The largest building so far in Pacific Park Brooklyn, slated to open later this year, is set to deliver 258 affordable units (30%) out of 860 total–but seemingly all for middle-income households, many earning six figures.
A studio could rent for $2,155, a one-bedroom for $2,700, and a two-bedroom for $3,235, according to 2020 city guidelines.
Those income-targeted apartments, next to the Barclays Center in the 51-story 18 Sixth Avenue, will be aimed at households earning 130% of Area Median Income (AMI), according to a lender for the project.
Presented with the lender’s publicly stated information, however, a spokesperson for developer Greenland Forest City Partners said, “AMI and rent levels have yet to be confirmed.”
Affordable for whom?
Indeed, 130% of AMI means income limits of $103,480 for one person and $118,300 for two people, though the income floor–as set for other buildings aimed at such cohorts—might be $68,000 to $81,000 for a studio and $80,000 to $87,000 for a one-bedroom.
“Affordable” does not mean inexpensive but rather that tenants pay a third or less of their income in rent.
Curiously, if 18 Sixth “affordable” units go to households at 130% of AMI, the rents might approach, and even exceed, the market-rate rents estimated for a proposed building two blocks east, 840 Atlantic Avenue.
According to 840 Atlantic’s recently issued Environmental Assessment Statement, studios would rent for $2,141, one-bedrooms for $2,745, and two-bedrooms for $3,347.
If those affordable units at 18 Sixth don’t go solely to middle-income residents, there’s one alternative configuration. The Affordable New York tax break offers the option of 20% middle-income apartments and 10% low-income ones.
That would mean 172 apartments at 130% of AMI, plus 86 units at 70% of AMI. The latter would deliver a 1-BR for $1,356, aimed at an individual earning up to $55,720 or two people earning up to $63,700.
Putting off disclosure
Greenland Forest City, which is developing 18 Sixth along with The Brodsky Organization, has for months declined to reveal the planned affordability levels.
For example, at a community meeting last Sept. 15, executive Scott Solish of Greenland USA—who owns nearly all of Greenland Forest City–said, “That [affordability] information will become available sometime early in 2021.”
That information was apparently already available, thanks to the AFL-CIO Housing Investment Trust, which is providing $100 million of a syndicated $460 million construction loan for 18 Sixth Avenue.
On its web site–on a page captured by the Internet Archive before Solish’s statement–the Housing Investment Trust states, “The 257 affordable housing units will be designated as affordable to families earning 130% of Area Median Income.” (The official total is now 258.)
The application for the tax exemption can be filed up to one year after the building’s completed, but presumably, the loan was made after factoring in the expected rental income.
The AFL-CIO page proudly cites the tower as creating “nearly 3.9 million hours of union construction work” and $982.9 million in total economic benefits.
Builders benefit too. The tax break, according to HPD, offers a full exemption for a construction period of up to three years and then the first 25 years, plus a ten-year exemption equal to the percentage of affordable units during those years. Affordability requirements last 35 years.
Changing plans from Atlantic Yards
The rent-stabilized affordable rents at 18 Sixth likely would rent for less than the market-rate ones, given the building’s proximity to a transit hub and expected amenities, as well as the pattern at 461 Dean, a mixed-income building on the other side of the Barclays Center.
Still, the configuration would be a far cry from the original promise of mixed-income affordable housing at Pacific Park, formerly Atlantic Yards.
According to a non-binding Affordable Housing Memorandum of Understanding that original developer Forest City Ratner negotiated in 2005 with advocacy group New York ACORN (and later incorporated into the much-hyped Community Benefits Agreement), half the project’s 4,500 rentals were to be affordable.
That meant 900 of the 2,250 affordable units would be designated for low-income households, at 50% of AMI or below.
But the project’s guiding Development Agreement, later negotiated with the state authority Empire State Development, allows for a much more generous definition of “affordable”: as long as the housing participates in a government program.
Beyond the four Pacific Park buildings under construction, 876 more affordable units must be built by May 2025, before a penalty for delay kicks in: $2,000 per month for each missing apartment.
It’s unclear whether the gap can be filled by units that meet the loose requirements rather than the more expansive initial pledge.
Reassessing the policy
The pattern of “affordable” units limited to the middle-class has provoked some reassessment by policymakers.
In its recent fair-housing report, Where We Live, the de Blasio administration proposed restricting that option “in neighborhoods where market conditions allow for new housing development without it.”
That would “help promote the construction of more lower-income units in higher-cost, amenity-rich neighborhoods.”
Would middle-income units get a discount?
Asked about the 18 Sixth Avenue tower, the developer’s spokesperson said, “We will work under the Affordable New York program to set rent levels and will be providing hundreds of units of affordable housing in the neighborhood.”
It’s not out of the question that, if units at 18 Sixth Avenue are designated for households at 130% of AMI, the initial rents will be below city guidelines, as has happened recently with some other buildings.
At 522 Grand Street in Williamsburg, for example, rents for affordable one-bedroom units were set at $2,310, not the $2,700 set by city guidelines. While market-rate apartments there were listed at $3,200, incentives brought the net effective rent below $2,700.
At One Blue Slip in Greenpoint Landing, studios last year were listed at $2,370—more than the 2020 guidelines–but other affordable units seemingly rented at a discount: 1-BR for $2,542, 2-BR for $3,063, and 3-BR for $3,530. But that seems related to the offering of a one-month free on one-year leases for affordable units.
Meanwhile, that building offers even larger incentives for market-rate units. A one-bedroom listed at $3,445/month has a net effective rent of $2,584, as a one-year lease in the building now gets four free months added.
At least temporarily, that suggests market rents are pretty much “affordable.”