As a senior vice president of residential and commercial development at Forest City Ratner, the Harvard College and Harvard Business School grad and Upper East Side resident has been involved in every aspect of the $4.9 billion Atlantic Yards project since its inception 10 years ago. "I was knocking on doors, telling people I'd like to speak to them about purchasing their property," she recalled. "I was trying to acquire the New Jersey Nets basketball team and purchase air rights from the Long Island Rail Road." Now Ms. Burch is heading the project to build the first residential building on the site, a 32-story tower that will feature the tallest modular building ever constructed. "We think this is going to launch a new industry in New York," she said of the modular system. ..."A lot of what a developer does is solve problems," said MaryAnne Gilmartin, the executive vice president of Forest City Ratner who has been tapped to replace Bruce Ratner as CEO. "You have to feel comfortable with that constantly changing dynamic, and Melissa's adeptness and comfort with change makes her such an asset to the organization."
Solving problems
How exactly does Burch solve problems? As I reported for City Limits' Brooklyn Bureau 8/26/12, in Agency, Developer Wrestle Over Atlantic Yards Affordability, the New York City Housing Development Corporation [HDC] wanted Forest City to increase the number of two-bedroom affordable housing units:
HDC apparently asked the developer to alter the mix of affordable units by shifting 15 of the proposed one-bedrooms to two-bedrooms, and gearing these for families in the 120 percent and 150 percent AMI bands. That proposal, skewed toward middle-income subsidized units, was unacceptable to the devel-oper. Forest City's Melissa Burch offered a counterproposal: "We want to find common ground that gives HDC the 20 percent 2BRs that are important for your mission and at the same time helps close the $2M funding gap” created by the reassignment of 15 one-bedroom units to two-bedroom units. To save $1 million of that stated “funding gap,’ Forest City asked that the 15 larger units be allocated solely to the higher 150 percent AMI band. HDC seemed to take the deal. "We of course prefer more affordability," Tally responded to Burch, "but we will accept it. We'd like your commitment that this will be the minimum level of affordability [for this tower] no matter how future conditions may affect the budget." In response to questions about the negotiations, HDC stresses that the specifics of the Tower 2 deal are still in flux. To that end, the income mix has shifted since the last email exchange contained in the documents City Limits obtained: HDC now says that of the 15 additional two-bedroom units, two will be for middle- and moderate income families below the 150 percent band, while a 16th unit will serve low-income families.
What does "close the $2M funding gap" mean? It means "save us $2 million in costs."
A major affordable housing advocacy group has just confirmed a citywide problem that Atlantic Yards critics have long identified: promised "affordable housing" would be unaffordable for most locals.
The organization proposes a tool to evaluate "real affordability," a measure that should raise questions about numerous promised "affordable housing" projects, including Atlantic Yards.
To recap: a major selling point for Atlantic Yards has been the promises of "affordable housing": 2,250 subsidized rental units among 6,430 overall apartments.
Or, as indicated in a promotional flyer produced by Forest City Ratner in 2006 before the project was trimmed slightly: "over 6,800 units of badly needed mixed-income housing for Brooklyn." The headline: "Atlantic Yards" Helping Solve Brooklyn's Housing Crisis."
But it wouldn't solve much.
As I wrote in 2006, when the proposed total was 6,860 units, 84% would go to households that earn more than the neighborhood's median income. Then the Council of Brooklyn Neighborhoods prepared a chart (left), comparing the household income distribution in the Atlantic Yards plan with the distribution in the 3/4-mile area around it.
As the chart indicated, 50% of the residents in that area had an income at or below $35,450--which was then 50% of Area Median Income (AMI)--while only 13% of the Atlantic Yards households would fit in those categories.
Since 2006, those numbers have changed. The AMI, which also factors in affluent suburban counties, has continued to grow. Meanwhile, the income in the 3/4-mile area has surely gone up. (I can't evaluate whether that has decreased or increased the mismatch, but surely the mismatch remains significant.)
The ANHD's members include non-profit organizations on both sides of the Atlantic Yards debate like Mutual Housing Association of New York (ACORN's successor) and the Fifth Avenue Committee and Pratt Area Community Council. Perhaps because of the delicate diplomacy involved, the report does not mention Atlantic Yards.
The key finding is that sheer numbers--a goal of 165,000 units created or preserved--mask a troubling reality:
Mayor Bloomberg’s New Housing Marketplace (NHMP) affordable housing development plan is an impressive achievement that took great strides towards creating affordable housing opportunities for residents....Yet despite the thousands of housing units created and the multibillion dollar investment, many City residents and housing advocates believe that the Bloomberg housing production plan was implemented with significant flaws... not in the number of units created... While the City has committed to and developed a significant number of affordable housing units under the Bloomberg administration, about two-thirds of New Housing Marketplace units are too expensive for the majority of local neighborhood residents.
Rhetoric about "affordable housing" deserves to be dissected, according to the report:
There is a clear need for more housing options throughout the City, across all income levels. However if these options aren’t affordable, the “affordable housing” is simply “housing.” The City should not use taxpayer subsidies to build housing unaffordable to the local community – indeed unaffordable to the majority of New Yorkers overall – and then call it “affordable housing.”
Eric Bederman, a spokesman for the Department of Housing Preservation and Development, said the report “oversimplifies the issues” by looking only at income and unit sizes to determine the city’s housing needs, while the department also considered factors like whether people were paying too much of their income to rent. For instance, he said, census data showed that nearly two-thirds of low-income households that did not qualify for public housing or other subsidies paid more than 30 percent of their income to rent.
That's a bit confusing: is the city arguing that, because it's still hard for middle-class people to find affordable housing, it's fine to focus on programs that serve the latter population, even if such programs don't necessarily serve the neighborhood?
Changes outpace policy?
It may be that the administration is faced with a city that is shifting fast.
In City Limits, Jarrett Murphy wroteA Housing Problem … Or an Income Problem?, noting that "from fiscal year 2004 through fiscal year 2011, 82.9 percent of units produced under the mayor's plan served households making less than 80% percent of [AMI]," which was more than the initial goal of 68%.
