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August 30, 2007
In Case of 421-a Reform, Good Governance Is In Eye of Beholder
State Bill Overhauls Affordable Housing Requirements for Tax Breaks
Brooklyn Daily Eagle
By Sarah Ryley
This article does a pretty good job of explaining the bill, and is worth a read. NoLandGrab is only going to focus on the Ratner Clause today:
Adding to the confusion over the controversial bill — which determines how much affordable housing, if any, developers have to include to receive property tax breaks — few people close to the issue were clear on exactly what the bill says, particularly in regards to the controversial Atlantic Yards “carve out.”
Here's Ryley's explanation of the Atlantic Yards "carve out" (footnotes, ours)
Atlantic Yards would be the only project within the exclusion zone that receives tax breaks for buildings that have only market-rate condominiums, but the tax exemption was changed from 25 years to 15 years, according to Gov. Eliot Spitzer’s office.
[This concession, touted by the Governor's office, appears to have made the carve-out more politically palatable.]
The original bill allowed only Atlantic Yards to average the income level of tenants in the “affordable units” so it would equal 70 percent of the area median income (versus requiring that tenants earn no more than 60 percent of the area median income). After recent revisions, the developer can make 20 percent of its units affordable to those earning up to 120 percent of the area median income, as long as they all average out to 90 percent. The new requirement is the same that other heavily government subsidized projects must adhere to, mainly because those projects were originally conceived to create more middle income housing in the city.
[This is where the benefits to Ratner get really fuzzy. This suggests that Ratner's affordable housing is more of a middle-income than a low-income housing plan. Also, It's not clear what "other heavily government-subsidized projects" refers to, though it's likely that the reference pertains primarily to Queens West, the CIty's favorite project du jour.]
It should be noted that Atlantic Yards was planned under the old legislation, when developer Bruce Ratner promised to include low- and middle-income housing in the project even though he could have built no affordable housing in any of the buildings and still received a 25-year tax abatement.
[This is a reminder that Ratner was planning on reaping even more benefits.]
Although no one will come out publicly in support of the special provisions within the legislation, including developer Forest City Ratner’s own people, privately some are calling it a grandfather clause. Also, Ratner is expecting other subsidies and financing that dictate what percentage of the housing in the project must be made affordable — but none would have given the company tax abatements for the market rate buildings.
[We repeat: the actual benefit is murky because, as we mentioned above, it looks like it's more of a middle-income housing plan, but "Ratner is expecting other subsidies and financing" which will ultimately help "dictate" how many units must be provided to applicants in different income bands (determined by percentage of the area's median income).]
“It’s unfortunate that again, public benefits are again being utilized to subsidize middle-income housing in Atlantic Yards,” says [NYC Councilmember Letitia] James. “So many community-based organizations came out in support of Atlantic Yards primarily because of the alleged affordable housing.”
[James makes the same observation — that it appears that Ratner's "affordable" housing will be directed more towards the middle-income applicants, thus making his "affordable" housing plan more expensive for those who need it most.]
NoLandGrab: There are not a lot of developers who can get personal legislative consideration, especially in a "reform" bill, but there's only one "Bruce."
Posted by lumi at August 30, 2007 8:04 AM