City to increase parking rates at public housing lots

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CITY HALL — The city plans to increase parking rates for public housing lots as part of efforts to secure the massive system’s financial future.

The move is among several steps in Mayor Bill de Blasio’s 10-year strategy to tackle budget woes and disrepair at the New York City Housing Authority, which faces a nearly $2.5 billion cumulative projected deficit over the next decade.

NYCHA will start raising parking rates to local market values next year, phasing in price increase for residents through the end of 2017.

Public housing tenants will be charged no more than $150 a month for parking permits under the plan. Spaces go for about $315 for 12 months now, depending on the type of permit.

The agency aims to make up to $5 million annually on parking by increasing the rates and boosting occupancy. Right now average occupancy is at 59 percent and the city collects $2.4 million for parking permits.

Current tenants will have first dibs on any open spots, but those that remain will be offered to the public at market rate. This will determined by neighborhood.

The permit charge increases for tenants, while capped at about $150 per month for areas with highest demand, will also be determined by location.

The city estimates the rate will increase to about $50 a month for NYCHA residents on Staten Island. The current system-wide average is $26.33 a month.

PERSPECTIVE

NYCHA will phase in rate raises at 80 to 90 developments first beginning in 2016. The rest will follow in the next year.

Officials stressed that the change wouldn’t affect many of NYCHA’s more than 400,000 residents. Only 10,111 tenants have parking permits for NYCHA lots.

There are 19 parking lots across seven housing projects on Staten Island, offering 706 spaces. Four of those lots are considered “full” and 288 of borough parking spaces are occupied. Forty-eight are taken by non-residents.

“It’s a meaningful issue,” de Blasio said when asked about those Staten Island public housing residents who rely on the lots and would be subject to an increase. “I want to put it in perspective of the overall situation.”

THE OVERALL SITUATION

In addition to the nearly $2.5 billion deficit, NYCHA faces some $17 billion in unmet capital needs for major infrastructure repairs.

De Blasio’s 10-year plan also includes leasing unused land in housing complexes for private residential development. The city is looking at dozens of sites — parking lots, trash areas and other open spots — to create some 10,000 affordable housing units. An additional 3,500 rent-regulated apartments would be created in mixed-use developments that would be half affordable and half market-rate.

Another measure would modernize rent collection with online payment options and other changes. NYCHA only collects some 74 percent of rent and fees now.

“If we are committed to affordable housing and reducing income inequality, we should not try to balance the books by raising fees on those already struggling to make ends meet.”

Officials said the entire plan would address $4.6 billion of the agency’s repair and improvement needs, creating a $200 million surplus over 10 years.

Councilwoman Debi Rose (D-North Shore), whose district includes most of Staten Island’s public housing, said overdue repairs and incomplete renovations are “unacceptable” and applauded de Blasio and NYCHA Chair Shola Olatoye for their commitment to improving the system.

“However, their proposal to drastically increase parking fees takes too heavy of a toll on my constituents, most of whom are underserved by public transportation,” Ms. Rose said in a statement. “If we are committed to affordable housing and reducing income inequality, we should not try to balance the books by raising fees on those already struggling to make ends meet.”

Source: http://www.silive.com/news/index.ssf/2015/05/nycha_parking_rate_increase.html

UrbaNERD: A Year of Construction Accidents in New York City

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May 15, 2014 was a Thursday. At a construction site on 29th Street in Manhattan, a bucket of mortar fell and struck a worker on the shoulder. At different worker at another site fell four feet when he missed a step on a ladder. Another ladder mishap cross the East River on Hoyt Avenue in Queens saw a construction worker fall five feet. A fourth incident on 50th Avenue in Queens was the scariest: A worker feel a story and a half onto a roof. But all four of the workers were taken to the hospital.

New Yorkers witness everyday the creation of the new New York. It’s downright strange to make it to work or school in the morning without hearing a jackhammer or seeing a tower crane or transit mixer in operation. But the daily dangers of construction work are not something most New Yorkers think about, perhaps because the sight of hardhats and orange construction fencing is so common it’s faded into the background of the city.