So if unaffordability outpaces policy, what's going on? Murphy cites the rising AMI and the challenge of making housing numbers work--as with the Atlantic Yards negotiations for higher-income subsidized units--but says it's ultimately it relates to jobs:
Both the flaws in AMI and the math challenge underlying all affordable housing point to an underlying issue: The housing crunch in New York is as much an income problem as it is a housing problem. In the past six years median income for a family of four in the city has increased 8.7 percent, while the inflation rate for housing has run about 16.7 percent
From the ANHD report
Below, a summary of the problems: not only are the units too expensive for most locals, they're concentrated in relatively few places, and they're not permanent.
The solutions
Not only should units be more affordable to locals and permanent, according to ANHD, they should be distributed in more neighborhoods, include a variety of sizes, and add community facilities.
AY reflections: location
Though Atlantic Yards would be too expensive for most locals, in one way it does respond to the policy prescription, by adding subsidized units in districts that lack them.
For example, the chart at left indicates that, while Community Board 2 in Brooklyn has 9.7% of the borough's subsidized units in the New Housing Marketplace Plan, CB6 has 1.2%, and CB8 has 4.9%.
So Atlantic Yards, at least if the units are delivered rapidly rather than over the 25 years allowed, could help balance the share in those three districts better.
The impact, according to the map below, would be greatest in middle-income Community District 6 (the only district in white in the central-west portion of Brooklyn in the map below), which has a small pice of the Atlantic Yards site.
The report states:
This lack of low income housing in our wealthiest neighborhoods illustrates a mismatch– while the City often builds housing targeting households with incomes higher than what is average for a neighborhood, the City rarely builds housing geared towards incomes below what is typical for neighborhood residents. In fact, only 2.9% of low and moderate-income housing (120% AMI and below) was built in middle and upper-income neighborhoods (120% AMI and above).
AY reflections: apartment size
Atlantic Yards would fare less well, however, under another index of evaluation: unit size. Only 20% of the subsidized apartments in the first tower would be 2-bedroom units, with 80% of the subsidized units studios or 1-bedroom units. (The announced goal, according to a Memorandum of Understanding signed with ACORN, was 50% of the units, in floor area, devoted to 2- and 3-bedroom units.) This could change, of course, as Forest City lowers its costs with modular construction.
By contrast, according to the report, less than 38% of the subsidized units citywide between FY 2004 and FY 2010 were smaller units.
AY reflections: subsidy policy
The report does validate criticism of city policy by ex-ACORN officials, who pointed out that city policy, which assigns subsidy by unit rather than by number of bedrooms, advantages smaller units. (On the other hand, they knew that when Atlantic Yards was proposed.)
The report states:
This uniform subsidy regardless of unit size is an unnecessary impediment to building larger unit sizes. In the future, the City must take a more nuanced approach to constructing affordable housing, in this case taking into account that different size households have different affordability needs and different unit sizes require different subsidy levels.
Why is AMI so high?
The report cites three facts that skew HUD AMIs higher than actual median incomes for New York City, including not only wealthier suburban counties, but also a “high housing cost” adjuster that "artificially raised the AMI by 26.1% in 2010" and the policy of using a multiplier to estimate the incomes for households that are larger or smaller than the four-person statistical base.
However, while HUD suggests that a single-person household should make 70% of the four-person household, in reality, the figure is 49%.
This leads to some anomalous results:
For example, the HUD calculated median income for a family of four in New York in 2010 was $79,200. Yet, the actual median income for a 4-person household in New York City was only $62,799, over 20% lower.
Note that median income in Brooklyn is only 62% of overall AMI, which indicates a significant mismatch between affordability to locals and to the region. This mismatch was hardly acknowledged by ACORN, which brought mainly low-income followers to testify in favor of Atlantic Yards, with little recognition that only 900 of 2,250 units--would be at 50% of AMI or below.
Recommendations: deeper affordability
Note that the focus on deeper affordability, recommending more units below 40% of AMI. In the first Atlantic Yards tower, only 11 of 181 subsidized units would be between 30-40% of AMI.
Recommendations: make it permanent
The report recommends that any new project that uses city-owned land be affordable for 30 years. A good part of Atlantic Yards would be on formerly city- and state-owned land, while the city reimbursed Forest City Ratner for $131 million of land purchases.
However, according to the Community Benefits Agreement, the affordability would last 30 years--though that would be mitigated by rent stabilization, which caps rent increases.
Recommendation: nonprofit organization + local impacts
The report recommends using "responsible, local not-for profit developers with community based boards," because they can better reflect the neighborhood--a process obviously bypassed with Atlantic Yards. (This recommendation also appears in an ANHD policy brief.)
For-profit developers like Forest City Ratner have more capacity--but they also negotiate relentlessly to meet "required return hurdles"--profits demanded by their boards.
And while Atlantic Yards would have space for a health care facility and open space, evidence suggests the capacity would go mainly to the new residents.
Moving toward Real Affordability
As the graphic below indicates, Real Affordability factors in the local AMI, the length of term, and the impact of ancillary facilities.
No one's plugged the numbers in regarding Atlantic Yards. As my analysis above indicates, the project would get some credit for bringing some low-income units to (a tiny piece) of a middle-income neighborhood.
But the skewing of subsidizes toward middle-income units--a skewing that seems up for negotiation with each building--would decrease the credit.
Brooklyn Transitions from Affordable Manhattan Alternative to Destination
Multifamily sales are expected to continue to show strengths and we expect volume to increase in 2013 as institutional owners and large portfolio owners try to take advantage of the low yield expectation and bring large portfolios to market before the low interest rate environment changes. Brooklyn’s strong market fundamentals mean residential rents in core and transitional neighborhoods will continue to increase aggressively as more residents call Brooklyn their home. To these new residents, Brooklyn is no longer a more affordable alternative to Manhattan, it’s a destination. This upside opportunity will attract investors that so far concentrated their efforts on Manhattan to buy multifamily buildings in Brooklyn.
This should make developers of the first Atlantic Yards residential building more optimistic about aggressive rents, at least if they can fix that noise-leaking arena.
Atlantic Yards was the subject of some scornful comments in the first mayoral debate, held last night at St. Paul Community Baptist Church in East New York, and while the episode hardly made event coverage, it did spark on Twitter.
