Affordable Housing Project Aims For Six-Figure Incomes

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The 5 million square feet of new apartment space that the city wants built on the Queens side of the East River will include 3,000 apartments of affordable housing, according to a request for proposals released this week by the city’s Department of Housing Preservation and Development.

The proposed complex at Hunter’s Point South is “in accordance with the Mayor’s New Housing Marketplace Plan, which responds to the changing housing needs of New York’s communities by committing to the new construction or rehabilitation of 165,000 housing units by 2014,” the RFP reads.

But in an illustration of the complexities underlying “affordable” housing, most of the city-subsidized units at Hunter’s Point will reserved for families making more than the average city family.

Sixty percent of the 5,000 apartments at Hunter’s Point South are supposed to be affordable; the rest are market rate. But two-thirds of the affordable housing being constructed there will be reserved for people making between 81 percent and 165 percent of the area median income, or AMI. For a family of four that income range translates to $63,000 to $130,000.

One-third of the affordable housing will be available to families making less than 80 percent of the AMI, or $63,000.

The city will subsidize all the “affordable” units, and those units are required to be affordable permanently. If a developer wants to build more than the required 3,000 affordable units, the RFP states, those units “should be skewed toward the upper tier in furtherance of this project’s middle income goals.”

Area median income is defined by a federal government formula, which yields an estimated median of $79,200 for a family of four. But Census data indicates that the median income for a family of four in New York City is $64,679. So most city families won’t qualify for the “affordable” apartments at Hunter’s Point South for those making $63,000 and up.

The Hunter’s Point development has been discussed for years, and its middle-class orientation is no surprise. But the RFP does revive the question that underlies all affordable housing programs: Which groups get the space? That question is increasingly important as cost pressures re-mould the mayor’s housing plan.

The sites covered by the RFP, which calls for responses by September 7, will generate about 1,000 housing units, at least 600 of which conform to the affordability requirements. Construction is supposed to begin within a year of the city and contractor signing a deal. The rest of the Hunter’s Point area will be developed later.

“It has been decades since New York has seen a project of this scale with the aim of creating a haven of affordability for our hardworking families – the teachers, health care workers, veterans, municipal employees, and first-responders who are the irreplaceable backbone of our City,” said HPD Commissioner Rafael Cestero in a statement announcing the RFP.

Mayor Bloomberg’s affordable housing plan has, from the beginning, targeted a broader band of incomes than affordable housing traditionally does, including moderate income families too “rich” for typical housing programs, and very low-income households for whom even the modest rents offered by traditional affordable housing were too expensive.

Including higher income families in the mix upset some housing advocates, who believe that scarce government resources should be dedicated to assisting people least able to afford market rents. But proponents noted that the city’s middle-class families face housing cost pressures too—and are essential to the political viability of the housing plan.

In its early years, the Bloomberg plan to build or preserve 165,000 units of affordable housing exceeded its target to direct 68 percent of the plan’s housing to lower-income people. That lower-income share was expected to decrease as the plan evolved from preserving existing housing toward more new construction, which is costlier and requires higher rents to sustain. (Subsidies never cover the whole cost of building and running affordable housing units, so rents are necessary to offset those costs. Those rents are set based on residents’ incomes, so a more expensive project needs higher rents and higher-income renters.)

However, because of cost pressures in the years since, the plan has consistently relied more on preservation than construction. Earlier this year, the Bloomberg administration injected more money into the affordable housing plan and oriented the remaining units, most of which were supposed to be newly built, toward preservation instead. Instead of 73,000 preservation units, the plan will encompass at least 105,000. And rather than building 92,000 new units, the plan is now targeting about 60,000.

The effect of that move on the program’s overall income mix remains to be seen. But because preservation is cheaper than new construction, those projects will require lower rents to sustain, meaning that lower-income people could be the beneficiaries of HPD’s revised plan.

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