There were 231 construction accidents in the five boroughs in 2014, up from 186 in 2013, leading to 237 injuries and 8 deaths. One might think that the big, noisy equipment—jackhammers, front loaders and the like—would be the dangerous thing about construction. But as was the case last May 15, gravity is the chief peril: According to the city Department of Buildings, 39 percent of accidents in 2014 were caused by workers falling while another 25 percent involved stuff falling onto workers.

A City Council committee recently held a hearing on whether DOB was implementing recommendations from a 2008 safety panel; DOB and the city comptroller have disagreed about the extent to which the agency has complied with the panel’s suggestions.

But one thing that’s not debatable is that DOB tracks worksite accidents and provides fairly detailed data on them to the public. The agency’s annual report on accidents gives you a day by day sense of the physical price paid—sometimes in very minor ways, but often with real consequences—at construction sites around the city. It’s worth a read if only to better understand what’s at play behind the orange netting and jersey barriers you pass on the walk home.

Here is the story told by December’s reports:

12/1/2014: A worker struck his knee when he miss-stepped and fell while descending the stairs. The worker was examined by a doctor and went back to work.

12/2/2014: A worker ran over his own foot while moving a concrete washout box. The worker was treated at a local medical center and released. No DOB action was necessary.

12/4/2014: A concrete worker fell approximately twelve feet onto the railroad tracks below. The worker was working on the crash wall separating the Amtrak Rail Road from the foundation of a new building and was wearing a safety harness but was not tied off. The worker suffered multiple fractures and was taken to the hospital.

12/4/2014: Two electricians were pulling cables for securing cameras, when one of the electricians stepped onto the sheetrock ceiling of the loading dock below and fell approximately fourteen feet. The electrician sustained unknown injuries. The security cameras were unrelated to the construction sites at the location. No DOB action was necessary.

12/5/2014: A concrete worker injured his foot when he lost control of the sheet he was passing to another worker. The worker was taken to the hospital. No DOB action was necessary.

12/6/2014: A worker was fatally injured when he fell while descending a ladder from the second floor to the first floor. ECB Violation.

12/6/2014: A pedestrian tripped and fell while crossing a small pedestrian bridge, approximately six to seven inches high with a handrail, provided as a walkway over a concrete hose laid on the sidewalk. The DOB inspector observed no tripping hazards on the secured bridge. The pedestrian was taken to the hospital.

12/8/2014: A worker slipped and fell approximately six feet when he attempted to adjust his hat while climbing a ladder.

12/8/2014: A construction worker suffered burns while working with a torch and was transported to by EMS. FDNY requested DOB conduct an inspection. No DOB action was necessary.

12/9/2014: A worker suffered lacerations to the nose and face when struck by a reshore while stripping forms. The worker was treated and released from the hospital. DOB issued violations and stop work order. ECB Violation.

12/10/2014: A worker was struck in the back by a Docker 350 jack that the injured worker and another worker shifted to make room for the end cap they were installing. The injured worker was transported to the hospital. No DOB action was necessary.

12/11/2014: During the dismantling of the hoist, a bolt fell striking a worker below. The worker was treated locally. DOB issued a violation and stop work order. ECB Violation.

12/11/2014: A worker injured his back while unloading a truck. An ambulance was called.

12/12/2014: The Site Safety Manager reported to DOB that a worker injured his arm while chipping concrete. EMS was called.

12/15/2014: The Site Safety Manager reported to DOB that a worker fell approximately two feet from a Baker scaffold when he felt dizzy and fainted.

12/15/2014: The Site Safety Manager reported to DOB that a security guard injured his knee when he tripped and fell while conducing his rounds. The security guard was taken to the hospital for observation.

12/17/2014: A worker for the Amtrak portion of the job was chipping rock and was struck by a piece of rock. EMS was called. No DOB action was necessary.

12/17/2014: An electrician sustained a laceration to his shoulder from a piece of metal stud when he attempted to turn around in the small closet where he was installing electrical conduit. The electrician was taken to the hospital by ambulance. DOB issued a violation. ECB Violation

12/18/2014: A worker was inured when struck by a bag filled with asbestos debris. Workers on the roof were loading a hoist bucket when one of the bags fell striking worker. DOB issued a violation and stop work order. ECB Violation

12/20/2014: A worker was struck in the head by a beam used to hold formwork during stripping operation. The worker was taken to the hospital. DOB issued a violation and stop work order.