“It’s great that we have a new basketball arena ... but I haven’t seen one new unit of affordable housing,” [publisher Tom] Allon said, referring to the new Barclays Center in Brooklyn. “We can’t say the basketball court comes first. Housing has to come first.”
“We’ve got popcorn vendors and no apartments,” [Comptroller John] Liu added, to wild applause.
The event, sponsored by Metro Industrial Areas Foundation and the Daily News, drew more than 1,000 people, presumably mostly from the working-class church constituency.
I suspect that part-time jobs in the arena, however welcome they are to people out of work or able to rely on others for housing, are not seen as legitimate careers.
Housing pace, and nature
According to one eyewitness, the boos began as soon as the arena was mentioned. I suspect it's because the audience knows that the arena has come first. (The first tower is targeted for mid-2014.)
That said, the candidates did not score points for subtlety. As noted by Pete Nagy of New York Communities for Change (a backer of the housing, as successor to ACORN), the first building has already broken ground. And, as I noted, it's supposed to have 50% subsidized units.
That said, the more subtle criticism, as I pointed out on Twitter, is that the first building will not come close to the promise of 50% of affordable space devoted to two- and three-bedroom units.
In other words, however much the building is "affordable"--and a good number of the moderate- and middle-income units would be too expensive to many seeking "affordable housing"--it will mainly serve singles and couples.
Also, as noted (below) by Prospect Heights activist Gib Veconi, the potential 25-year buildout means the housing would have less impact on the neighborhood.
On Twitter
The issue of timing and cost
In an essay yesterday on Prospect Heights Patch headlined Why Affordability Matters at Atlantic Yards, Veconi wrote that the of the "180 'affordable' apartments [in the first tower], only nine will be suitable for families earning the median income for Brooklyn or below."
He suggested that the tower may be more costly than other affordable housing, given a $560/square foot cost, compared to $300/sf for other developers.
I think there's evidence the building is more expensive, but I'm not sure that's an apples-to-apples comparison. First, the comparison buildings are surely not high-rise, nor at such a tricky site location. Second, the $180 million cost includes $34 million for land, so the cost per square foot comes down nearly 20%. [Update: Veconi points out that the $300/sf cost includes land. Still, land costs vary around the city/borough.]
Veconi writes that it seems to be a trend:
“HDC financing was designed at a time when there was more City-owned land available for affordable housing,” one non-profit developer explained to me. With little available public land in Brooklyn, new affordable housing will increasingly have come as a portion of the units in high-rise developments built on private land. These projects are much more costly to build, and their developers are happy to leverage existing subsidy programs as they assemble financing. The result is that the apartments created will tend to reinforce current trends of displacement, not counter them.
The upshot, he suggests, is not merely more subsidies but a real competitive bidding process, one that could be fostered by the alternatives study required by the Supplemental Environmental Impact Statement (SEIS).
That could happen, though I suspect the SEIS will report that Forest City's modular plan has the best chance to deliver the 2,250 units in a timely manner--in other words, the innovation would trump the capacity to have faster development by having sites bid out to other developers.
Housing trumps all?
Housing is important, but it should be seen as part of a larger picture. As I wrote last October, it's timely to revisit Ron Shiffman's 6/3/06 essay for DDDB, Atlantic Yards: Staving Off a Scar for Decades:
While this area along the Atlantic Avenue corridor could accommodate higher densities, density is a relative term. The density proposed by Forest City Ratner far exceeds the carrying capacity of the area’s physical, social, cultural, and educational infrastructure. The Atlantic Yards density is extreme and the heights of the proposed buildings totally unacceptable. ...A private developer shouldn’t be allowed to drive the disposition of publicly owned or controlled land without a participatory planning process setting the conditions for the disposition of that land.
Yesterday morning featured yet another well-produced Atlantic Yards press event--not a press conference with questions and dialogue, but a for-the-cameras parade of speakers, inside a tent near the corner of Flatbush Avenue and Dean Street, with a rectangular metal modular chassis--not yet filled with the components of an apartment--in the background.
Public officials and Atlantic Yards developers/backers all saluted Forest City Ratner's plans for 32-story, 363-unit B2, the tallest modular tower in the world and the fulfillment--so they said--of ambitious plans for affordable housing.
Well, modular housing--assuming Forest City pulls it off--would indeed be innovative, lowering construction costs and impacts, and potentially leading to a new industry and new jobs, changing "the way cities are built," according to Mayor Mike Bloomberg.
Unclear, of course, is whether much if any of the savings would be passed on to the consumer. After all, Forest City Ratner executive MaryAnne Gilmartin told investment analysts last month: "We believe if we go modular, it would be invisible to the consumer. This building should perform at the level of finish, fit and feel commensurate with a conventional building, so it is priced accordingly."
News outlets including The Atlantic Cities (describing the modules as "14 feet wide, 35 feet long and 10 feet tall"), NY1, and the New York Observer focused on the modular angle. (Documents, including press release and fact sheet, at bottom.) No one--nor this blog, in earlier version--mentioned that the tower was long delayed; in fact, Gilmartin in September 2010 predicted starting in the spring of 2011.
Photo by Matt Chaban/NY Observer
Promises kept?
Speakers talked up the 2,250 "affordable" units, with the first 181 coming in the summer of 2014 when this building is expected to open.
The other two apartment towers in the arena block should start in a sequence six to nine months after the previous tower, but there's no plan yet for the flagship office tower, slated to deliver a good chunk of expected Atlantic Yards revenues.
“This is a promise made and a promise kept, the beginning of the most progressive affordable housing program in our city’s and country’s history," asserted Bertha Lewis, who helped negotiate the affordable housing Memorandum of Understanding (MOU) in 2005 as head of New York ACORN. (That MOU required ACORN to publicly support the project, and Forest City later bailed out national ACORN with a $1.5 million grant/loan.)
Actually, the promise of subsidized units may be met, but not the configuration promised. Speakers, of course, didn't mention the 2,250 market-rate units, or that fact that, as several civic groups pointed out, the subsidized housing wouldn't many Brooklynites who had hopes for the project.
