rents are out of touch with the needs of Brooklynites. While 20 percent of the units are quite affordable (mainly 1 bedroom apartments renting at $400 per month, set aside for individuals earning less than $18,000/year), 80 percent of the "affordable" units were initially set at rents of $1,900 per month for a 1 bedroom and $2,300 per month for a 2 bedroom. In 2010, half of all Bedford Stuyvesant households earned less than $35,000/year. This means that half of Bed Stuy families would need to pay 80 percent or more of their pre-tax income to live in one of these 2 bedroom apartments. Subsequently, according to filings at the City Register, the owners of the Bradford renegotiated and weakened the terms of their regulatory documents to increase the income limits by over 20 percent on almost half the higher rent "affordable" apartments—a practice usually reserved for projects experiencing difficulties attracting households within the stipulated income brackets. Given the demand, truly affordable housing in New York City should never face issues finding tenants. Subsidizing Goldman Sachs to build essentially market rate housing in Bedford Stuyvesant is a "trickle down" approach to community development, a strategy Glen has long championed. People who can afford almost $2,000 per month for a 1 bedroom apartment already have options in central Brooklyn. When private developers, such as Glen's Goldman Sachs Urban Investment Group, access both public land and public subsidy to build, they should deliver housing targeted to the broad spectrum of residents struggling to remain in their communities during these tough economic times.

Affordable where? Given the scarcity of public land available for affordable housing production, inclusionary zoning is intended as an incentive for the private market to build permanently affordable housing on private land in exchange for allowing developers to build bigger buildings. Projects receive a 33 percent density bonus in return for creating 20 percent of the building's floor area as permanently affordable lower income housing (within the same building or offsite in the same neighborhood). The Bradford, however, enjoyed a density bonus even though none of its apartments are permanently affordable. Why? Glen and her development partner, BRP, utilized certificates generated by The Garvey, a nearby publicly subsidized affordable project (also developed by BRP/Goldman) built largely on public land, to satisfy the inclusionary requirements. While legal in New York City, using affordable housing built on public land to generate an offsite development bonus squanders the power of inclusionary zoning. Public development sites should already be earmarked for the production of affordable housing. The practice of allowing City-owned sites to generate an offsite inclusionary bonus fails to provide a net increase in affordable units. Mandatory inclusionary zoning is a central component to Mayor de Blasio's housing plan, projected to generate 25 percent of his 200,000 unit target. Is Deputy Mayor Glen committed to implementing a stronger, more effective citywide inclusionary zoning policy, or will she perpetuate the current, watered down version that fails to produce sufficient amounts of affordable housing?

Affordable at what cost? The subsidies offered by the City are not commensurate with the Bradford's public benefit in terms of affordability. The City provided the Bradford with $6.83 million in subsidies through its Housing Development Corporation, as well as with $4.38 million in City Capital funds, $1.9 million in HOME funds and $1 million in Housing Trust Fund subsidies through the Department of Housing Preservation and Development. This amounts to a $14.1 million public investment for 83 higher-rent units and just 21 lower-income apartments. At a public cost of $135,000 per unit, or $670,000 per unit if we only consider the 21 truly affordable units, this project is an inefficient use of taxpayer dollars. These figures do not even take into account the fact that two-thirds of the project's land was public land donated to the developers, nor do they include either the federal subsidy granted in the form of a 39 percent tax credit on $15 million of qualified investments through the New Markets Tax Credit program, or the value of the project's 25 year extended 421a property tax exemption. In addition to strengthening housing commitments, the de Blasio administration must make more efficient use of limited housing and economic development incentives.

Affordable for how long? The majority of the Bradford's land was city owned property given to the developers at no cost. Land is New York City's most precious resource for the production of affordable housing. The Bloomberg administration required permanent affordability only on select projects, such as Hunters Point South. To maximize public investments, the de Blasio housing plan should go further and require all affordable housing built on public land or receiving generous subsidies to be permanently affordable. When the City gives scarce land away to a private developer, it has the power and the duty to ensure that the housing built will remain for future generations.

While the Mayor has repeatedly indicated that his top staff will be following his lead and vision, in the world of affordable housing policy, the devil is in the details of voluminous regulatory documents—terrain that no mayor has the time to wade into. The role of the Deputy Mayor for Housing is to ensure that these details align with the Mayor's vision of lasting change and tenant protections. If the de Blasio administration hopes to address the current affordable housing crisis, the Deputy Mayor will have to do more than achieve meaningless development quotas. She will have to tackle the excesses of the ineffective and inefficient development approach that she has championed in the past.

HPD submitted a response to this article.

Kerim Odekon

Medical Student

Mr Colvin Grannum’s defense of the Bradford (below) is expected given his organization’s connections to the projects and private developers discussed above, but he side-steps some very important points that I hope to highlight.

Mr Grannum implies that the 80 percent high-rent units in the Bradford are providing affordable housing to “moderate-income households such as postal workers, transit workers, and schoolteachers , [who] are shut out as few housing options are targeted to them despite their potential to make civic, social and economic contributions to the neighborhood”. In fact, I argue that it is exactly these households who are excluded from the Bradford. In debates about affordable housing we need to examine real numbers, not poorly defined concepts like “moderate income” or “middle income” which mask buildings that are priced out of reach to millions of NYC residents. If these high-rent affordable apartments were truly in demand and priced within reach of moderate-income households, then why were only 12 out of 83 apartments picked up through the initial lottery published here, and why did the Goldman/BRP petition almost a year after the initial housing lottery to weaken the regulatory agreement by increasing the required income limits up to $194,415 as evidenced by the remarketing of these remaining 71 units here.

