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Thread: Developer of Affordable Housing Faces New Challenge

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    Default Developer of Affordable Housing Faces New Challenge

    Square Feet

    Developer of Affordable Housing Faces New Challenge

    By C. J. HUGHES
    Published: May 21, 2008

    Among the many programs established to encourage construction of affordable housing in New York in the last few decades, the state’s 421-a negotiable certificate program uses one of the more original approaches.

    Atlantic Development Group
    Boricua Village, seen in this rendering, is being built by the Atlantic Development Group in the South Bronx.

    Under the program, as a reward for putting up below-market-rate apartments in sections of the city short on housing, developers earn certificates that provide property tax abatements. These can then be sold to developers of market-rate co-ops, condominiums and rental apartments in more affluent neighborhoods.

    Those abatements, which significantly reduce tax bills on individual apartments for a decade, have become a powerful sales tool for market-rate developers. In turn, developers of units that are below market rate have enjoyed a lucrative stream of financing tied to the robust private housing market.

    But on June 30, the 23-year-old certificate program will end. The State Legislature has tightened the 421-a law so that the tax abatements it provides will be available only if developers build low-income housing at the same site as their market-rate units.

    Although affordable-housing developers will no longer sell certificates, they will have access to a newly created trust fund for their projects.

    The changes are causing a prime builder of affordable housing, Atlantic Development Group, which has accounted for about two-thirds of New York’s total certificate units, or 25,000 of 38,000, to shift gears. Worried that the changes may mean it cannot produce as many affordable homes, Atlantic, based in Manhattan, is branching into more market-rate projects.

    “The new system won’t have as much fluidity,” said Peter Fine, the company’s principal, who began his career as a social worker. “It will take longer to get deals done, because of extra layers of bureaucracy.”

    One of four market-rate buildings planned by Atlantic, a 13-year-old for-profit company, is Two Cooper Square, a blocky 15-story red brick tower that is rising from a former parking lot in the East Village, at Bowery and East Fourth Street.

    The 160 units at Two Cooper, which will range from studios to two-bedroom apartments, and from 500 square feet to 1,050 square feet, do not have prices yet. But neighborhood rents for units of similar size average $2,000 to $5,000 a month, according to brokers.

    Completion of the $81 million project, which is now being excavated, is expected in 2010, Mr. Fine said.

    Two Cooper will also offer 24,000 square feet of retail space on its ground-floor and basement levels. Tenants interested in the berths include boutiques, restaurants and coffeehouses, he said.

    In an unusual deal with the city’s landmarks agency, Atlantic must also restore a dilapidated 1845 town house on the property, which is a third of an acre. Originally known as the Samuel Tredwell Skidmore House, the four-story Greek Revival structure will ultimately be available as a one-family rental, Mr. Fine said.

    Under the current 421-a law, which was created in 1985, when affordable housing developers were hard pressed for public financing, certificates are generated under a fairly consistent formula. One new affordable apartment typically yields five certificates, providing tax abatements for 10 years for five market-rate units. These certificates have traded in recent months for $20,000 apiece.

    That favorable five-to-one ratio could generate considerable income for established developers. “We didn’t have to wait for years for a government agency to deliberate and provide a subsidy,” Mr. Fine said. “It was really a miracle of New York City.”

    Indeed, Atlantic realized about $60 million alone from the Extell Development Company, a national developer, said Extell’s president, Gary Barnett, based on the purchase of an estimated 3,000 certificates over four years.

    The tax abatements allowed by those certificates can save owners of a one-bedroom condo $10,000 over a decade, and they are partly responsible for the successes of the Avery, the Rushmore and the Lucida, three high-end Manhattan condos developed by Extell, Mr. Barnett said.
    Without the certificates, “there will definitely be a slowdown in affordable development, and development in general, in the city,” he added.

    Some critics of the existing program say that it unfairly punishes nonprofit, affordable-housing developers, who reflexively shy away from risks associated with private-market transactions. Another drawback, they say, is that the system is overly complicated and that only developers with established relationships seem to be able to navigate it.

    “This is reflected in the fact that there are only a few affordable-housing developers using it,” said Neill Coleman, a spokesman for the city’s Department of Housing Preservation and Development, which led a two-year effort to reform the 421-a law. About five such developers used it in 2007, though New York has dozens of them.

    But the major impetus for changing the law, which the governor’s office approved in January, is that the certificates’ values are too low — at best producing 20 cents of affordable housing for every dollar lost because of tax abatements, Mr. Coleman said.

    Chester Higgins Jr./The New York Times
    Peter Fine, of the Atlantic Development Group. Atlantic focused on affordable housing.

    In place of selling certificates, affordable-housing developers will now be able to tap a $400 million trust fund, administered by the New York City Housing Development Corporation. It should reach maturity in a year, Mr. Coleman said.

    The fund will be amassed from the property tax payments of residents in buildings that would have been eligible for abatements if affordable housing had been built under the same roof as market-rate units. These taxes will apply if a building is located in a so-called exclusion zone, which is an area that includes New York’s most sought-after neighborhoods, defined by the city.

    Currently, that zone encompasses Manhattan’s midsection. Under the new 421-a rules, however, it will include all of Manhattan, as well as parts of all the other boroughs.

    The idea, Mr. Coleman said, is that developers no longer require so many tax incentives to build in New York. Under the new version of 421-a, as is already the case, developers who build in outlying areas will get tax breaks for 10 to 25 years based on the type of housing.