“It’s not just that Brooklyn isn’t getting the affordable housing it was promised and is woefully needed,” said Michelle de la Uz, Executive Director of the Fifth Avenue Committee. “By using up the available subsidies to finance smaller apartments for tenants in higher income brackets, FCRC is making it harder to build truly affordable units elsewhere in the City.”
In a sign of broader interest, if not support, from elected officials, those attending, as mentioned from the dais, included not only public supporters like Rep. Yvette Clarke and Council Member Dominic Recchia, but also Council Members Mathieu Eugene and Jumaane Williams, both (I think) supporters, and indicted Assemblyman William Boyland, whose sister Tracy ran against AY opponent Sen. Velmanette Montgomery.
Also, Assemblymember Joan Millman, a sometime critic of Atlantic Yards, attended, as did more forceful critic Council Member Brad Lander and longtime opponent Council Member Letitia James--both, apparently, wanting to know about affordable housing, at least.
Borough President Marty Markowitz was both ebullient and feisty, at one point stating sarcastically, "I see some folks who weren't able to make the groundbreaking of the Barclays Center. Some of you weren't able to make the ribbon-cutting... I want to say how thrilled I am you're here today." He didn't mention anybody by name, but I suspect he meant James and Lander.
Markowitz said he was thrilled by the economic development brought by big spenders coming to arena events, and jabbed back at those concerned about Barclays Center impacts: "By the way, the world didn't end. Atlantic Avenue is still there... Some would argue that the traffic is moving faster on Flatbush Avenue."
"Bottom line, what's good for Atlantic Yards is good for Brooklyn," Markowitz declared. (Wow.)
Complication: affordable housing
Unmentioned were the complications in the narrative. Yes, Forest City plans a building with 50% subsidized housing. However, despite the statement by Lewis that promises were fulfilled, those 181 affordable units, all studios and one-bedrooms except for 36 two-bedrooms, hardly match the promise of 50% of units (in square footage) devoted to two- and three-bedroom apartments.
"Our commitment to the housing at Atlantic Yards never waned," declared Forest City Ratner Executive VP MaryAnne Gilmartin. "Nor did our commitment to the affordable housing. The new economic landscape, post-2008, however, created unprecedented challenges."
Her boss later seconded that. "What is most important, and what I care most about, is that it is affordable," Bruce Ratner declared. But of course the commitment to affordable housing did wane.
The 36 two-bedroom subsidized units, as I've reported, would not be distributed evenly across the five affordable income "bands," but would have only nine (instead of 14+) units for low-income households and 17 (instead of 7+) units for the highest middle-income band, with households earning well over six figures.
After the event, I asked HPD Commissioner Mathew Wambua about whether he expected Forest City would meet the pledge to build 50% of the affordable units as larger units. "I would talk to them about that," he said. "Certainly, I would support as diverse a unit mix as possible."
Can public officials enforce the pledge? "It's something we can be part of the dialogue about," Wambua responded. Note that city agencies did get Forest City to build more two-bedroom subsidized units than the developer initially wanted, but the number's still far less than the pledge.
Complication: union jobs
The challenges were solved, according to Gilmartin, via a new way to build, achieving world-class design, with greater efficiency and sustainability, with safer work conditions and lowered community impacts.
Who helped Forest City "crack the code"? Gilmartin cited SHoP, Arup, and Forest City colleagues, and then saluted new partner Skanska, which has joined with Forest City to establish a factory at the Brooklyn Navy Yard. (Unmentioned: partner XSite, whose partnership with Forest City was the subject of a bitter lawsuit.)
"One thing hasn't changed, and that's union labor, which will build this building, like all Forest City building," Gilmartin. In the spring, some 125 union workers will be working in the factory, along with 25 non-union workers.
It's been reported that workers in the factory will earn some 25% less than on-site workers, but Forest City claims that there will be the same number of work hours. There was no proof of that offered, and my back-of-the-envelope calculations suggest the number will go down.
Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York City, explained, "We saw without that modular construction that these projects would more than likely not go forward. And we too in the building trades have a sense of community, a commitment to the community, and were equally concerned about affordable housing."
But if Forest City Ratner reneged on the affordable housing it would have to pay penalties and lose development rights, so the unions had more power than LaBarbera acknowledged, especially since Forest City needed union approval to proceed.
Also, the overall tax revenues from construction labor, given the lowered compensation and (likely) fewer numbers, should lower revenue estimates.
Bloomberg and his joke
"Atlantic Yards has already brought a huge boon to Brooklyn," said a lighthearted Mike Bloomberg, who later joked that he might qualify for the affordable housing when the tower opens in mid-2014.
Actually, he didn't say the rapid pace of construction at Atlantic Yards defied all expectations--after all, the groundbreaking for the first tower has been put off again and again. Rather, his "ahead of schedule" comment referred to his administration's overall goals for affordable housing. See video at 8:28.
Bruce Ratner
Bruce Ratner was proud, and a bit defensive. "It was said that we would build the Barclays Center and walk away," Ratner said. Not sure how many said that; after all, Ratner's profits also relate to the "entitlement" to build.
He offered effusive thanks to ACORN, Mutual Housing of New York, New York Communities for Change, and members of the Atlantic Yards Community Benefits Agreement (CBA).
Numerous backers of Atlantic Yards housing were in the room--some who testified at public hearings--and at least four CBA partners were there, besides Lewis: James Caldwell of the now-defunct BUILD; Charlene Nimmons of Public Housing Communities; Len Britton of the NY Association of Minority Contractors; and Joe Coello of Brooklyn Voices for Children.
"Bertha Lewis is our partner, and she is my friend," Ratner said. "How did I meet Bertha? She protested me, for weeks and weeks and weeks. And finally I said to my quote-handlers, 'Bring her up.'
"Like all marriages, we've had our ups and downs," he said, "but it's a wonderful marriage."
Bertha Lewis
Lewis took the stage to applause from a good number of followers in the audience.
"This project has been a long time in coming. I feel like I've been pregnant for eight years. And finally we're gonna burst this baby. And I got 14 more to go," the theatrical Lewis said, adding sardonically, "So, thanks for knocking me up, Bruce."
She said New York ACORN, "when we first heard about this project, we didn't really know... much about it," so "we polled our members... and, across the board, our members said, 'housing, housing. And if you remember, the original proposition here was to be all luxury housing."
