Pricey Building Raises Questions for De Blasio Housing Plan

Kerim Odekon


Kerim Odekon

Kerim Odekon

Kerim Odekon is a 2nd year medical student at the SUNY Stony Brook School of Medicine. From 2006 to 2012 he was a planner and policy analyst at the New York City Department of Housing, Preservation and Development’s Office of Development. He was the 2010 recipient of the Fred Hayes Prize for Public Service.


A development that used generous subsidies and largely offered high-rent units represents the kind of deal the mayor’s affordable housing initiative ought to avoid.
By Kerim Odekon | Thursday, Feb 6, 2014

Affordable housing developers and advocates are praising the recent appointment of Goldman Sachs alumnus Alicia Glen as Deputy Mayor for Housing and Economic Development. As the City’s new housing czar, Deputy Mayor Glen is at the helm of crafting and implementing Mayor de Blasio’s bold new housing plan, a crucial component of his progressive vision to attack inequality in New York City.

On Goldman Sachs’s website, Deputy Mayor Glen describes the Bradford (aka the Acacia, 1560 Fulton Street) , a 105-unit Brooklyn building she co-developed in 2010, as work that she is “particularly proud” of. In the short clip, Deputy Mayor Glen notes that 30 percent of Bedford Stuyvesant residents live in poverty and that officially 15 percent are unemployed. She then showcases the Bradford as a transformative project poised to provide needed housing and economic growth for the neighborhood.

Unfortunately, the Bradford represents a particularly poor approach to the creation of affordable housing and raises four fundamental questions that the de Blasio administration must address if it hopes to deliver necessary housing and equitable community development:Affordable housing for whom? The majority of the Bradford’s rents are out of touch with the needs of Brooklynites. While 20 percent of the units are quite affordable (mainly 1 bedroom apartments renting at $400 per month, set aside for individuals earning less than $18,000/year), 80 percent of the “affordable” units were initially set at rents of $1,900 per month for a 1 bedroom and $2,300 per month for a 2 bedroom. In 2010, half of all Bedford Stuyvesant households earned less than $35,000/year. This means that half of Bed Stuy families would need to pay 80 percent or more of their pre-tax income to live in one of these 2 bedroom apartments. Subsequently, according to filings at the City Register, the owners of the Bradford renegotiated and weakened the terms of their regulatory documents to increase the income limits by over 20 percent on almost half the higher rent “affordable” apartments—a practice usually reserved for projects experiencing difficulties attracting households within the stipulated income brackets. Given the demand, truly affordable housing in New York City should never face issues finding tenants. Subsidizing Goldman Sachs to build essentially market rate housing in Bedford Stuyvesant is a “trickle down” approach to community development, a strategy Glen has long championed. People who can afford almost $2,000 per month for a 1 bedroom apartment already have options in central Brooklyn. When private developers, such as Glen’s Goldman Sachs Urban Investment Group, access both public land and public subsidy to build, they should deliver housing targeted to the broad spectrum of residents struggling to remain in their communities during these tough economic times.

Affordable where? Given the scarcity of public land available for affordable housing production, inclusionary zoning is intended as an incentive for the private market to build permanently affordable housing on private land in exchange for allowing developers to build bigger buildings. Projects receive a 33 percent density bonus in return for creating 20 percent of the building’s floor area as permanently affordable lower income housing (within the same building or offsite in the same neighborhood). The Bradford, however, enjoyed a density bonus even though none of its apartments are permanently affordable. Why? Glen and her development partner, BRP, utilized certificates generated by The Garvey, a nearby publicly subsidized affordable project (also developed by BRP/Goldman) built largely on public land, to satisfy the inclusionary requirements. While legal in New York City, using affordable housing built on public land to generate an offsite development bonus squanders the power of inclusionary zoning. Public development sites should already be earmarked for the production of affordable housing. The practice of allowing City-owned sites to generate an offsite inclusionary bonus fails to provide a net increase in affordable units. Mandatory inclusionary zoning is a central component to Mayor de Blasio’s housing plan, projected to generate 25 percent of his 200,000 unit target. Is Deputy Mayor Glen committed to implementing a stronger, more effective citywide inclusionary zoning policy, or will she perpetuate the current, watered down version that fails to produce sufficient amounts of affordable housing?

Affordable at what cost? The subsidies offered by the City are not commensurate with the Bradford’s public benefit in terms of affordability. The City provided the Bradford with $6.83 million in subsidies through its Housing Development Corporation, as well as with $4.38 million in City Capital funds, $1.9 million in HOME funds and $1 million in Housing Trust Fund subsidies through the Department of Housing Preservation and Development. This amounts to a $14.1 million public investment for 83 higher-rent units and just 21 lower-income apartments. At a public cost of $135,000 per unit, or $670,000 per unit if we only consider the 21 truly affordable units, this project is an inefficient use of taxpayer dollars. These figures do not even take into account the fact that two-thirds of the project’s land was public land donated to the developers, nor do they include either the federal subsidy granted in the form of a 39 percent tax credit on $15 million of qualified investments through the New Markets Tax Credit program, or the value of the project’s 25 year extended 421a property tax exemption. In addition to strengthening housing commitments, the de Blasio administration must make more efficient use of limited housing and economic development incentives.