    Atlantic’s decision to retool its business model does not come as a surprise to Carol Lamberg, executive director of the Settlement Housing Fund, a nonprofit group that has built low-income homes in New York since 1969.
    “They’re losing their niche,” she said. “It was the thing they were good at.”

    As she sees it, the program’s chief drawback is that it awards certificates only after a building is in the ground, thus playing to developers that are relatively well capitalized, like Atlantic, Ms. Lamberg said.

    Still, she thinks the 421-a revisions, coming at the downturn of a market that continues to experience credit problems, could deal a blow to the sector. “It’s one less tool, and we need every tool we can get,” Ms. Lamberg said.

    Despite a course change, Mr. Fine said he is not entirely abandoning the earlier focus of his company, which he founded with Marc Altheim in 1995.
    In fact, at Boricua Village, a 4.5-acre mixed-use project under construction in the Morrisania-Melrose section of the South Bronx, three of the seven residential rental towers, ranging from 8 to 13 stories, in both brick and glass, will be set aside for low-income residents. These towers will have 250 homes, ranging from studios to three-bedroom apartments, of 700 units over all at the project.

    The $250 million development, which is centered on Boricua College, a commuter school with campuses in Manhattan and Brooklyn, will also feature classrooms for 2,000 students and 45,000 square feet of retail space; its first building will open by the summer of 2009, Mr. Fine said.

    Though rents have not been set, a below-market one-bedroom is expected to cost about $650, while its market-rate counterpart would lease for about $1,000, he said.

    Before becoming a developer, Mr. Fine said, his jobs included helping homeless people find housing, and he maintains that charity is part of his company’s mission. “We are really social workers at heart,” he said.

    Copyright 2008 The New York Times Company
    Last edited by brianac; May 21st, 2008 at 06:12 AM.

  2. #2


    Boricua Village? Let's see how long it takes until that place looks as run down as the Taino Towers in East Harlem

  3. #3
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    City’s Affordable Housing Program Faces Trouble Finding Buyers


    Units at Waters Edge, city-subsidized condominiums in Far Rockaway, Queens, have sold much more slowly than expected.

    For all the booms and busts he has lived through, Vincent Riso never thought it would come to this: Offering free 42-inch, flat-screen televisions to lure buyers into government-subsidized homes.

    Historically, such homes have sold quickly. But not at Waters Edge at Arverne, a stretch of 130 town house condominiums Mr. Riso’s company, the Briarwood Organization, built between Far Rockaway’s boardwalk and the A train’s rust-streaked overpass in Queens.

    So last spring, Briarwood, which got $12.8 million in city and state subsidies for Waters Edge, began throwing in as much as seven months’ free maintenance on some units, along with the TV. Still, as of mid-February, roughly three years after the units began arriving on the market, 22 of them had yet to sell.

    The city has received accolades nationwide for its efforts to provide housing affordable to middle- and lower-income households. Mayor Michael R. Bloomberg has pledged to build, save or restore 165,000 such housing units by 2014. But while the city is still filling up low-income rentals, the housing program is struggling on the ownership front.

    Sales are sluggish at some projects, particularly ones in poorer neighborhoods aimed at middle-income buyers. Few units will be built any time soon: since July 2008, the city has made only two deals with developers for new home ownership projects, down from two dozen deals in the 12 months before that.

    Last summer, Mr. Bloomberg and the City Council speaker, Christine C. Quinn, unveiled the city’s Housing Asset Renewal Program, or HARP, setting aside $20 million for developers who agreed to drop the prices of unsold market-rate condos. But the program drew far fewer applications than the city had expected — just five by the Dec. 31 cutoff — so the deadline was extended.

    City housing officials and developers said the reasons for the slowdown were clear. Financing for new buildings has dried up. The HARP program has yet to catch on because developers and lenders were unwilling to cut into profits they were expecting to make. Would-be homebuyers remained hesitant to make the leap, and, crucially, mortgages were harder to get.

    Developers of higher-priced affordable housing were especially hurt by the housing crash, which caused price differences between their units and market-rate homes to narrow. In addition, market-rate homes do not have the resale restrictions that the affordable homes often have.

    Rafael E. Cestero, the city’s housing commissioner, said that during the housing boom, when financing for many projects was lined up, higher-priced units like those at Waters Edge “were deeply affordable” compared with what was then on the market. “We had no idea what was going to happen,” he said.

    Denise Scott, managing director for New York’s Local Initiatives Support Corporation, said her agency’s nonprofit partners were struggling to sell 95 refurbished houses and condos in Bedford-Stuyvesant in Brooklyn, Jamaica in Queens, and Morrisania in the Bronx, all city subsidized and costing $250,000 to $350,000. Some have been sitting on the market for 18 months, she said, even though their prices were cut from 15 percent to 30 percent.

    Ms. Scott said that demand was down but that the biggest impediment was banks’ unwillingness to issue mortgages.

    Samuel G. Gaccione, executive vice president for the TNS Development Group, said his group planned upgrades at the Shelton, a subsidized building under construction in Bedford-Stuyvesant — granite countertops, stainless-steel appliances, hardwod floors — to prepare for a bad market and buyer trepidation.

    But the fact that some homes are standing vacant in struggling neighborhoods has caused some to question the wisdom of putting them there in the first place. Waters Edge occupies the highest strata of what the city defined as affordable: Three-bedroom units are going for up to $344,000 in a neighborhood where the median income is $45,221, according to census data.