However, when members were polled, they were not asked about affordable housing accessible to those in their income bracket. And the plan announced at the 12/10/03 public launch was to include affordable housing.
So it's difficult to understand what she meant by "the original proposition." In a 10/27/03 article, before Atlantic Yards was officially unveiled, New York Magazine reported:
Adjacent to a new arena, Ratner plans to build a $2 billion, 21-acre development featuring both retail and office space and some 5,500 units of housing, which he says will come in various-size buildings and serve various income levels.
According to John Atlas's sympathetic book on ACORN, Seeds of Change, ACORN surveyed its members in November and December of 2003 and came up with a plan by January 2004, though the Housing MOU wasn't signed until May 2005:
Soon after the November 2003 election, Lewis began meeting with Jon Kest, sixteens neighborhood leaders... Ismane [sic; actually Ismene] Speliotis, the Director of New York ACORN Housing Corporation... They consulted with city planners, reviewed the city's housing data.... During November and December, the ACORN staff brought the issue to the membership... By January 2004, ACORN's housing expert, Ismane Speliotis, had come up with a plan...
Yesterday, Lewis emotionally saluted longtime ally Jon Kest, executive director of NYCC, who died recently, for the work he did helping establish the housing plan.
A Q&A with Skanska
Curbed published a Q&A with Skanska executive John Dolan, who said:
I think it's better for the industry that we find strategies to build elements and entire projects offsite to minimize the amount of construction that occurs on the work site. The Atlantic Yards site is very difficult to navigate around. We're reducing the amount of activity. There will be fewer trucks.
First, the official press release, then the 19-page fact sheet, which includes renderings. Then a press release, via BrooklynSpeaks, from several groups opposing or critical of Atlantic Yards.
Community Organizations Call On the State to Make Good on Promised Housing
BROOKLYN, NY— Following the groundbreaking for the first residential tower at its Atlantic Yards project, community organizations expressed outrage over Forest City Ratner Companies’ (FCRC) intention to use New York City Housing Development Corporation bonds to subsidize apartments too small for working families, and too expensive for the majority of Brooklynites.
The plans for B2, as the first residential building is known, include 363 apartments, approximately half of which are described as “affordable.” However, of the “affordable” apartments, only 35 are two-bedroom units suitable for families, and only 9 of those are intended to be affordable to families earning the median income for Brooklyn which is just over $43,000 for a family of four. More than half of the two-bedroom “affordable” apartments are intended to be marketed to families earning more than $100,000 annually.
“Atlantic Yards was approved because FCRC promised Brooklyn 2,250 affordable apartments,” said Daniel Goldstein of Develop Don’t Destroy Brooklyn. “It’s outrageous that Governor Cuomo and Mayor Bloomberg would now allow this developer to use loopholes in regulations to build luxury apartments with help of affordable housing subsidies.”
“It’s not just that Brooklyn isn’t getting the affordable housing it was promised and is woefully needed,” said Michelle de la Uz, Executive Director of the Fifth Avenue Committee. “By using up the available subsidies to finance smaller apartments for tenants in higher income brackets, FCRC is making it harder to build truly affordable units elsewhere in the City.”
“Although any affordable units of housing are welcomed in Brooklyn, there is data that suggest that state and federal subsidies could go further in providing more housing for low and middle income working families. Many of the studio and one-bedroom apartments will not accommodate families,” said Reverend Clinton Miller of Brown Memorial Baptist Church. “Many of the studio and one-bedroom apartments will not accommodate families. New York State must be more efficient at getting more affordable housing for people who need it most. In the meantime, valuable government resources will be wasted on helping developers build luxury apartments.”
In 2009, FCRC and the Empire State Development Corporation (ESDC) renegotiated the Atlantic Yards plan, pushing out construction of the project from ten to twenty-five years. In July of 2011, the New York State Supreme Court ruled that the change was approved illegally, and ordered ESDC to revisit the plan after additional environmental analysis. Although all of its appeals were exhausted in June of 2012, ESDC and FCRC have yet to comply with the order.
“The B2 plans are yet another sign that the commitments made to win approval of the Atlantic Yards project simply aren’t going to be kept under the current plan,” said Gib Veconi of BrooklynSpeaks. “The State needs to follow the court’s order, and create a new plan for Atlantic Yards that includes additional developers and transparent project governance to ensure Brooklyn gets the housing it was promised when it was promised.”
Added FUREE’s Maisha Morales, “At Atlantic Yards, as with many other luxury-dominated development sites in downtown Brooklyn, the public is being robbed by developers with inside tracks to government. Their publicly-subsidized projects promise economic development, then displace working people, hurt small business owners, and further divide our neighborhoods. Our communities need real affordable housing, good jobs and a seat at the table in shaping the area's future. The failure of the Governor, the Mayor and our elected officials to hold developers accountable has been a disaster for the people of Brooklyn and New York State, and the plans presented for B2 are the latest example of why policies must change.”
###
About BrooklynSpeaks:BrooklynSpeaks is an initiative, launched in September 2006, consisting of civic associations, community-based organizations and advocacy groups concerned about the future of development at the Atlantic Yards site. For more info: www.brooklynspeaks.net
About Brown Community Development Corporation: Brown Community Development Corporation is an organization based in Central Brooklyn of congregants and local leaders committed to Social and Economic Justice. Through community organizing and service delivery we work towards a community that has the ability to eliminate inequities in education, housing, wellness and economic opportunities. In faith, with action and through service.
About Develop Don’t Destroy Brooklyn: Develop Don't Destroy Brooklyn, a 501c3 non-profit, leads a broad-based community coalition fighting for development that will unite our communities instead of dividing and destroying them. DDDB has led the opposition to Atlantic Yards and advocated for a community based development plan at the Atlantic Yards site since its founding in 2004. More info at: dddb.net.
About FUREE: Families United for Racial and Economic Equality (FUREE) is a Brooklyn-based multiracial organization made up and led mostly by women of color. We organize low-income families to build power to change the system so that all people's work is valued and all of us have the right and economic means to decide and live out our own destinies. More info at furee.org.