12/23/2014: The Site Safety Manager Reported to DOB that a worker was struck in the foot by a beam while using a jack hammer. EMS was called. Other Construction Related Incidents

12/23/2014: The Site Safety Manager reported to DOB that a panel fell on a worker’s leg while worker was stripping forms. EMS was called.

12/26/2014: A worker was fatally injured when he fell from the scaffold deck or the access ladder. The scaffold deck had rails around the perimeter and the access to ladder was protected by a hinged trap door of 3/4 inch plywood. The worker had his 10 hour OSHA and 16 hour user card.

Source: http://citylimits.org/2015/05/20/urbanerd-a-year-of-construction-accidents-in-new-york-city/

De Blasio Wants to Lease Public Housing Land to Developers

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[EDIT: The de Blasio administration’s plan to lease public housing land for residential development would differ from the Bloomberg administration’s in that it would involve a combination of 100 percent affordable and 50 percent affordable projects on NYCHA-owned land throughout the five boroughs, resulting in the creation of 10,000 affordable units, markedly more than Bloomberg’s 80-20 splits, which de Blasio had previously decried as “a pure giveaway to wealthy elites.” Curbed regrets the error.]

Mayor Bill de Blasio is set to announce a number of changes to the New York City Housing Authority today, and the most controversial of them is sure to be his intention to move forward with the Bloomberg administration’s plan to lease public housing land to private developers. The Land Lease program would generate an expected $500 million over 10 years while simultaneously resulting in the creation of more affordable housing, but also stoking fears that the doors have been opened for public housing to be privatized. De Blasio, then Public Advocate, was highly critical of Bloomberg’s version of the plan, which called for 20 percent of the units in the new buildings to be designated affordable.

In addition, there will also be budget cuts at the agency, an increase in rent collections, and an increase in the amount that residents are charged for parking spots.
· Mayor de Blasio’s Public Housing Plan to Seek City Aid and More Money From Tenants [NYT]
· NYC Mayor Bill De Blasio to Unveil 10-Year Plan to Fix Public Housing Agency[WSJ]
· NYCHA coverage [Curbed]

Source: http://ny.curbed.com/archives/2015/05/19/de_blasio_wants_to_lease_public_housing_land_to_developers.php

This is the largest private real estate project in U.S. history

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The Hudson Yards project, on Manhattan’s west side, is the largest private real estate development in the U.S. Nothing of this scale has been done in New York City since Rockefeller Center was constructed in the 1930s.

Hudson Yards will create 17 million square feet of commercial, residential and retail development over a total of 28 acres with 5,000 new residences and 100 new shops. A new subway stop, a new public school and a new luxury hotel are also on the way. The first commercial tower — the 52-story Ten Hudson Yards — will open in early 2016. It will be home to major brands such as Coach, SAP and L’Oreal.

Now here’s the catch: Most of the project is being built on a platform above an existing and fully operational train yard.

It’s been a challenge to the property’s developer, privately-held Related Companies. Because foundations can be put in between tracks, the train tracks determine what can be built and where. “That may or may not be the right place for for our building so it gets a little complicated,” Jay Cross, president of Related Hudson Yards, tells Yahoo Finance Editor-in-Chief Andy Serwer in the accompanying video. There are a total of 30 tracks in the yards and Related can only shut down four tracks at a time to work. “After years of great planning for this, it’s basically been a military operation,” he says.

And it has been years.  Related was selected as the project’s developer in May 2008. “Then the world fell apart in October,” says Cross, alluding to the onset of the financial crisis. “But it actually worked to our advantage,” he says. The company used that time to complete municipal and other approvals. By the time the U.S. was coming out of the recession, Cross says, Related signed its first major tenant, Coach. Construction began in the fall of 2011.

The project is still in its first phase, being built over the Eastern Rail Yards. By 2017, phase two will begin over the Western Rail Yards closer to the Hudson River where eight more buildings will go up, mostly residential. Related hopes to complete the project by “the mid 2020s.”

The price tag of the Hudson Yards project is upwards of $20 billion. “We use just about every kind of financing,” Cross says. “Just because the volume of dollars is so great that you have to go after every source.”  Among the financing methods Related has turned to is the federal government’s controversial EB-5 program where individuals from overseas can invest as part of a path to legal residency. Related has raised more than $600 million in the program so far.