Affordable for how long? The majority of the Bradford’s land was city owned property given to the developers at no cost. Land is New York City’s most precious resource for the production of affordable housing. The Bloomberg administration required permanent affordability only on select projects, such as Hunters Point South. To maximize public investments, the de Blasio housing plan should go further and require all affordable housing built on public land or receiving generous subsidies to be permanently affordable. When the City gives scarce land away to a private developer, it has the power and the duty to ensure that the housing built will remain for future generations.

While the Mayor has repeatedly indicated that his top staff will be following his lead and vision, in the world of affordable housing policy, the devil is in the details of voluminous regulatory documents—terrain that no mayor has the time to wade into. The role of the Deputy Mayor for Housing is to ensure that these details align with the Mayor’s vision of lasting change and tenant protections. If the de Blasio administration hopes to address the current affordable housing crisis, the Deputy Mayor will have to do more than achieve meaningless development quotas. She will have to tackle the excesses of the ineffective and inefficient development approach that she has championed in the past.




The Department of Housing Preservation and Development submitted the following response to Kerim Odekon’s February 6 op-ed, “Pricey Building Raises Questions for De Blasio Housing Plan”:

Mr. Odekon’s interpretation of the development of the Bradford (aka, the Acacia, 1560 Fulton Street), an affordable housing project in Bedford Stuyvesant is based on an incorrect understanding of the Inclusionary Housing program’s zoning resolution and the combined financing structure of two affordable housing projects.

The real headline should be: City’s Inclusionary Program Makes the Most of Affordable Housing Development: Brings Opportunity to Bed-Stuy. Two new mixed-income buildings would not exist but for the Inclusionary Housing program; and the program worked to the benefit of the community by allowing the developers to maximize the total number of affordable apartments that could be built at both properties.

While opinions may differ on the approach to take full advantage of programs created to spur affordable housing and the worth of the public benefit, it is deceptive to focus on one building. Mr. Odekon focuses on the Bradford, without acknowledging the critical relationship it shares with the Garvey, a permanently affordable housing project on the same block.

The Bradford and the Garvey are two mixed-income, mixed use projects that were financed and constructed under one master development plan. In the Garvey, which was built according to the Inclusionary program, all of the 78 apartments are permanently affordable to low-income New Yorkers, with rents at $494 to $782 per month for one-bedroom apartments and $597 to $943 for two-bedroom apartments.

Under the Inclusionary program, the additional floor area is the incentive provided to the developer in exchange for designating a minimum of 20 percent of the apartments in a building as permanently affordable to low-income households. This bonus can be used on-site to build a larger project, and/or it can be used off-site at a different property within a defined geographic area.

With the all of the Garvey’s apartments being low-income and permanently affordable, it more than met the Inclusionary program’s minimum requirement and was appropriately awarded additional floor area. The additional floor area was applied to add still more affordable apartments to the Garvey, and some of what remained was used at the Bradford, resulting in more affordable units in that building as well.

The Bradford did benefit from the Inclusionary Housing program, but the suggestion that there was some requirement for it to count or create additional new permanently affordable units in order to use that extra floor area from the Garvey is plain wrong. In fact, the Bradford capped rents and income limits on the units that could have been rented to anyone at market rates.

Mr. Odekon also asks, “affordable housing for whom,” and seems offended by The Bradford’s mixed-income model because it offers some moderate-income apartments in a low-income neighborhood. He supports a practice that would have only low-income apartments created in low-income neighborhoods.

As he puts it, some people “already have options in central Brooklyn,” with the implication that families of certain incomes should have housing choices that are limited to certain neighborhoods – and without acknowledging the limited supply of affordable, rent stabilized, new construction development in many neighborhoods.

If Mr. Odekon’s theory is put into practice, it would have the effect of segregating families based on income, reversing decades of good housing policy that seeks to create mixed-income, more diverse and balanced neighborhoods.

It is also disconcerting that he also unfortunately fails to acknowledge the positive economic impacts, employment creation, and general importance to the community that mixed-income, mixed-use developments with ground floor commercial space such as the Bradford provide. Moreover, both of these developments were advanced in the depths of the recession (Garvey 2009; Bradford 2010), when most private sector real estate development was at a standstill.

Mischaracterizing the positive impact of these developments and the process by which they were created, and using that to question Deputy Mayor Glen’s track record, allegiances and commitment to the Administration’s housing agenda is misleading and divisive.

When it comes to addressing the diverse housing needs of our neighborhoods, we need to continue to work together to make New York more affordable.