About Fifth Avenue Committee, Inc.(FAC): Fifth Avenue Committee is a 34 year old award winning community organization in South Brooklyn that advances economic and social justice by building vibrant, diverse communities where residents have genuine opportunities to achieve their goals, as well as the power to shape the community’s future. To achieve our mission, FAC develops and manages affordable housing and community facilities, creates economic opportunities and ensures access to economic stability, organizes residents and workers, offers student-centered adult education, and combats displacement cause by gentrification. More info at www.fifthave.org
Tomorrow, at a press conference, a host of people will celebrate the groundbreaking for the first tower at Atlantic Yards--a 32-story, 363-unit B2, which should be the world's tallest modular building.
Officials expected include Mayor Mike Bloomberg, Borough President Marty Markowitz, Forest City Ratner CEO Bruce Ratner, Forest City Enterprises CEO David LaRue, Building and Construction Trades Council of Greater New York President Gary LaBarbera, Skanska USA Building CEO William Flemming, and Bertha Lewis--the latter whose affiliation isn't billed, but who signed the May 2005 Affordable Housing Memorandum of Understanding (MOU) with Forest City as the leader of New York ACORN.
At the groundbreaking, Forest City will display one of the 930 modules used to create the apartments, "50 percent of which will be affordable," according to a press notice.
50 percent affordable
But what does 50 percent affordable mean, and how does that comport with initial promises?
As I reported in August for the Brooklyn Bureau, the housing MOU promised not only that 50 percent of the rentals would be affordable but that 50 percent of the latter, in square footage, would be devoted to two- and three-bedroom units.
At other points, Lewis and Forest City claimed not that half the affordable square footage, but that half the affordable units would be two- or three-bedroom.
Instead, as Forest City said in a recent presentation (excerpt above), 20% of affordable units will be two-bedroom units, with no three-bedroom units.
Why so few? Because the city offers subsidy per unit, not per bedroom, and it costs Forest City more to build larger units. Also, the city and Forest City's Community Benefits Agreement partners have pushed back only partially, accepting a deviation from the pledge. So, one lingering question: will Forest City fulfill the pledge in future towers?
Skew toward higher incomes
Also, as I reported in August, the two-bedroom units are not distributed evenly across the five affordable "bands," two of which are low-income, three moderate- and middle-income:
But Tower 2's skew toward higher incomes remains. Of the 36 subsidized two-bedroom units, nine would be occupied by low-income families, five would be set aside for renters of moderate-income, five for the first middle-income band and 17 would be subsidized for the highest affordable “band,” with monthly rents, of $2,740 today (plus electric), and surely higher when the building opens in a year or two. While that’s some discount off market—new two-bedroom, two-bath high-rise apartments in nearby downtown Brooklyn cost $3,300-plus—that's too much for “the missing class” of people just above poverty, as well as those below the line who rallied with ACORN for Atlantic Yards.
That configuration may have been tweaked--no one's said so--but, if so, likely not significantly.
So, another lingering question: In the future, will the larger apartments be distributed evenly?
The rough math suggests 250 workers over 18 months, assuming they work steadily, though that's not assured. If so, that's 375 job-years to build 363 units, plus the jobs associated with trucking and other support services.
That suggests fewer than 7,000 job-years (not counting trucking, etc.) to build the 6,430 apartments planned. (That doesn't count the unbuilt office tower.)
Still, Forest City said the number of man-hours to build the first tower will be approximately the same as conventional construction, but wouldn't answer a question about a similar calculation: the number of job-years involved.
Will construction match the 15,000 and 17,000 jobs (actually, job-years) once promised for the project? They should show us the math for both the original and current calculation.
Under the new agreement, Mr. La Barbera said union factory workers would earn $55,000 a year, 25 percent less than the average union construction worker. But, he said, the trade-off is that the factory worker will work steady hours throughout the year, regardless of the weather.
That still doesn't answer the question: does that mean the same amount of job-years for the project?
While Brooklynites were wondering about the 181 affordable housing units in the planned first Atlantic Yards, which begins construction later this month, on 11/28/12, a mayoral press release announced a new building nearby with 300 subsidized units, and far more larger units, though construction won't start until later next year.
Mayor Michael R. Bloomberg today announced three major milestones in the development of the last city-owned parcels in the Downtown Brooklyn Cultural District. First, the Gotham Organization and DT Salazar, Inc will develop 600 units of housing, 300 of which will be affordable, as well as new cultural, community and commercial space on a site bounded by Fulton Street, Rockwell Place and Ashland Place. Second, an ambitious, multi-faceted proposal by Two Trees Management Company to develop 50,000 square feet of new creative, cultural and community space, along with a dynamic new public plaza, has begun the public review and approval process. Finally, the City Department of Housing Preservation and Development released a Request for Proposals for the last development parcel in the district.
Where is all of this? The 600-unit building apparently will be at the wedge-shaped orange parcel below Fulton, marked North Tower 1.
The Two Trees project would be on the green parcel marked South Site, below Lafayette Avenue, and may extend to the triangle below, marked South Tower.
The last development parcel is catercorner to the Brooklyn Academy of Music (BAM). at Lafayette and Ashland, and next to the Mark Morris Dance Center.
The City has been committed to bringing much-needed affordable housing to the neighborhood as it has continued to grow. HPD has finalized plans with developers The Gotham Organization Inc. and DT Salazar, Inc. to build 600 units of new housing, 50 percent of which will be affordable to low- , moderate- , and middle-income New Yorkers. This commitment of approximately 300 affordable units doubled the amount of affordable housing originally projected for Cultural District Site I and exceeds the City’s plan for the entire north block. In addition, 40 percent of these affordable units will be two-bedrooms. The building will be designed to complement the cultural district and will help enliven the district by adding foot traffic to the Arts Plaza and locating active retail uses along Fulton Street. When completed, the approximately 515,000-square-foot building will also contain 20,000-square-feet of cultural and related office space and 20,000-square-feet of retail space HPD and the NYC Housing Development Corporation (HDC) expect to close on financing with the development team late next year and to see construction begin shortly thereafter.
That's apparently the same ratio in terms of units and distribution as B2 in the Atlantic Yards project, a 340,000 square foot building, except in the latter, only 20% of affordable units would be two bedrooms, not 40%. The difference: 36 units vs. 120 two-bedroom units.
