Thursday, August 25, 2011

FCR's Gilmartin: AY "the most ambitious middle-income housing project ever undertaken in this city" (no, and that's not what sold ACORN)

‪Now that people are talking about the possibility of the first Atlantic Yards tower, let's remember that Forest City Ratner's Atlantic Yards point person, MaryAnne Gilmartin, told a real estate industry panel last year that Atlantic Yards "is the most ambitious middle-income housing project ever undertaken in this city."

That's a remarkable statement because 1) it's not true (though it is ambitious) and 2) the Atlantic Yards "affordable housing" was sold to, and supported by, community groups that represent poor and working-class people, not middle-income residents.

Who was the housing for?

That's not to say middle-income New Yorkers don't need housing help. But Atlantic Yards would never have drawn the public support it did had it not been perceived as helping those most struggling.

For example, in an affidavit filed 1/17/08 regarding a state court challenge to the environmental review, Gilmartin stated that the Community Benefits Agreement represented "carefully articulated commitments to the local communities," with "lack of affordable housing" one of the issues "that have plagued communities within Brooklyn."

That sounds a lot like the interests of ACORN, but even back in 2006 there was a disconnect between the rents for affordable housing planned at Atlantic Yards and the expectations of those seeking that housing, as many found it unaffordable.

Gilmartin's remarks

Gilmartin spoke at a panel, Real Estate: A Local Business with Global Concerns‬" held at at New York University’s Schack Institute, 2/23/10.



As shown above, at about 1:35:38, a questioner suggested that housing for the rich and the poor would sort itself out--I'm not so sure of the latter--but asked, "Where do we put the middle class?"

"I'll certainly jump in," Gilmartin responded, "because of Atlantic Yards, and what Atlantic Yards really means in terms of the project. It's way more than an arena. And in fact it is is the most ambitious middle-income housing project ever undertaken in this city, because of its commitment to produce 2250 units of housing, affordable housing but not just the 20 percent of the 80/20 formula, but actually incomes that range in the 80 to 150 percent of AMI [Area Median Income], which is where the middle class sits."

Counting the units

Actually, Atlantic Yards is by no means "the most ambitious middle-income housing project ever undertaken in this city." It would contain 900 low-income units and 1350 middle- and moderate-income units.

By contrast, as the state Division of Housing & Community Renewal's list of State Supervised Middle Income Housing Developments indicates, Co-Op City in the Bronx has more than 15,000 units and Starrett City in Brooklyn has nearly 6000 units.

Neither, however, are close to New York City's center. But the Hunter's Point South development in Queens is supposed to have "[u]p to 5,000 housing units, 60 percent of which will be affordable to middle income families."That means 3000 units.

The city's language may be more tentative than the promises of 2250 units (900 + 1350) at the Atlantic Yards site, but remember, the latter depends on sufficient subsidies.

The middle class


Gilmartin continued, "And certainly people know that in New York City there is a housing crisis for that particular group of people, because if you're a fireman, a teacher, it's very difficult to find housing, particularly close to a city center. And I think that, when you look at a place like Downtown Brooklyn and you think about the creation of 2250 units of housing, and the challenges that we've had to put that together, and it's not just the challenges associated with the litigation, it's public policy, it's the cost of building that housing…"

It's not Downtown Brooklyn, though it would be in nearby Prospect Heights.

The costs


She identified multiple costs: "The fact of the matter is that building high-rise, that is, something over eight stories, that can be delivered efficiently and cost-effectively, with union labor, in a place where you have land costs. Those are the three challenges: land costs, high-rise construction, and union labor. When you put the three of those in the mix and you try to deliver affordable housing, it is quite challenging. And that's why the government policy, and the government incentives, and keeping land costs to a manageable number so that a private developer would actually put that kind of housing online, is essential."

Well, Forest City already got $100 million from the city for land acquisition. It is expected to gain concessions from unions, and perhaps even use much less costly modular construction.

But it's a bit disingenuous for Gilmartin to complain about the cost of high-rise construction. After all, Atlantic Yards was sold to the public, via supporters like ACORN's Bertha Lewis, because of the presumed enormous quantity of housing. And by building a much larger quantity of housing than existing zoning would permit, Forest City could use market-rate units to cross-subsidize the affordable ones.

Meeting the challenges


"And so, I think that you're absolutely right, it is one of the great challenges in a city like New York, to deliver quality middle-income housing for the workforce. We call it workforce housing, too," Gilmartin concluded. "And so I share your frustration. I actually believe that Atlantic Yards is so important because of the fact that it represents a pioneering effort to put that kind of housing online in a quantity that surpasses most anything that's been done in a dense downtown location."

In her last remark, she was more circumspect, and thus more accurate, about the scope of the project.

Whether it gets done as promised is another question. Atlantic Yards was supposed to be done in a decade. But the Development Agreement allows 12 years for Phase 1 and 25 years for the project as a whole, and it need not be built in full.

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