Here’s how it works: Foreign individuals invest between $500,000 and $1 million in a project that will create at least 10 jobs per investor. The EB-5 program was created by Congress in 1990 and has garnered support from the likes of Warren Buffett, Bill Gates and Sheldon Adelson.  But numerous reports of fraud have surfaced related to the program and there is a growing push to reform. Nevertheless, it’s become a hot source for real estate financing.

Cross says EB-5 is just one avenue Related has used to secure funds. “You go to every bank. You go to non-banks, you go to sovereign wealth funds, you go to other equity investors, so I think virtually every type of real estate investor in the world, either we’re going to them or they’re coming to us,” he says. “EB-5 is one part of that and it’s been very successful for us.”

Cross says other investors and consortiums of banks will make up the balance of the required financing.

Watch Andy Serwer’s full interview with Related’s Jay Cross

The Hudson Yards development has been years in the making.  A little more than a decade ago, then-NYC Mayor Michael Bloomberg’s nearly four-year quest to build a football stadium in the area was voted down. The plan was supposed to spark the redevelopment of the West Side and lure the 2012 Olympics to New York. Of course, that didn’t happen. There was also a failed effort to move the Yankees to the West Side in the 1990s.

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But this isn’t just a New York story. Cross says projects like Hudson Yards are “advancing the cause of cities.” According to the United Nations, 54% of the world’s population lives in urban areas. That figure is expected to increase to 66% by 2050.

“That’s where you get upward mobility,” Cross says. “That’s where the jobs are that can enhance the quality of life… We hope to pioneer things here in Hudson Yards which we can do on scale and then roll them out in lots of other cities.”

Editor’s Note: An earlier version of this article appeared with an incorrect title for Jay Cross. He is president of Related Hudson Yards, not Hudson Related Yards.  Also, 17 million square feet includes residential space in addition to commercial and retail space as the earlier version indicated.  This piece has been updated.

Source: http://finance.yahoo.com/news/largest-real-estate-project-in-u-s–is-being-built-above-a-train-yard-162054332.html

US housing construction reaches post-crisis record

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The U.S. housing market continues its slow but steady recovery, with building permits filed in April rising to the highest level since 2007. According to new data from the U.S. Census Bureau, building permits for private-housing units in April reached a seasonally adjusted, annualized total of 1,143,000. This is 10.1 percent higher than the 1,038,000 recorded in March and 6.4 percent above the April 2014 level of 1,059,000. While these numbers are encouraging, the recovery is far from complete. Residential construction plummeted in the aftermath of the 2007 mortgage crisis, and stayed at historically low levels through 2011 (see chart above). The market has since recovered, but permits are still well below their average from the 1990s and early 2000s. Between January 1994 and September 2007, the number of building permits never fell below 1.2 million and was above 2 million almost every month from 2004 to 2006. “I think we still have a ways to go (in the recovery),” said Sam Chandan, chief economist at Chandan Economics. He explained that much of the growth in permits is coming not from single-family homes, but from multifamily housing. In other words: more units are being built today, but they are on average smaller and many of them are rentals. “That does not suggest a balance in the housing market,” Chandan added. Compared to the national market, residential construction in New York City dropped much more precipitously during the crisis, but has also rebounded more strongly since (see chart above). In 2014, the Department of Buildings authorized the construction of 21,478 new residential units, according to NYU’s Furman Center. This is still below the levels of 2007 and 2008, but well above the 2010 low of 1,647. And unlike the U.S. as a whole, New York City is now issuing more residential building permits than it did in the early 2000s.

Source: http://therealdeal.com/blog/2015/05/19/us-housing-construction-reaches-post-crisis-record/

Here’s how Ferris wheel idea has fared elsewhere

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The steel rides, invented by a bridge engineer for the 1893 Chicago World’s Fair, are seeing a resurgence now that they’ve morphed into what are often called observation wheels. But they’re not being built at amusement parks, because they’re considered to be too tame by the thrill seekers who flock to Kings Island and other similar locations.

“Big wheels are seen as a way to create a defining element for destination projects,” reported Urban Land, the magazine of the Urban Land Institute, in 2014. “There are cities all over the world that have an interest in something that is iconic,” Wil Armstrong, president of Starneth, an engineering and construction firm working on wheels in New York City and Dubai, told the magazine.