The city first sought developers to build on a city-owned parking lot at Fulton Street, Rockwell Place and Ashland Place in 2007, but the economic crash slowed progress. "In 2008, 2009, 2010 things weren't happening. Luckily the market's come back," said Melissa Pianko, executive vice president for development of Gotham Organization, which together with DT Salazar Inc. is building the tower. The site also took time to design because it was an opportunity to create community and open space, as Downtown Brooklyn has developed as a thriving residential neighborhood, but is still struggling to create appealing retail and green space and a cohesive neighborhood feel. ...Downtown Brooklyn is slated for several large, primarily rental towers, including a 590-foot-high building at 388 Bridge St. by Stahl Real Estate and a 720-unit tower by the Steiner family at Schermerhorn and Flatbush avenues. But Ms. Pianko said she is confident there is demand to fill all those units. "We think it's an expanding market [that] can endure all the rental development that's planned there," she said.
On November 26, Two Trees, which agreed to purchase the district’s South Site parcel from the City’s Economic Development Corporation in 2009, began the City’s Uniform Land Use Review Procedure to gain approval to build a new mixed-use development on the Flatbush Avenue site. The approximately 47,000-square-foot lot, which is bounded by Flatbush Avenue, Lafayette Avenue and Ashland Place, is currently a parking lot owned and operated by EDC. Once the ULURP process is complete, and approvals have been granted, Two Trees can begin constructing a new state-of-the-art, 32-story mixed-use facility designed by Enrique Norten of Ten Arquitectos including approximately 50,000-square-feet of creative and cultural space that will be shared by BAM, 651 ARTS and the Brooklyn Public Library. In addition, the tower will include approximately 23,000-square-feet of ground-level retail, as well as approximately 300 to 400 apartments, 20 percent of which will be affordable.
This sounds like an 80/20 building, with 20% affordable housing for low-income households, in contrast with the 50/30/20 first tower, and the Atlantic Yards towers, which include moderate- and middle-income housing.
At right is a 2008 rendering of this tower from Ten Arquitectos.
It looks quite similar. The blurb:
The mixed use building will occupy the south portion of a triangular site at the intersection of Flatbush, Ashland, and Lafayette Avenues in downtown Brooklyn. Together with the grand plaza, located immediately to the north, the proposed building defines the gateway to BAM and the new cultural district. The tower is articulated as three volumes: a central circulation spine and two flanking volumes, where the apartments are located. The tower and the building base are unified by a continuous folding skin. The base of the building contains retail (at the southern tip); a movie theater complex, which will be an extension of the adjacent BAM facility; a branch library; gallery; and dance rehearsal spaces. The residential lobby is located off Ashland.
Note that this seems a cousin of the 2002 proposal, from the same architects, for a Visual and Per forming Arts Library at this site.
The plaza and arts
For the second building, the press release states:
Plans also include a 16,000-square-foot public plaza to provide desired open space for community residents, local artists and visitors. The plaza is designed to allow a variety of outdoor programming, including dance and theater performances, film presentations, open air markets and crafts fairs, and other community uses. “The growth of the Downtown Brooklyn Cultural District is another example of the City's commitment to improving and enhancing neighborhoods by increasing opportunities for arts and culture," said Cultural Affairs Commissioner Kate D. Levin. “The City supports dozens of cultural organizations in Fort Greene, and the South Site development is one more step toward creating affordable workspace for artists and arts groups, expanding public amenities, and making Downtown Brooklyn an even more vibrant destination for residents and audiences.”
The city will control 50,000-square-feet of cultural space and a portion of the public plaza, including 17,400-square-feet of space for the Brooklyn Academy of Music, and 16,500 square feet for a newBrooklyn Public Library branch, including "an innovative cultural partnership" with BAM.
It also will include a studio and rehearsal center of some 12,500 square feet, to be occupied by 651 ARTS, an acclaimed performing arts presenter dedicated to artists of the African Diaspora, and managed for use by local performing artists and arts organizations at affordable rates
The last parcel
According to the press release:
On Tuesday, HPD released a Request for Proposals (RFP) for Cultural District Site II, the last development parcel in the district. Located at the intersection of Ashland Place and Lafayette Avenue, Site II is the key remaining piece of the multi-site plan to bring affordable housing, new commercial space, and space for cultural activities to this growing community. The RFP calls for approximately 100,000-square-feet of floor area and may include residential, community and/or commercial space, with a requirement to include a minimum of 15,000-square-feet dedicated to cultural space and the arts. If affordable housing is proposed it must serve low-income New Yorkers. As this site is complimentary of the City’s overall plans to support the established and emerging arts organizations in the area, designs should reflect excellence and creativity in architecture and be a defining component of the heart of the Cultural District. Proposals must be submitted by February 1, 2013. For more information and to download the RFP, visit www.nyc.gov/hpd.
Spinning the rezoning
The press release states:
Downtown Brooklyn was rezoned in 2004 in part to help facilitate the growth of the new cultural district centered in the Fort Greene neighborhood and its legacy of cultural activity. Since then, the City has committed over $100 million in capital funding to further enliven an already vibrant neighborhood of arts organizations and support the development of the Downtown Brooklyn area as a whole. This includes the Mark Morris Dance Center, the James E. Davis 80 Arts Building, the newly opened BAM Fisher Building, the BRIC Arts | Media House and the UrbanGlass Renewal project currently in construction, and construction of a new home for Theatre for a New Audience which is also underway. In addition, after the rezoning other cultural, residential and commercial projects involving a cross-section of the surrounding community have been planned or built in Downtown Brooklyn. These new projects, along with other City investments, have improved the street-level experience in the district while serving to further integrate cultural organizations, residents and businesses in Downtown Brooklyn. “It's difficult to put into perspective how impactful today's announcement will be on the future of Downtown Brooklyn,” said Tucker Reed, the President of the Downtown Brooklyn Partnership. "Active uses on these vacant sites will provide critical connections between our commercial and residential assets and world class cultural and entertainment attractions, fostering a cohesive and attractive Downtown experience. These sites were a critical missing piece.”
OK, but the main reason for the rezoning was to facilitate new office space, which, it turned out, wasn't needed.