    Javier Valdés, deputy director of the community advocacy group Make the Road New York, based in Bushwick, Brooklyn, said the city should change how it calculated affordable income limits. Generally, people eligible for low-income subsidized units can earn up to 80 percent of what is known as the region’s “area median income,” which in 2009 was $76,800. Moderate-income housing is open to people earning from 80 percent to 120 percent, and middle-income housing is open to people earning 120 percent to 175 percent.

    But those income figures are based on a broad region that includes Long Island and Putnam, Rockland and Westchester Counties. Mr. Valdés said affordability should be determined by neighborhood. In Bushwick, the median income is $32,328, according to census figures.

    “We understand the difficulty and the balancing act the city has to play, to provide affordable housing to middle and lower income,” Mr. Valdés said. “But if condos are sitting unsold, we do want them given to people who are from the community.”

    Mr. Cestero, the housing commissioner, said the city had long worked to create economically diverse neighborhoods and could not have anticipated the housing bust. He said only a few hundred homes remained unsold and noted that the foreclosure rate among city-subsidized homes was just 0.06 percent. “I don’t look back and think our strategy was wrong,” he said. “I think our strategy was exactly right.”

    Some projects are doing well, especially lower-priced ones. At the Solara, which Briarwood put up in the South Bronx, 151 of the 160 units are under contract, after a year and a half on the market. Prices there range from $108,815 for a one-bedroom apartment to $202,217 for a three-bedroom.

    Seeing this trend, one development switched midstream. The Atlantic Terrace, an 80-unit building in Fort Greene, Brooklyn, built by the Fifth Avenue Committee, a community development group, was originally going to sell 59 units to families earning up to 165 percent of the area median income.

    After the market collapsed, the group lined up an additional $2 million in subsidies to make the homes affordable to people earning far less. The lottery for the units drew 4,881 applicants.

    “We read the tea leaves,” said Michelle de la Uz, the group’s executive director.

    Despite the troubles, the city said that it was nearing the 100,000 mark in the number of affordable units created or preserved and that it was having little difficulty creating and filling rentals, which tend to be aimed at lower-income families and constitute two-thirds of the total.

    Given the market, Mr. Cestero said, the city plans to concentrate on preservation and building mixed-income rentals.

    In Far Rockaway, Mr. Riso said he was almost certain that the last 22 condos at Waters Edge would sell by summer.

    On a recent day, with an Arctic wind whipping off the Atlantic, a rare sight came into view: a new buyer. Ronald Fields, 46, his wife, Naomi, and their 4-year-old son, Taiga, dropped by to see the three-bedroom home they were expecting to close on this month.

    Mr. Fields, who works at the cable channel truTV, could not quite believe he was about to become a homeowner, after saving for a down payment for many years.

    “Two blocks from the beach, a new development, you can’t beat it!” Mr. Fields said.

    And, he added, he was looking forward to that free TV.

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    I wonder how they define "affordable"?

    East Chelsea Residents Push for Park on 20th St.

    A campaign to put a pocket park on West 20th Street goes against another plan to build affordable housing in the spot.

    By Tara Kyle

    This 10,000 square foot lot could give East Chelsea its first park — or, a pocket of affordable housing
    in an increasingly high rent district. (DNAinfo/Tara Kyle)

    CHELSEA — A coalition of neighbors thinks they've found a solution to a lack of green space in Chelsea, in a 10,000 square foot parking lot soon to be vacated by the Department of Sanitation. But Community Board 4 already has designs on that space for another critical neighborhood priority — affordable housing.

    For all the excitement over construction on the High Line, Manhattan Community District 4 still ranks dead last among the borough's neighborhoods for access to parks, according to reports by the Furman Center for Real Estate and Urban Policy and the Department of City Planning. The situation in East Chelsea, bounded by Sixth and Eighth avenues and 14th to 26th Streets, is particularly dire — the only green space here is a cemetery.

    "The situation is going to be untenable from a quality of life perspective," said resident Matthew Weiss, 32, who cited the rising population of young families, like his own, moving into the area.

    Putting reasonably-priced housing on the lot at 136 W. 20th Street has been an interest for CB4 since the West Chelsea Rezoning in 2004, according to district manager Bob Benfatto. The Board most recently expressed its position on the lot in a July 2009 resolution passed in the lead-up to the Western Rail Yards Rezoning, which secured 1,000 units of affordable housing for the neighborhood.

    Park proponents, who created their 20th Street Park organization in September, will get a chance to plead a CB4 committee for a change in position later this month or in January, Benfatto said.

    After knee cartilage injuries and hip replacements, retired architect Frank Misiurski, 72, and his wife Caroly Wilcox, are finding it a bit harder to get around the neighborhood lately.

    And because they live in East Chelsea, the nearest patch of grass is a long way away.
    "In years past, it wasn't an issue — when we were young and vital," Misiurski said. "But now I'm more aware there is no quiet place to go and sit outside."

    About half of the group's supporters are, like Misiurski, aging, long-time residents frustrated by long walks to Union and Madison Square Parks and limited elevator access to the High Line. Within an 8-10 block radius, Misiurski said he's found only one place to sit outdoors — a bench in front of a bus stop at Seventh Avenue and 20th Street.

    "It's not a pleasant place to sit, with truck fumes in your face," he said.