Interest in the big wheels was sparked by the London Eye, which opened in 2000.

Newport on the Levee officials and the Price Group, the Levee’s owner, said earlier this week they have a letter of intent to build an observatory/Ferris wheel on the riverfront to offer views of Downtown and Northern Kentucky.

If completed, Newport would be one of a growing number of cities, both in the United States and throughout the world, to offer an observation wheel keep tourists engaged with the city. Some have become solid attractions, while others have fallen short of ridership expectations.

Construction began last month on the world’s tallest observation wheel, standing at 630 feet. The New York Wheel will cost more than $500 million, all of it private money, said chief marketing officer Travis Noyes.

Projected to open in May 2017, the wheel will be able to hold 1,440 people in 36 gondolas. It is estimated the wheel could have as many as 30,000 visitors per day and more than 4 million each year.

By comparison, the Levee gets 3.5 million visitors each year. The wheel being discussed for Newport would be 180 feet tall.

Ryan Marnell, a manager at the Newport Hofbrauhaus, said he isn’t sold on the idea yet.

“It’s a unique and aggressive take on helping the tri-state area, but it’s also kind of terrifying, the amount of money a project like this will take,” Marnell said. “I don’t think an observation wheel would be my first, second or third choice as a project to bring to the area.

“It would be really cool to have that and it’s going to trickle down to all the businesses here eventually, but at what cost?” he said.

Bill Lawson, 49, of Bethel, has already seen and heard enough of the project to know he wants it.

“It’ll be quite a spectacle, and it’ll cost plenty, but I wish it was already here, to tell you the truth,” Lawson said. “It’ll be great for everyone here. It’ll look great on the river. It’s a good thing.”

In New York, ride the ferry and a wheel?

Noyes, the New York Wheel marketing director, said developers have been trying to get a wheel into New York City for many years. Staten Island is a good location because it has a great view of the Manhattan skyline and many tourists are already taking the Staten Island Ferry.

“These two things together made an ideal location for a wheel,” Noyes said.

But many tourists will take the ferry and head right back to Manhattan, so Noyes believes the wheel will give them a reason to stay and spend money on the island. Each ticket is estimated to cost $35.

Not every observation wheel has been a surefire success.

Source: http://www.cincinnati.com/story/news/2015/05/18/newport-observation-wheel/27559703/

Wegmans to open first New York City store

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Specialty stores aside, New York City has never been a magnet for top-flight grocery chains. Bodegas and cramped, compact, and overpriced food stores are often the norm in many neighborhoods. Blame high real estate prices for some of the woes.

For years, in fact, many of the lowest-rated food stores in Consumer Reports’ supermarket surveys were located not just in the New York metropolitan area, but in the East as a whole. The arrival of national players like Whole Foods, Trader Joe’s, and Costco helped invigorate the local landscape, as did the expansion of small fresh-food-focused chains like Fairway. But the city was still in search of a regional superstar. Until last week.

Wegmans, which our subscribers recently ranked as America’s top grocer, a position it’s held for a decade, is coming to Brooklyn. The 85-unit, family owned chain based in upstate Rochester, has more than half of its stores in the central and Western parts of New York. Sixteen are located in Virginia, around the Washington beltway, and the rest are scattered across Massachusetts, Maryland, New Jersey, and Pennsylvania. Wegman’s New York City store will be in the historic but deteriorating Admiral’s Row at the old Brooklyn Navy Yard, which is undergoing extensive commercial redevelopment. The redeveloped Navy Yard complex is expected to open in 2017. Wegmans says no date has been set for the supermarket’s opening.

See how your grocer stacks up by reading, “America’s best supermarkets—and worst.”

What makes Wegmans a standout is the chain’s outstanding perishables, cleanliness, and superior service coupled with reasonable prices. Usually, there’s more of a tradeoff between price and quality. The stores with the top-tier produce, meat, and prepared foods, for example, typically charge a lot. Whole Foods is a prime example.

The proposed 74,000-square-foot store, although much larger than the typical supermarket, will actually be smaller than most Wegmans, which average 100,000 to 140,000 square feet. Still, it will be huge for this community. The company plans to initially hire 450 employees, including 150 full-timers. Wegmans projects the number of full-time positions may grow to as many as 250. Wegmans tends to hire more workers than many stores because of its emphasis on service departments and prepared foods, which require additional labor.

