“I’m getting ready to pay my debt, and here it is!” said Bertha Lewis and then turned to Mayor Bloomberg and kissed him squarely on the lips. The executive director of New York ACORN had done it again—for the second time in a month, she was at the podium with the mayor and city housing officials announcing a major new affordable housing deal, and exuding all the love a candidate for reelection could ask for.
The occasion was the signing of a memorandum of understanding between ACORN and developer Forest City Ratner Companies, decreeing that 50 percent of the new housing to be built at Brooklyn’s Atlantic Yards site will rent for less than market rate. “I’m a developer who in his heart wants to do the right thing,” said Bruce Ratner, who has been under fire from Prospect Heights residents for his plans to build an arena and high-rise towers on seized property. “There are pulls and pushes. Being able to partner with community groups is an important part of my life.”
The 50 percent commitment itself isn’t unprecedented. For the last two years the city Housing Development Corporation has financed a mixed-income housing program, with 20 percent of units going to the poor, 30 percent to middle-income tenants, and the rest renting at market rate. That bond program has financed about 700 units so far. Atlantic Yards, totaling a planned 4,500 units, would be by far its biggest project to date.
What ACORN won was a commitment to devote most of the middle-income units to households earning significantly less than the maximum HDC allows, and to limit rents to 30 percent of household income. Usually, HDC New Housing Opportunity Program apartments are open to renters earning up to 175 percent of area median income, or, averaging for household size, about $94,500. Ratner agreed to lower the cap to 160 percent, and possibly as low as 140 percent, depending on project financing and market conditions as the new towers get built. What’s more, the affordable units will be allocated to five income tiers, ranging from very low income to low to moderate and into the low and high middle, making them available to families not adequately served by existing subsidy programs. “Tiering is a critical component of the program,” said Ismene Speliotis, executive director of the New York ACORN Housing Corporation. “Otherwise developers just take the maximum incomes.” Last year, ACORN helped secure $25 million in similarly tiered housing subsidies from the City Council.
The deal is not yet complete. A “community preference” for local residents seeking the affordable units is still under discussion, with the catchment area yet to be determined. Ratner is also planning to build units for sale. HDC’s new Affordable Cooperative Housing Program could be used to support co-ops for buyers earning up to 175 percent of median, but ACORN is seeking deeper affordability than that. There’s still the question of how the agreement will be enforced, and who will oversee tenant screening for the affordable units. ACORN is still talking with Ratner about playing a paid role in management.
Prospect Heights councilmember Letitia James, a critic of the Ratner development, responded to the housing deal with a mix of appreciation and skepticism. “The question is the 50 percent which is going to be market rate—it will have to be luxury housing. It’s a zero-sum game: the luxury will cancel out the low income,” said James. “The market prices will have to be high to subsidize the affordable housing and the arena.”
The housing deal is just one piece of a larger community benefit agreement under negotiation. The Building and Construction Trades Council, SEIU 32BJ, and other labor groups are pressing for a project labor agreement that would commit Forest City Ratner to standards on wages, benefits, job training and local hiring.
Earlier this spring, the city and state reached an agreement to help finance Atlantic Yards with a projected $200 million in public subsidies. To proceed, the project will also need control of railyard property owned by the MTA.