    But many others are parents of young children and teens, said Weiss, who is a member of the group's steering committee. They've received approximately 200 letters of support and endorsements from groups including the Flatiron Alliance, Save Chelsea Now and New Yorkers For Parks.

    Weiss said he's personally motivated by a desire to maximize playtime for his 16-month-old son. By the time he walks over to the Hudson River (five avenues away) or crowded Madison or Union Square Parks (15 minutes), it's nearly time to turn around.

    "It's hard to believe, when you think about it, that Chelsea has a lack of open space, because all you read about is the wonderful High Line and the revitalization of the West Side highway," Weiss said. "Try taking a two-year-old up to the High Line and finding a place to play — it's not a playground."

  5. #5


    Why not build both? -- A narrower affordable housing building and a pocket park. It's not like you can fit a large range of park activities in that small space anyway. Did these residents not know about the dearth of parks before they moved there? And with the prices for units in the area, they could have easily moved to any other Manhattan neighborhood...unless they're tied down to their rent-stabilized apt of course.

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    Deal Keeps 258 Manhattan Homes Affordable

    By Jeff Mays

    HARLEM—Three housing developments in Harlem, Clinton and the Upper West Side will remain affordable for the next 35 years thanks to an agreement between the city and the owner, Related Companies.

    As part of a new tax credit deal, the 258 units will remain in affordability programs such as Section 8 where tenants pay 30 percent of their income in rent, according to the city's Housing Development Corporation.

    The units are part of Mayor Michael Bloomberg's plan to preserve or create 165,000 units of affordable housing by the end of fiscal year 2014. Their affordability contracts were set to expire.

    HDC provided $10.1 million in tax exempt bonds for upgrades at New Horizons at 200 W. 111th St., $25 million in bonds for Terrific Tenements, located at 527 W. 47th St. and 425 W. 48th St. and $36 million for North Park, at 20 W. 102nd St. In exchange, Related agreed to keep the buildings affordable for 35 years.

    The apartments will house up to 1,000 people who are at or below 60 percent of the median income, which is $47,520 for a family of four. The preservation of these affordable units is important because they are in neighborhoods that are rapidly gentrifying.

    "The developments we are announcing today are all the more remarkable for their locations. Make no mistake: all three of these properties are immensely valuable pieces of real estate," said HDC president Marc Jahr.

    Allowing families to remain in their homes "has a tremendous impact on the quality of their lives and at the same time helps to stabilize neighborhoods," Jahr said.

    Mark Carbone, president of Related Affordable - a division of Related Companies - agreed.

    "Most of the tenants would not be able to afford to live in these buildings," said Carbone. "Clinton has changed dramatically since 20 years ago. A lot of young people are moving in and rents are astronomical. We are seeing the same thing at 102nd Street near Central Park."

    New Horizons is also located a block from Central Park.

    In addition to remaining affordable, the buildings are getting interior and exterior overhauls. Carbone said the properties were getting new roofs, energy efficient windows and facade repair.

    Inside, kitchen cabinets are being replaced, floors are being redone, and boilers are being replaced. Some community rooms and landscaping are also being upgraded. The upgrades are almost finished in two of the buildings and will be finished in New Horizons by Dec. 31, officials said.

    Ivan Nieves, a long-time resident of New Horizons, said the improvements will make the building a "better place to live."

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    As for Mr. Moinian, he said providing affordable housing make him "very happy....I hope I am contributing."

    Advocates Say Subsidies for Developers Misdirected

    As West Side Towers Rise, Advocates Say Subsidies for Developers Misdirected

    By Josh Barbanel

    While the mayoral candidates debate how to produce more "affordable" housing, developers such as Joseph Moinian are building it—in glassy new rental towers on Manhattan's West Side, with doorman and concierge service for all.

    A small boom is under way in the area for housing for New Yorkers who have middle incomes or who are among the working poor—with more than 500 subsidized apartments under construction or on the way.

    Developers say that with land costs and construction costs rising, they can't afford to build market-rate rental buildings without deep government subsidies that come with the affordable housing. Those range from tax-exempt bonds to federal tax credits to property tax exemptions and zoning bonuses. But many housing advocates say some of the subsidies would be better spent backing many more affordable apartments—at a lower cost—in humbler neighborhoods. They want the benefits to luxury developers sharply pared back.

    The subsidies come from a state-run program known as 80-20. Developers set aside 20% of the apartments in a building for affordable rentals, with the rest rented at market rates. Tenants are selected through lotteries and are screened to make sure they meet strict income requirements. "Low-income tenants think they've won the lottery when they're selected, but the real lottery winners are the developers," said one builder of low-income housing outside of Manhattan, who didn't want to be identified due to the risk of jeopardizing future projects.

    Mr. Moinian is building a 656-foot-high V-shaped tower on West 42nd Street and 11th Avenue, with retail space, an auto dealership, a basketball court and indoor and outdoor swimming pools. It will include 1,174 apartments, with 236 below-market rate units. He said state financing, along with rising market rents, finally made construction possible.

    Fifteen blocks uptown, TF Cornerstone is seeking approval to put up a 45-story building comprising three offset glass cubes that would cover most of the south side of 57th Street, West of 11th Avenue. The plan calls for 1,189 apartments, including 238 affordable units that will remain affordable for the life of the building. Jon McMillan, an executive vice president of TF Cornerstone, said the building received a city-zoning bonus for including below-market-rate units and is also counting on state support from the state's 80-20 program. That in turn will make it eligible for a 20-year partial tax exemption.

