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September 6, 2007

The paradox of unaffordable ($7313!) "rent-stabilized" Atlantic Yards housing

Atlantic Yards Report

By what stretch of the imagination should an apartment leasing for $7313/mo. be "rent stabilized?" You can thank Bruce Ratner and his affordable-housing partner Bertha Lewis of ACORN for that absurdity.

Initially, Norman Oder was skeptical about Ratner's and Lewis's claim that even units priced above the $2000 "vacancy decontrol" threshold would still be "rent stabilized," but (the reader may want to sit down for this) Oder stands corrected by none other than the "Mad Overkiller" himself:

Would Atlantic Yards rental housing--the 2250 affordable units and the 2250 market-rate units--all be rent-stabilized, as has been promoted?

The answer: sort of, but in a confounding way that somehow would classify a market-rate apartment renting for $7313 as rent-stabilized.

And it would classify middle-income affordable units, some costing well more than $2000 a month, as rent-stabilized, even though such sums generated skepticism about affordability from potential renters last year and, indeed, $2000 is the trigger for decontrol of current rent-stabilized units.

According to the developer's chart of estimated rents, 450 of the 2250 affordable units would rent from $1861 to $3084 a month and another 450 would rent from $1488 to $2467.

Bertha Lewis of ACORN, in a 7/31/06 article in City Limits, described all 4500 Atlantic Yards rentals as rent-stabilized:

Beyond building new affordable units, all 4,500 rental units at Atlantic Yards will be rent-stabilized -- no small victory in an era where thousands of rent-stabilized units return to the free market every year.

...
The rules would be different for Atlantic Yards rental housing, which would be funded via the New York City Housing Development Corporation (NYC HDC). The term sheet for the agency's mixed-income program--50% market, 30% middle-income, 20% low-income units--states:

Upon project stabilization, New HOP and Market rate rent increases will be governed by allowable rent stabilization increases with no vacancy decontrol.

So, indeed, there would be rent stabilization, but with a twist. For the 2250 market-rate rental units, it would come after the fact, after the developer works out the rent.

I asked Aaron Donovan, spokesman for the NYC HDC, who confirmed, "The market sets the initial rents and subsequent to that, rent increases are governed by rent stabilization. If Forest City Ratner were to apply for financing under our Mixed-Income Program, these terms would apply."

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NoLandGrab: As for the "no small victory" declared by Bertha Lewis, most of the aparments would be well out of the reach of those whom ACORN represents, which may be the first time in history that ACORN has advocated for upper-class housing reform.

Posted by lumi at September 6, 2007 10:00 AM