In my almost seven years working in the NYC Department of Housing Preservation and Development’s Planning, Preservation and New Construction Finance units, I never saw this problem arise for affordable housing targeted within reach of moderate-income households. It is also important to note that the Bradford does not contain a single permanently affordable unit, all but guaranteeing its future as a publicly subsidized island of wealth.

Grannum’s defense of trickle down community planning is not new – he was recently quoted in New York Magazine on his philosophy that for community development to flourish in Bedford Stuyvesant one must “attract affluence”. As anyone who walks down the neighborhood’s beautiful tree-lined streets can see, Bedford Stuyvesant has no problem attracting affluence. The neighborhood does, however, have a problem providing housing opportunities to the children of long-time residents who decide to become teachers, or work in the public sector, or at vital non-profits, and struggle to find an affordable place to live while lawyers and financiers argue over architectural details in their recently cleared out brownstones. The Bradford does not offer any solutions to these families.

As is clear in my reply to Deputy Commissioner Enderlin (available here), nobody is arguing against mixed-income housing. I argue that given the significant City, State and Federal subsidies in the Bradford, that Bedford Stuyvesant residents deserve more responsive housing opportunities from the City of New York. It is unsettling that when one advocates for affordable housing to be accessible to the majority of City residents (more than half of NYC’s two million + households do not earn enough to even apply for, much less afford, the Bradford’s high-rent affordable units) the charge is that one is advocating for the concentration of poverty. Mr Grannum implies there is no alternative to this type of development. Actually, a more equitable alternative path is possible, and it involves creating and mandating economically integrated affordable housing in all of the City’s diverse neighborhoods, accessible to a broad spectrum of New Yorkers. This is exactly the sort of “bold progressive change” that the public expects from the de Blasio administration.

A Worthwhile Investment

Colvin Grannum

President, Bedford Stuyvesant Restoration Corp.

Mr. Odekon’s condemnation of this project for not maximizing the production of deeply affordable units wrongly dismisses several important benefits generated by the project. Breaking concentrations of poverty though the creation of mixed-income, mixed-use affordable housing is a worthwhile investment of City resources, and such projects should be mandated throughout the City.

The Bradford, and its companion project, the Garvey, are geographically linked to inject new vibrancy into a severely undeveloped and distressed portion of Fulton Street, Bedford Stuyvesant’s main commercial corridor, and create opportunities for employment and upward mobility for low-income residents. The project is intended to break long established housing development patterns that have resulted in increased concentrations of poverty, while creating a healthier, more sustainable community by attracting new, low- to moderate-income residents and new employers to Fulton Street.

As waves of high-income residents acquire brownstones, poverty is growing increasingly more concentrated on certain blocks and census tracts especially where large developments of low-income housing were constructed decades ago. As these trends continue, geographic income polarization is taking hold within Bedford Stuyvesant. Many low-income residents live in densely populated areas with limited access to fairly priced, high quality produce and merchandise. Affluent homeowners and renters live nearby in low-density, landmarked areas that are attracting trendy restaurants and shops. Moderate-income households such as postal workers, transit workers, and schoolteachers, are shut out as few housing options are targeted to them despite their potential to make civic, social and economic contributions to the neighborhood.

Residents living in areas of high poverty typically experience low rates of upward mobility, high rates of incarceration and low rates of educational attainment and employment. Concentration of poverty is, in part, a product of affordable housing transactions that inadequately account for the economic and social impacts of densely concentrating low-income housing in discrete geographic areas. The economic and social impacts have resulted in great stress on the residents and on public resources. Mixed-income projects like the Bradford help restore equilibrium to these dense clusters of poverty.

In 2004, Bedford Stuyvesant Restoration Corporation (BSRC) set in motion an effort to address the economic distress long plaguing this portion of Fulton Street and teamed up with BRP Companies, an MWBE development firm, to envision several medium density, mixed-use, mixed-income buildings to address the blighted conditions. The resulting project drew the support of elected officials and the local community board.   Recognizing the significant impact that the proposed projects would create for local residents and businesses, Goldman Sachs UIG and the City (HPD and HDC) invested significant resources in structuring and financing the Bradford and Garvey. The Bradford adds income diversity that will generate multiple short- and long-term benefits for a community that currently has a high concentration of low-income housing. First and foremost, the projects create affordable housing for low- and moderate-income New Yorkers, many of whom lived in Central Brooklyn before the projects were constructed. Second, it creates an opportunity for low-income residents to live side-by-side with moderate-income neighbors thereby opening opportunities for them to access the knowledge, relationships and the social capital of their higher income neighbors. Third, the projects have brought new businesses with new employment opportunities for young adults from the area. Lastly, the Bradford is spurring new economic activity as nearby property and business owners examine ways to upgrade their properties. Individually and collectively, these attributes create the potential for stronger economic outcomes for low-income residents who live along and in the vicinity of this long underinvested portion of Fulton Street.

Mixed-income projects have the potential to generate improved social and economic outcomes for low-income residents that the production of high volumes of low-income housing alone cannot achieve.   An equitable housing development agenda would be greatly advanced by projects designed to house low and moderate income New Yorkers in higher income neighborhoods all across the City.


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