    "We are doing the most common thing developers are doing now," he said. "We can't make rental projects work without the benefits of inclusionary zoning, and tax exemptions."

    Across the street, the Durst Organization has begun construction on a pyramid-shaped, mixed-use building by Danish architectural firm BIG-Bjarke Ingels Group. It will have about 753 rental apartments, of which 20% will be affordable.

    Jordan Barowitz, director of external affairs for Durst, said if building luxury housing was easy, there wouldn't be a shortage of hundreds of thousands of units of housing and "people would be building like crazy."

    Yet many affordable housing advocates say the market-rate developers build only a small share of affordable housing and suck up too much of government resources.

    The state's Housing Finance Agency said it was unable to provide how many projects were built using the 80-20 financing in New York. But city officials say market-rate buildings have provided about 6,470 affordable apartments since 2004 subsidized through zoning bonuses and tax exemptions.

    That works to about 13% of the new affordable housing units built in the mayor's housing plan, but only a fraction of the 150,000 affordable apartments the administration says were built or rehabilitated with city help during the same years.

    Housing advocates also say these projects use up a significant share of the limited supply of $1.9 billion in private-activity bonding authority the federal government provides New York for housing and other purposes.

    That's because the low-interest financing covers a large portion of both market and subsidized-unit construction costs.

    Earlier this month, the state Housing Finance Authority approved a $187 million tax-exempt bond program for an 80-20 project with 375 apartments on Sixth Avenue in Manhattan. Board materials show that the 80-20 program would allocate $2.5 million in tax-exempt financing, plus $18,573 in federal annual tax credits for 10 years, for each of 75 affordable units.

    Advocates are critical of the tax-exemption program available in affluent neighborhoods triggered by participation in the affordable housing program. Because of the high tax rates on new market-rate developments, the exemptions translates into large subsidies for developers.

    "It is about the most inefficient way from the taxpayer's point of view to provide affordable housing," said Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development, a group representing not-for-profit developers.

    This was disputed by Kenneth Lowenstein, a lawyer and former city housing official who works with many developers. He noted that city housing officials received a share of the tax-exempt bonds to allocate for other affordable housing projects. "I have never heard of an example, where the 80-20 program has frozen out a single affordable program," he said.

    As for Mr. Moinian, he said providing affordable housing make him "very happy....I hope I am contributing."

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    Push Begins to Jumpstart Mitchell-Lama in New York State

    Democrats to Unveil $750 Million Middle-Income Housing Plan

    by Laura Kusisto

    A file photo of some of the buildings that make up Co-op City in the Bronx, created
    under the Mitchell-Lama program. Rob Bennett for The Wall Street Journal

    A powerful group of state Democrats plans to unveil on Friday a $750 million plan to build new middle-income housing, an effort to revive the 1950s-era Mitchell Lama program that built more than 100,000 units around the state.

    The Independent Democratic Conference, a group of breakaway Democrats who share power in the state Senate with Republicans, are proposing the construction of several thousand units over the next five years in New York City, Yonkers, Rochester, Buffalo and Syracuse.

    The plan would require the state to spend about $150 million a year to finance more affordable mortgages for developers and create a new tax credit for the developments.

    In New York City, units would initially be targeted at residents making from about $75,000 a year to $100,000 a year for a family of four. Rents for a family of that size would range from about $1,900 to $2,500 a month.

    State Sen. Jeffrey D. Klein, the Bronx Democrat who is the Senate's co-majority leader, said the housing plan is a top priority for his group. "When you talk about affordable in New York, you have to talk about middle-income housing," he said.

    Mr. Klein's group of four Democrats shares power with the Senate's 29 Republicans and a conservative Democrat who caucuses with Republicans.

    In December, Mr. Klein unveiled the broad outlines of his group's legislative agenda, focused on creating an "Affordable New York." The agenda also includes a guarantee of six weeks of family leave, fully funding day-care subsidies and providing $300 checks to seniors to offset rising utility costs.

    The Mitchell-Lama program was created in 1955 through legislation sponsored by New York state Sen. MacNeil Mitchell and Assemblyman Alfred Lama to provide affordable rentals and co-ops to middle-income families, resulting in the creation of more than 100,000 apartments. Similarly styled boxy developments sprung up with a palate of gray and beige—from Co-op City in the Bronx, with more than 15,000 units, to Clinton Plaza in downtown Syracuse, with 305 rental units.

    After at least 20 years, rental landlords and co-op boards can choose to exit the program by paying off the mortgage, and there has been a steady decrease in units.

    Of 169 state-supervised Mitchell-Lama buildings, 93 have voluntarily left the program, totaling about 31,700 units.

    Sue Susman, a 66-year-old resident of Central Park Gardens on the Upper West Side, a Mitchell-Lama rental that left the program about eight years ago, said it created a community where neighbors knew each other and children grew up together and got together for events like Halloween parties.

    "You could have a community that developed over 20 years, 30 years, where some people did well, some people did not do so well, but they could be neighbors," she said.

    Housing experts, some of whom have reviewed the specifics of the independent Democrats' plan, applauded an effort to create more middle-class housing—as long as it doesn't come at the expense of housing for lower-income residents.

    "In the last 10, 15 years as New York has's really pricing out a lot of middle-class people," said John Kelly, an attorney specializing in affordable housing who is chairman of the National Housing Conference.

