Atlantic Yards 'Affordable Housing' a Net Loss for Brooklyn

Tomorrow morning, Barclays Center will be officially opened with a ribbon-cutting and press conference. Forest City Ratner Companies has come under criticism for delaying construction of the 2,250 units of affordable housing that were key to get political support for the Atlantic Yards project. It has been suggested that the developer will therefore take the opportunity tomorrow to announce a date to break ground on the first building with affordable apartments.

Where Atlantic Yards’ affordable housing is concerned, experience has shown it’s better not to rely on public statements made by FCRC, but instead upon written commitments the firm has made to the State and the City. These include the Master Development Agreement (MDA) between Forest City and the State of New York, and filings FCRC has made with the New York City Housing Development Corporation (HDC) (as recently reported by Norman Oder in City Limits). Let’s consider some basic questions in light of these documents.

When will the promised 2,250 units of Atlantic Yards’ affordable housing be delivered?

Since the arena groundbreaking in 2010, FCRC has repeatedly delayed previously-announced targets for construction to begin on the first residential building at the site. However, its obligation under the MDA is to begin construction by March of 2013. FCRC is obligated to start the second building by March of 2015, and the third building by March of 2020. The MDA gives FCRC until 2022 to complete these buildings, and allows that they may contain as few as 300 affordable apartments. In the event the buildings start late or are not complete by 2022, FCRC would owe relatively small liquidated damages to the State and City.

The MDA gives FCRC until 2035 to deliver the remaining 1,950 affordable units. The MDA does not assess any damages to FCRC in the event these affordable units are delivered later than 2035.

Who will get to live in Atlantic Yards' affordable housing?

FCRC has stated that half of the first building’s 363 apartments would be affordable, for a total of 182. However, of these, only 35 will be two-bedroom units suitable for families. The rest will be one-bedroom and studio apartments.

The U.S. Census Bureau estimates the median family income in Brooklyn was $36,188 in 2005. According to the documents FCRC filed with HDC, only 9 of the two-bedroom affordable apartments in Atlantic Yards’ first tower will be available to families earning at or below that level.

Why aren’t there more affordable apartments for Brooklyn families being built?

HDC’s criteria for “affordable” are based upon “area median income,” or AMI, as calculated by the Federal government. Because the geographic area included in the calculation for Brooklyn would include not only Manhattan, but suburbs in Westchester and Long Island, the AMI used for calculating rents for the first Atlantic Yards tower is $83,000. On top of that, developers applying for HDC financing are allowed to base rents on incomes up to 160% of AMI. In the case of Atlantic Yards’ first residential building, half of the “affordable” two-bedroom units are planned for families with incomes between $104,580 and $119,520.

Further, affordable housing subsidies are provided on the basis of the number of units in a building, not its total square footage, so developers are incentivized to build more smaller units for individuals, and fewer larger ones for families. Having a developer build a larger number of smaller units, instead of fewer family-sized apartments, also helps Mayor Bloomberg achieve a goal to create and preserve 165,000 affordable units by 2014 under his New Housing Marketplace Plan. (The Mayor’s plan does not distinguish affordable units by number of bedrooms.)

What does this say about the future of affordable housing at the project?

The terms of FCRC’s agreement with the State, together the City guidelines for affordable housing bonds, allow FCRC to game the system to deliver a small number of apartments for middle-income families in Brooklyn during the first phase of the project, while optimizing the use of HDC bond financing to build apartments for more affluent tenants.

There is every reason to believe this trend will continue throughout the project lifecycle. If the remainder of the Phase I buildings are programmed like the first one has been proposed, 27 apartments for families of median income in Brooklyn will be completed by 2022.

Given the lack of remedies through which the State can enforce the completion of Phase II, it is likely that the project terms will be renegotiated again well before 2035. It is therefore difficult to guess how many affordable apartments, if any, can be expected in later phases of development.

According to the Atlantic Yards Final Environmental Impact Statement, clearing the Atlantic Yards footprint caused the loss of 171 apartments. Considering that many of the families displaced were of modest income, the number of affordable apartments lost must surely have been greater than the 27 likely to be provided by the project in buildings over whose completion the State may have some leverage.

Atlantic Yards has received over $300 million in taxpayer dollars, hundreds of millions more in indirect subsidies, zoning overrides, and access to the power of eminent domain. In exchange for all of that and more, the State, City and FCRC promised to provide thousands of units of affordable housing. Now it seems likely that Atlantic Yards may never replace the number of affordable apartments for families that it demolished, let alone net additional units for middle-income families in Brooklyn.

It is true that there are many who will celebrate the opening of Barclays Center this month. It is equally true that Atlantic Yards’ cynical promises of affordable housing are an outrage to the taxpayers of New York and the communities of Brooklyn.