Why make the move to the Brooklyn, and why now?

“We have stores in New Jersey and have wanted to open a store in New York City, but finding the right site took a while,” says Jo Natale, Wegmans vice president of media relations. “The former Brooklyn Navy Yard site is being developed by Steiner NYC, a developer we worked with for our Bridgewater and Manalapan, N.J., stores.” The fact that the location is accessible to so many shoppers—and with plenty of parking—made it even more attractive, she says.

The key question, of course, is whether this is a one-shot deal or it signals an intended larger Wegmans presence in the region.

“We need to get this store up and running before we can take another step, and right now, we don’t have a timeline for construction or a projected opening date,” Natale says. “And, again, New York metro sites that meet our criteria, even with a smaller footprint, are hard to come by.”

—Tod Marks

Source: http://www.consumerreports.org/cro/news/2015/05/wegmans-first-new-york-city-store/index.htm

Rezoning NYC for More Affordable Housing May Have Had Opposite Effect

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When might rezoning to induce the production of more affordable housing have the opposite effect? According to Hunter College professor Tom Angotti, it could be the result of the proposals of New York City Mayor Bill de Blasio.

WNYC’s Janet Babin reports that East New York, a neighborhood in Brooklyn adjacent to the borough of Queens, is one of 15 communities that the city plans to rezone to spur more housing development and specifically create more affordable housing. A proposal from the Department of City Planning in February called for rezoning much of East New York to spur new affordable housing development. Community organizations, however, are concerned that the proposal will create affordable housing, but not affordable enough for current residents. East New York is much poorer than the city overall; median household income in New York is $52,223, but for the part of East New York that will be rezoned, it is only $33,980.

“The city has to change its approach to planning and stop tying it to zoning,” said Angotti, an urban affairs and planning professor at Hunter. “They’re in the nasty habit of rezoning to encourage new development, and rezoning to preserve areas that are more privileged and areas that have political influence and power.”

Also on the list for possible rezoning to create more housing are parts of Flushing and Long Island City in Queens, East Harlem in Manhattan, Jerome-Cromwell in the southwest Bronx, and Staten Island. The rezoning strategy is simple—increase allowable housing densities in order to spur more development and in theory use some of increased density for affordable units. However, East New York has a higher density than New York City overall in terms of people per household, Babin reports.

“We should be looking at the Upper East Side, Midwood, across the income spectrum. If we’re going to increase density, it should be across all neighborhoods,” said Michelle Neugebauer, the executive director of the Cypress Hills Local Development Corporation.

Under de Blasio’s predecessor Michael Bloomberg, and then under de Blasio himself, development plans that promised housing affordable to current residents at the Atlantic Yards project in Brooklyn ended up being clearly not affordable to the residents of the area who thought they might have a chance to benefit. The new plan for two towers at the Atlantic Yards development, now called “Pacific Park,” calls for “affordable” two-bedroom rents at $3,000 a month. Specifically, the tax-subsidized “affordable” units in the development, now a partnership between Forest City Ratner and the Chinese-government-owned Greenland Group, will have three bands of affordable units: 35 percent of the units to rent at low-income two-bedroom units for between $647 and $1,025 a month and moderate income units at $1,458 a month, another 15 percent targeted to middle-income affordability at $2,405 a month, and the remaining half of affordable units for a different definition of middle income, to rent for $1,967 for a studio apartment, $2,470 for a one-bedroom, $2,972 for a two-bedroom, and $3,430 for a three-bedroom. As Norman Oder reported for BKLYNR last year, confirming suspicions that we had many years ago about the Atlantic Yards project and the deals that were cut to get it supported by the public, “Thus, many subsidized Atlantic Yards apartments—especially at the next two towers—will be out of reach to many who rallied for the project at public hearings, under the banner of New York ACORN.”