    Middle-income housing is typically more costly for the state than housing targeted at lower-income residents because there aren't federal subsidies available.

    "The rub is the concern about allocation of resources. The governor has a strongly ambitious housing program that works with the most needy," Mr. Kelly said. "I would not want to see resources taken away from those people to build middle-income housing."

    Nicholas Petragnani Jr., a senior vice president for the Community Preservation Corp., who focuses on central and western New York, said there is a need for middle-income housing that exceeds demand for low-income housing in places such as Syracuse, Rochester and Buffalo. He said low-income residents are well served by state and federal programs, while higher-income residents have benefited from the revitalization of downtowns.

    "The group that's left behind is that middle-income group," he said.

    It is unclear how difficult a political battle Mr. Klein's group would face getting funding for the program. Gov. Andrew Cuomo has publicly made tax cuts a priority, but he also recently announced $100 million in funding for affordable housing.

  9. #9


    Mitchell-Lama also left us with the most horrid - and probably virtually unshakeable - architectural legacy of any program or era in the state's history. I don't think that some people's money should be used to give others free or subsidized housing; and I really don't think the government should be in the business of making the built environment look like trash. Here's hoping this one stalls.

  10. #10


    I agree with you Stroika. Also, affordable housing should be
    Built in distressed areas in the outer boroughs with the hope that they will
    Gentrify further. No one has a birth right to live in Manhattan.

  11. #11


    The Historic Districts Council says the city's historic districts are not to blame for the shortage of affordable housing

    Group member Jeffrey Kroessler says not many affordable units are being built outside protected districts, and notes that the Landmark Preservation Commission has not denied applications for affordable housing development

    By Jeffrey Kroessler / NEW YORK DAILY NEWS

    Wednesday, February 26, 2014, 8:41 PM

    AP Photo

    The sprawling Peter Cooper Village and Stuyvesant Town apartment complexes on Manhattan's East Side, purchased for $5.4 billion in 2006

    Families certainly face long odds finding an apartment they can afford anywhere in the five boroughs. There are many factors underlying the city’s tight housing situation, but the Real Estate Board of New York has fixed on one: historic preservation.

    It is the city’s 110 historic districts, the real estate trade association cries, that are responsible for the shortage.
    Instead of pointing fingers, the development community ought to look in the mirror, where its members would see the real reason so little affordable housing is being built: they are not building it.

    The president of the New York Building Congress, Richard Anderson, recently said of historic neighborhoods, “We’re taking out of development and redevelopment a very large portion of the city. You’ve got a big chunk of the city that’s just off limits.”

    First, it is only about 4% — not a “big chunk” — and second, most New Yorkers approve of protecting our historic neighborhoods.
    Mr. Anderson, which historic district do you think should be opened to redevelopment? SoHo, perhaps? Brooklyn Heights? Sunnyside Gardens? Greenwich Village?

    If REBNY claims that historic districts truly stifle the construction of affordable housing, we should ask just how many affordable units are being built outside those protected districts. The answer is “not many.”
    And before we blame the landmarks law as the impediment, is there actually an instance when the Landmarks Preservation Commission has denied such an application? The answer is no.

    Many more people want to live in historic districts than are able to given the existing housing stock, but does that result in higher rents? Are rents in historic districts really higher than rents just outside the district, or 10 blocks away? In actuality there is very little difference, especially in the older buildings and, of course, rents are rising everywhere. Landmark designation is not the variable.

    In recent years, we have seen a tsunami of new construction in Williamsburg and Long Island City. Can any of the units in those new glass towers be counted as affordable? The Bloomberg administration encouraged that development, but imposed no requirements for including even moderate income units.

    It is certainly ironic that the Real Estate Board has become an advocate for affordable housing, because year after year they lobby for higher rent increases for tenants in rent-regulated apartments. Further, REBNY was instrumental in the introduction of vacancy decontrol, and the elimination of rent stabilization for units renting above $2,000 (now $2,500), or if a tenant’s income rises above $200,000.
    Many affordable units are lost every year through those changes, and there are not enough new units being built to replace them.

    There are also examples in which owners have targeted successful affordable housing. In 2006, Stuyvesant Town and Peter Cooper Village were sold for $5.4 billion, a value that made sense only if regulations were eliminated and all 11,250 units rented at market rate. These are not landmarks, but even if they were that would have had absolutely no impact on the affordability of the apartments there. On the other hand, the new owners did everything they could to shift apartments from affordable to market rate.

    A second example is the Stahl Organization’s application to demolish the landmarked First Ave. Estates, a block of model tenements on E. 64th St., and build a luxury tower that would replace 190 rent-regulated units. The Landmarks Commission has denied their application, and Stahl is suing (after covering the façade in pink stucco).

    Working-class families, white- collar families, artists and scholars, all are hard-pressed to find homes they can afford anywhere in the five boroughs. But the city’s 110 historic districts are not the reason for this shortage. On the other hand, those treasured neighborhoods give New Yorkers 110 reasons to love their city.
    Jeffrey A. Kroessler is a member of the Board of Directors of the Historic Districts Council.

    Read more:

  12. #12
    NYC Aficionado from Oz Merry's Avatar
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    Oct 2002


    Fighting for Affordability

    New York City Mayor Bill de Blasio unveils $41 billion housing plan.

    by Henry Melcher

    Courtesy NYC Mayor's Office

    New York City Mayor Bill de Blasio’s pledge to build or preserve 200,000 units of affordable housing over the next decade was a cornerstone of his mayoral campaign. From the outset, de Blasio set a specific target – and now the city finally knows how he plans to hit it.