The summary headline on the Department of City Planning's Downtown Brooklyn plan: "NYC Jobs at Risk as Result of Lack of Affordable Office Space."
For a handful of Prospect Heights residents, moving into the first Atlantic Yards apartment building will be a homecoming of sorts. Seven years ago, 17 renters living in the footprint of the development site accepted a unique deal from Forest City Ratner. In return for moving, the tenants got apartments nearby at the same rent they were paying - covered by FCR. ...During the contentious takeover of the 22-acre site, 209 renters living in the area were offered the relocation agreement or a cash payment averaging $85,000, according to an FCR official.
I'm surprised at the ratio, and how few people will be moving in.
I suspect a good number either didn't think the project would be built or, as noted by one interviewee below, weren't given offers that fully protected them:
David Sheets, 51, stayed in his 479 Dean St. apartment until 2010 when he took a buyout and was forced to move. He never considered the relocation offer, noting that many were designed to expire after a few years. “I did not want them determining where I was going to live,” he said. “I wanted them out of my life. I didn't want to be on the same planet with these people let alone having them suggesting where or not I was living.”
"Critics... are questioning"
The article closes:
Half of the first building's 363 apartments will be subsidized with city affordable housing bonds. But critics of the project are questioning that setup, pointing out that 17 of those units will be set aside for renters earning between $104,580 and $119,520.
The issue isn't that 17 of the units would be set aside for such moderate-income families. It's that (likely) 17 of the 36 two-bedroom units would be set aside in this way, rather than being distributed evenly across the five affordable housing "bands."
I guess I'm one of the unnamed "critics," but not merely "critics" should be questioning this; project supporters and any outside observers familiar with the previous promises can legitimately raise questions.
So much for those consistent claims that Forest City Ratner "hadn't decided" whether it would build the first Atlantic Yards tower using modular technology--claims that, as I reported last month, were highly questionable.
Now that a bank is on board, as are unions, so the news is ready to be released.
And the New York Times scoop, which describes a 25% wage cut, does not offer a comparison between the long-promised claims of Atlantic Yards total construction jobs and the potential now--though, as I describe below, there's a significant gap, greater than 50%.
Nor does the article describe what the new figures--both in terms of wage cuts and fewer jobs--do to calculations of Atlantic Yards' fiscal impact. And the construction unions offer Ratner a bye, no longer pointing out that Ratner has reneged on promises.
In a warehouse deep inside the Brooklyn Navy Yard, a small team of carpenters, electricians and engineers have secretly labored for months on an assembly system for turning tubular steel chassis into fully equipped apartments that can be stacked and bolted together at a construction site.
On Dec. 18, they will be put to the test, as Bruce C. Ratner, chief executive of Forest City Ratner, breaks ground for the world’s tallest prefabricated, or modular, building, a 32-story residential tower at Flatbush Avenue and Dean Street. It is the first of 15 planned modular buildings at the $4.9 billion Atlantic Yards site; some are to rise to 50 stories.
If it works, Mr. Ratner and his partners say, they will be at the forefront of a new industry.
It is an ambitious and risky undertaking, more so than the $1 billion Barclays Center arena that Mr. Ratner opened there three months ago.
Savings passed on?
The Times reports:
If Mr. Ratner has, as he claims, “cracked the code,” it could lead to more affordable housing, or it could simply mean greater profits for the developer.
Note that executive MaryAnne Gilmartin told investment analysts last month, "We believe if we go modular, it would be invisible to the consumer. This building should perform at the level of finish, fit and feel commensurate with a conventional building, so it is priced accordingly."
New partnership
The Times describes "a financing commitment from Bank of New York" and "a partnership with Skanska," a Sweden-based construction company operating the factory in the Navy Yard.
Union deal
While unions had expected to earn $85 an hour in wages and benefits, it won't be the same:
Gary La Barbera, president of the Building and Construction Trades Council, acknowledged that the unions had lost ground to nonunion residential contractors in recent years and were largely absent from the affordable housing field.
Under the new agreement, Mr. La Barbera said union factory workers would earn $55,000 a year, 25 percent less than the average union construction worker.But, he said, the trade-off is that the factory worker will work steady hours throughout the year, regardless of the weather.
We see this as an opportunity to get into markets we’re not in,” Mr. La Barbera said. We can’t ignore an emerging industry. We see it as creating more job opportunities in residential construction.”
That of course is something of a pivot. Atlantic Yards was promised as union-build, affordable housing construction.
So if the implication is that, however much they lose on this project, they'll make it up another way, that wasn't what the unions signed on for.
How many jobs?
The Times reported that there would be 125 workers at the factory--a number once 190--with 60% of the work done there, saving the developer "as much as 20 percent on construction costs and cut the delivery time to 18 months, from 28 months." Savings would increase on the rest of the 15 towers.
How many jobs were there be--could there be 15,000 construction jobs (in job-years) as once promised, or 17,000 job-years, as detailed in some official documents?
Not even close.
If 125 workers represent 60% of the work, that suggests there would be about 208 workers total. If they all work 18 months straight--not likely for those in the field--that means the first tower, with 363 units, would require 312 job-years.
The number of job-years is about 86% of the total number of units.
That implies that the total 6,430 units would generate some 5,530 job-years. Add in an office tower, on long-term hold, and the total might go up, say, 10-15%.
But that's still way off the original promises. Even if there are 6,500 total job-years, that suggests a total of 43.3% of 15,000 job-years and 38.2% of 17,000 job-years.
What's affordable?
The Times reports:
(Half of the 363 apartments in the first building will be for poor and working-class families.)
Not so. Moderate-income subsidized units are hardly for "working-class families." Who can afford $2,700 a month--surely more when the building's done--for a two-bedroom unit?
Empire State Development, along with Community Boards 2, 6, & 8 are co-hosting a public meeting at Borough Hall at 6:30 pm Thursday, November 29 to share design plans for the first residential building at the Atlantic Yards site.
The site is on Dean Street at Flatbush Avenue, flanking the Dean Street entrance to the Barclays Center.
Note that meeting will focus on design and, presumably, address such issues as the impact of construction on sidewalks. There will be no applications taken for the housing. Here's more info on the configuration of that subsidized housing.
The notice does not indicate whether the first building will be built using modular technology.