 New York City Housing Preservation and Development (HPD) Deputy Commissioner Enderlin
 obfuscating response to my recent article defends the Bloombergian trickle-down approach to neighborhood planning and stands in stark contrast to the efficient and equitable plan for City-sponsored community development called for by Mayor de Blasio. The rejoinder quibbles about the semantics of exactly how the Garvey and the Bradford relate to each other in the
 broken inclusionary housing program, and misleads readers to imply that these projects were developed under a fixed master plan. In fact, the description of the 2008 acquisition loan to Goldman Sachs/BRP states that all affordable units will serve tenants earning less than 130% of
, yet all 83
of the Bradford’s high
-rent units have income limits 27-50% higher. It is bad policy to think that building one affordable housing building with public land, $10.7 million in City subsidies, and $7+ million Federal LIHTC subsidy investment (the 73 unit Garvey) automatically grants Goldman Sachs/BRP the privilege to build a separately financed high-rent and over-subsidized  building (the 105 unit Bradford) on nearby public land. Mr. Enderlin claims that my concerns about affordability in the Bradford amount to support of segregation by income. Arguing that a building constructed predominantly on free public land, using tens of millions of dollars in City subsidies,
should reflect the needs of Bedford Stuyvesant’s diverse
residents is the opposite of a call for segregation; in fact, it is a rallying cry for inclusion. The higher-rent units in the Bradford (comprising 83 out of 105 total apartments) were subsidized in part
through the City’s
, yet the minimum income required to apply to
 the cheapest of
the Bradford’s
“middle income”
two bedroom units is 60 percent higher than the median (the middle) household income for New York City. Having high-rent units in an affordable building is good public policy, yet they should not compromise 80 percent of all units. In 2010, almost three-quarters of Bedford Stuyvesant residents earned less than $63,400, and in 2011 over half  of all households in the entire city earned less than $50,400. 75 percent of neighborhood residents, and indeed the majority of residents citywide, would need to pay over 40 and 50 percent of their  pre-
tax income, respectively, to afford one of the Bradford’s $2,300/mo apartments
. This is not inclusive community development.
Mayor de Blasio’s unifying 
is “One
 New York
: Rising Together”.
The question still stands – how can the overwhelming majority of Bedford Stuyvesant residents
“rise together” when they are priced out of new private
developments and earn too little to even apply for a majority of the units in a City subsidized building like the Bradford?
Enderlin’s claims distort
the mechanics of New York’s housing crisis and ignore the
rise in inequality that plagues New York City. The affordable housing crisis in NYC is not about a lack of $2,000/month one bedroom apartments in Bedford Stuyvesant
 these apartments already exist in the neighborhood. The crisis is the story of working families unable to find housing, households facing eviction, overcrowding and displacement, 50,000 homeless individuals (21,000 of them children), closed waitlists for rental assistance, Federal retrenchment in housing programs, and a local real estate community that lobbies incessantly (and successfully) to unwind rent protections for millions of New Yorkers. It is the crisis being faced by Bedford Stuyvesant residents who, after helping transform the neighborhood from a symbol of urban decay to a flourishing community, are now struggling to stay in the community they fought to rebuild.
De Blasio campaigned to
“hold developers’ feet to the fire, bargain harder, demand more, because [developers ar
e] getting
extraordinary value”.
He must have had over-subsidized and out-of-reach projects like the Bradford in mind. Unfortunately, HPD and its sister agency, the Housing Development Corporation (HDC), the public agencies entrusted to implement a multi-billion dollar housing plan, remain plagued by insufficient oversight and a culture of closed-door negotiations. As a result, buildings like the Bradford are over-subsidized despite agency neighborhood assessments showing significantly lower market rents and despite concerns raised by public servants about project costs. While recent efforts to increase transparency at HPD such as Local Law 44 are a step in the right direction, the law falls short of  promoting true accountability. Full development budgets should be easily accessible online, not only to stimulate competition among the developers and contractors, but to ensure that public officials operate under the assumption that good-government watchdog groups and housing advocates are monitoring exactly what the City is spending taxpayer dollars on. With greater transparency would come greater efficiency; and HPD will need to operate more efficiently if Mayor de Blasio hopes to maximize the
City’s limited resources
 to produce truly equitable community development.
Mayor Bloomberg’s New Housing Marketplace Plan made impressive gains subsidizing housing for wealth
ier New Yorkers to move into relatively lower-income neighborhoods such as Harlem and Bedford Stuyvesant, yet fell short when it came to requiring significant permanently affordable housing in wealthier communities across the city. Mr. Enderlin
rebuttal implies there is no alternative to this type of planning model. Actually, a more equitable alternative path is  possible, and it involves creating and mandating economically integrated
affordable housing in all of the City’s diverse
 neighborhoods, accessible to a broad spectrum of New Yorkers. This is exactly the sort of
 that the public expects from the de Blasio administration

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