    In the heart of Fort Greene, Brooklyn—where glossy apartment towers are rising at a remarkable clip—the mayor unveiled his $41.1 billion strategy to fight back against New York’s affordability crisis. The city is heralding the plan as “the most expansive and ambitious affordable housing agenda of its kind in the nation’s history.”

    The city will provide $8.2 billion for the plan, and hopes to secure $30 billion more from private funds. The rest of the cost will ideally come out of state and federal coffers.

    “This plan thinks big--because it has to,” said Mayor de Blasio in a statement. “The changes we are setting in motion today will reach a half-million New Yorkers, in every community, and from every walk of life. They will make our families and our city stronger.”

    As expected, one of the central pieces of de Blasio’s plan is “mandatory inclusionary zoning,” which will require developers to include below market-rate units at rezoned sites. Under Bloomberg, developers were incentivized—but not required—to make 20 percent of new projects affordable. While inclusionary zoning is a focal point of this plan, it is easy to overstate its impact.

    According to The New York Times, inclusionary zoning under Bloomberg—albeit voluntary—only created 2,800 affordable units since 2005.

    Still, mandatory inclusionary zoning will likely have a significant impact on the size and scale of future development. This part of the plan was foreshadowed in March as the city was hammering out the final details of the Domino Sugar Factory redevelopment. Before granting approval to the project, the mayor demanded that it include more affordable housing. The developer, Two Trees, obliged, and in return taller towers were approved. De Blasio’s New York will likely be a denser New York.

    And a denser New York means a happier development community. Not surprisingly, the Real Estate Board of New York is applauding the mayor’s plan. “It identifies the problems and provides a realistic roadmap for solutions,” said Steven Spinola, the board’s president, in a statement.

    Along with mandatory inclusionary zoning, the City will also “re-examine parking requirements, zoning envelope constraints, and restrictions on the transferability of development rights.” It is also launching two programs to incentive development on vacant lots. This part of the plan received high praise from the city’s architectural community. “The AIA New York Chapter supports the Mayor’s affordable housing plan and notes, in particular, that the plan calls for ‘unlocking’ potential sites for new housing development by changes in regulatory procedures, including potential changes in zoning,” said Rick Bell, the chapter’s president.

    But for all the focus on development, new projects only represent 40 percent of the plan—or 80,000 units. The other, bigger, piece of the pie is directed at preserving the affordable units that currently exist. For starters, the City plans to double the Department of Housing Preservation and Development’s capital budget.

    To slow the tide of deregulation, the City is proposing a host of incentives for property owners to keep units from leaving rent-regulation. It will also focus on keeping currently affordable, and non-regulated units, from dramatic rent increases in the future.

    According to the plan, “such investments will allow current tenants to benefit from improved units, and permit future tenants to be assured that the unit remains affordable, even as the neighborhood’s housing values and rents increase.”

    The City also plans to engage in a “respectful conversation” about the potential of development on NYCHA’s underused land. This proposal, which sounds an awful lot like Bloomberg’s “land lease plan,” was heavily criticized by de Blasio back when he was a candidate.

    Another key focus of the mayor’s plan is reducing homelessness—ccording to the city, 50,000 New Yorkers currently sleep in shelters every night. To lower those ranks, the city will reallocate some funding from shelters to lower-cost permanent housing for the homeless.

    While both housing activists and the development community have lauded the mayor’s strategy, his 115-page plan leaves many questions unanswered. But what is exceptionally clear is the daunting challenge before the mayor. His predecessor claims to have built or preserved 165,000 units of affordable housing in 12 years and now Mayor de Blasio says there is no choice, but to achieve more in less time.

    “We didn’t want to take the easy way out,” said the mayor. “We didn’t want to take the slower path. We wanted to challenge ourselves to do something that had never been done before because our people need it.”

  13. #13
    NYC Aficionado from Oz Merry's Avatar
    Join Date
    Oct 2002


    With Caution, a Poor Corner of Brooklyn Welcomes an Affordable Housing Plan


    The commercial district on Fulton Street in East New York, Brooklyn, has many empty lots and one- and
    two-family homes. Christopher Gregory for The New York Times

    With its rows of two-family homes and its corridors of auto repair shops and storefront churches, East New York sits far away from the heated debates over density and building height that have roiled other, more sought-after Brooklyn neighborhoods like Williamsburg and Park Slope.

    Now, however, the neighborhood, on the eastern edge of central Brooklyn, could emerge as a centerpiece of Mayor Bill de Blasio’s sweeping plan to make housing more affordable by, among other efforts, encouraging more building.

    On Tuesday, one day after the mayor unveiled his plan, people who live in East New York said they would welcome more development and additional affordable housing. But they have their concerns and conditions, too.

    De Blasio Sets a 10-Year Plan for Housing, Putting the Focus on Affordability

    New housing should not overwhelm the neighborhood’s character, one resident, Tommy Smiling, said as he stood outside a bodega on Pitkin Avenue. In swiftly gentrifying parts of Brooklyn like Clinton Hill, where Mr. Smiling’s son lives, “it’s all brownstones, and then you have this skyscraper,” he said. “I’m not into that. Four stories? O.K., that’s not bad.”