“A lot of the new units that are going to be developed are going to be out-priced [for] median income for a resident of East New York,” said Bill Wilkins, the executive director of the Local Development Corporation of East New York, referring to the rezoning plans for East New York. Based on experience, he may be more right than wrong, and once again, the low-income people of New York City neighborhoods who need affordable housing may find that “affordable” leaves them priced out.—Rick Cohen

Source: http://nonprofitquarterly.org/2015/05/18/rezoning-nyc-for-more-affordable-housing-may-have-had-opposite-effect/

How to get more affordable housing for less money

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A s the state legislative session nears a close, now is the time for lawmakers to consider the renewal of key housing laws affecting the city. In addition to the perennial struggle over whether and how to continue rent stabilization, another law, newly controversial, has taken center stage.

The 421-a tax exemption statute, which has come to be a key incentive for developers to build lower-rent housing, has faced criticism for its high cost — $1.1 billion in foregone taxes this year — and the fact that some of its exemptions have been applied to developments such as One57, a multi-million dollar luxury tower.

Mayor de Blasio, bucking the demands of progressive advocates, is pushing to reform and extend the law — including new, lucrative 35-year tax exemptions — as a building block of his twin housing goals: on-site economic diversity and 80,000 new affordable units.

But at a time of budget stress that makes it difficult for the city even to hire new police officers, the mayor should consider pushing to bring back a former part of the 421-a law that would allow affordable housing to be built at far lower cost to the city in lost tax revenue.

How? By encouraging developers to create that affordable housing off-site in far less expensive neighborhoods, rather than insisting that much of it be put in otherwise market-rate developments in pricey neighborhoods in Manhattan and Brooklyn.

Between 1985 and 2008, the 421-a law gave developers, mainly in Manhattan, a much shorter tax exemption, lasting just 10 years, if they purchased their tax break from an affordable housing developer elsewhere, typically the Bronx, Brooklyn or Queens.

Through this program, some 7,700 affordable housing units were built. Of those built between 2002 and 2006, in modern and attractive buildings, the present value cost in city tax revenues ranged from $283,512 to $354,390 per affordable unit.

That may sound like a lot. But in a new study for the Manhattan Institute, my co-author Alex Armlovich and I find, based on public data, that a reformed 10-year “tax certificate” program would be far less costly than the program on which the mayor proposes to rely — up to 35-year tax exemptions for inclusionary, on-site development.

Specifically, we found that the cost in foregone taxes for each affordable unit in an inclusionary on-site development would cost the city three times more, on average, than an equal unit in an all-affordable development in a less expensive part of the city.

Critics might complain that spurring the production of much more affordable housing further away from the city’s core will perpetuate the tale of two cities de Blasio decries. I would counter that, to the contrary, it’s a way to keep New York City a place of genuine economic opportunity for large numbers of working-class families.

Put simply, the city could support three newly-built 1-bedroom units in Astoria, or four units in Bed-Stuy, for the price of one new affordable unit in core Manhattan.

Keep in mind the city is making sizable investments through reduced taxes. The size of the current average rental subsidy passed on to a household earning 60% of median income is $3,855 per month in core Manhattan, versus $1,655 per month in Astoria.

It’s important to acknowledge that the original off-site approach was not perfect. Market-rate developers paid less for tax-exemption certificates than the actual value of the tax reduction. But that problem can be addressed by putting a cap on the exemption (as Mayor Bloomberg did near the end of his administration), and by limiting the areas eligible to supply certificates to the 15 neighborhoods targeted by the mayor for redevelopment.

Market-rate developers are still likely to participate — and the city will lose much less in tax revenue it desperately needs for a wide variety of purposes, not just low-income housing in high-income buildings.

City officials say that, through the onsite inclusionary approach, they are addressing a “fair housing” problem — but most low-income New Yorkers will always live in lower-income neighborhoods. This mayor must not give up on the idea of making poor neighborhoods good neighborhoods; his approach perversely implies that only by living with the wealthy can the poor be assured of good services.

By adding back a reformed 421-a tax certificate option in HPD-targeted neighborhoods, the state can help the city realize the construction of more low-income housing for the same, or much less, cost, while funding the mayor’s 15 neighborhood redevelopment initiatives. It’s a better use of limited tax dollars that’s likely to produce more housing for those in need.

Husock is vice president for policy research at the Manhattan Institute. He is co-author with Alex Armlovich of the upcoming report, “Renewing 421a Affordable Housing Tax Abatement: Mend It Don’t End It .”

Source: http://www.nydailynews.com/opinion/howard-husock-affordable-housing-m-article-1.2224086