    A view of East New York, Brooklyn, one of the neighborhoods
    that are a focus of Mayor Bill de Blasio’s affordable housing plan.
    Christopher Gregory for The New York Times

    East New York is one of the poorest corners of the city, and for many years it was one of its most violent neighborhoods. Little of Brooklyn’s building boom has reached Pitkin or Pennsylvania Avenues. But with mostly one- and two-family homes along with some public housing projects, and with its strong access to public transit, East New York is likely to be among the city’s new frontiers for more residential development under the mayor’s 10-year plan.

    As the administration begins more than a dozen studies to identify neighborhoods that could accommodate more buildings, it must persuade New Yorkers to embrace more density. Residential neighborhoods often oppose anything that would encroach on existing views, or light, or strain schools and other municipal services. “There will be plenty of places where there’s going to be resistance to growth in any case,” said Brad Lander, a City Councilman from Park Slope and an ally of the mayor. Mr. Lander and other affordable housing advocates say that building support for the mayor’s plan is a matter of picking areas wisely and involving neighbors early in the planning.

    Ismene Speliotis, executive director of the Mutual Housing Association of New York, which develops, preserves and manages low- and moderate-income housing, said projects also need to offer tangential benefits to neighbors, and trade density for affordability fairly.

    “The two things that upset low-income people the most are that buildings go up and nobody they know is hired to build them, and nobody they know qualifies for a unit,” she said.

    Members of the administration have told affordable housing developers and advocates that they believe they can assuage residents’ concerns in part by identifying what neighborhoods need in order to handle more density, like more schools or additional transit options, and by meeting those needs as part of any rezoning process.

    Martin Dunn, a developer of affordable housing, said that the administration had asked affordable housing developers to come up with broad ideas about how to improve poor neighborhoods. “Just building housing isn’t enough,” he said. “Where are people going to shop? Where are they getting their services?”

    Alicia Glen, the deputy mayor for housing and economic development, said in an interview that the administration’s evolving plan to require developers to build affordable housing in newly rezoned areas would be tailored to individual neighborhoods and to what each real estate market can bear. The proportion of affordable units will change from area to area, so as not to discourage building in weaker markets, and the size and height of new buildings will too, she said.

    “We’re not talking 30- or 40-story buildings in the middle of a neighborhood where everything else is two or three stories,” she said. “That’s not what this is about.”

    Yet resistance is all but certain in many neighborhoods as the city opens them to new development.

    Katia Kelly, a blogger who lives near the Gowanus Canal in Brooklyn, watches the neighborhood’s old warehouses and silos being torn down to make way for a 700-unit apartment building, and frets about the loss of the neighborhood’s industrial character and the likely strain on schools, subways and sewers from an influx of new residents.

    That the new building along the canal will include some 140 apartments for low- and moderate-income residents does not soften her view that the city puts the interests of developers over those of residents.

    “It’s, ‘The developers want to build — let’s tack on a couple of apartments here that are affordable,’ ” she said.

    But Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development, a coalition of community groups, noted that the bottom line is that the city’s population is growing and needs to make room for more residents.

    “We have new people coming in, and unless we build, we’re not going to have the affordable housing we need,” he said. “It’s about getting the right balance.”

    The voices for growth that ensures affordability are loud elsewhere in Brooklyn. At the news conference where the mayor announced his housing plan Monday, the audience erupted when Borough President Eric Adams exhorted: “Build, Baby, build.”

    “No more nights of sleeping,” Mr. Adams said. “The jackhammer should be heard throughout this entire city.”

    Carl Weisbrod, chairman of the City Planning Commission, has singled out East New York as a neighborhood primed for new development. It is transit rich, with subway and Long Island Rail Road stops, he said. And for the past two years, resident groups have already been in talks with city planners about how to attract more affordable housing, retail development and jobs.

    The mayor’s housing plan specifically mentions Atlantic Avenue, a broad boulevard, as well as Pitkin Avenue and Fulton Street, as areas that can support new housing, shopping and services.

    Michelle Neugebauer, the executive director of the Cypress Hills Local Development Corporation, which has been working with the city planners on East New York, warned that new units in the neighborhood would have to be affordable to people who make only a fraction of the area’s median income. Many find themselves earning 30 percent to 70 percent of that, with annual household incomes as low as about $25,000 for a family of four.

    Over 56 percent of the households in the area are “rent burdened,” meaning that they pay more for rent and utilities than they can comfortably afford, according to figures from the Furman Center for Real Estate and Urban Policy at New York University.

    Everybody seems to know somebody who is paying too much in rent, or living in a cramped, illegally subdivided basement apartment in one of East New York’s houses. Jessica Santana, 30, said some acquaintances had been forced into the shelter system because they could no longer afford rent.

    Additional affordable housing in East New York would change lives, she said. “Everybody could get out of illegal apartments and have a place to live.”

  14. #14
    Build the Tower Verre antinimby's Avatar
    Join Date
    Sep 2004
    in Limbo


    I like Eric Adams. Hope he runs for Mayor in the future.

  15. #15
    Forum Veteran
    Join Date
    Feb 2008
    New York City


    Quote Originally Posted by Merry View Post
    New York City Mayor Bill de Blasio unveils $41 billion housing plan.
    I'm curious to know how he expects to change the rules on landlords who have been biding their time to charge market rates. You can't change the goal posts mid game, and what possible "incentives" would mitigate that loss of revenue

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