Affordable Housing in New York City | The Stoler Report-New York’s Business Report

Affordable Housing in New York City | The Stoler Report-New York’s Business Report


♪ [THEME MUSIC] ♪>>YOU HAVE 8.5 TO 9 MILLION PEOPLE LIVING IN NEW YORK CITY. WHERE DO PEOPLE FIND AN AFFORDABLE APARTMENT? HOW DID THEY FIND AN AFFORDABLE APARTMENT? WHO IS ELIGIBLE FOR AN AFFORDABLE APARTMENT? CAN THEY OWN IT OR RENT IT? WHAT’S HAPPENING? I ASSEMBLED THIS GROUP OF INDIVIDUALS TO TALK ABOUT AFFORDABLE HOUSING IN NEW YORK CITY. EACH ONE WILL INTRODUCE THEMSELVES AND TELL US A LITTLE BIT ABOUT IT.>>BRYAN KELLY WITH GOTHAM ORGANIZATION OR EVP OF DEVELOPMENT. THE FIRM IS MORE THAN 100 YEARS OLD. FASHIONED OURSELVES AFTER BEING A PUBLIC PRIVATE PARTNER. I AM IN DEVELOPMENT WORKING IN COORDINATION WITH CITY AGENCIES HAVING A HISTORY OF COLLABORATING WITH NOT-FOR-PROFIT ORGANIZATIONS. WE FOCUS ON A DOUBLE BOTTOM LINE, WHICH IS SOCIAL IMPACT AND ECONOMIC, SO A WIN-WIN FOR COMMUNITIES. RIGHT NOW, THROUGHOUT THE FOUR BURROUGHS, EXCLUDING STATEN ISLAND, WE HAVE AT LEAST 3000 MIXED-INCOME APARTMENTS IN OUR PIPELINE IN DESIGN OR IN NEAR FUTURE A GROUNDBREAKING.>>JESSICA LEVINE SHERMAN, I WORK AT DOUGLASTON DEVELOPMENT. I AM AN ASSOCIATE VICE PRESIDENT OF AFFORDABLE HOUSING. WE WORK WITH NONPROFITS, GOVERNMENT AGENCIES, AND OUR OWN TWO DESIGN TO CONSTRUCT AND MANAGE AFFORDABLE PROJECTS IN THE AFFORDABLE PIPELINE. WE HAVE ABOUT 900 UNITS READY TO GO OVER THE NEXT FIVE YEARS.>>DANIEL DUKA. I WORK WITH THE BRIARWOOD ORGANIZATION AND LIKE THE TWO OF THEM, WE HANDLE ACQUISITION, RFP, OVERSEEING DEVELOPMENT,, CONSTRUCTION AND MANAGEMENT OF AFFORDABLE PROPERTIES. WE WORK EVERYWHERE EXCEPT STATEN ISLAND. WE HAVE ABOUT 400 IN DEVELOPMENT AND PROBABLY ANOTHER 500 BEING BUILT AS THIRD-PARTY CONTRACTORS.>>JOHN VALLADARES. SLATE PROPERTY GROUP. HISTORICALLY MARKET-RATE DEVELOPERS, BUT A HUGE FOCUS OF OUR BUSINESS IS IN THE AFFORDABLE SECTOR. AFFORDABLE, HOMELESS AND SUPPORTIVE HOUSING. WE HAVE PROBABLY A FEW THOUSAND UNITS IN OUR PIPELINE INCLUDING ENTITLEMENT WORK AND JV WORK, MOSTLY IN THE BRONX AND QUEENS. NOTHING IN STATEN ISLAND. NOTHING IN MANHATTAN.>>HERE’S A QUESTION. HOW DOES A DEVELOPER MAKE THE DECISION OF WHERE THEY’RE GOING TO BUILD AFFORDABLE HOUSING? LAND IS EXPENSIVE. DEVELOPMENT COSTS ARE EXPENSIVE. HOW DO YOU MAKE A DETERMINATION?>>THREE REAL WAYS WE CAN IDENTIFY AFFORDABLE HOUSING SITES. THE FIRST IS PURE ACQUISITION. NOT AS MUCH TODAY, BUT HISTORICALLY THERE HAS BEEN A LOT OF LAND. THE LAST THREE YEARS IN THE BRONX IT MADE SENSE TO ACQUIRE A SITE AND BUILD IT AFFORDABLE. WE DID THAT AT 192ND AND GRAND CONCOURSE. WE HAVE A 92 UNIT MIXED MIDDLE INCOME PROJECT THAT IS IN FULLY LEASED NOW.>>EXPLAIN WHAT MXED MIDDLE USE INCOME PROJECT IS.>>SO THE CITY HAS TERM SHEETS THAT ARE IN LINE WITH WHAT THEIR GOALS ARE FOR THE DEVELOPMENT OF AFFORDABLE HOUSING. HISTORICALLY, ONE WAS MIXED MIDDLE INCOME AIMED AT MODERATE INCOME HOUSING FOR WORKING FAMILIES. THERE IS THE — TERM SHEET, WHICH IS SENIOR HOUSING. THERE IS MIX AND MATCH WHICH HAS DIFFERENT LEVELS OF AFFORDABILITY, BOTH AT THE CITY AND STATE LEVEL. YOU CAN UNDERSTAND WHAT THE AFFORDABLE HOUSING GOALS ARE.>>WITHIN THOSE, IT’S FLEXIBLE, SO YOU HAVE OPTIONS TO CHOOSE WHAT AMI LEVELS YOU WANT. WE HAVE A RANGE OF AMI LEVEL.>>OUTSIDE OF ACQUISITION, THERE’S RFP FROM THE CITY WHICH WE GO AFTER OFTEN AND ARE GREAT EXCITING PROJECTS THAT ALIGN WITH CITY PRIORITIES. THEN PARTNERING WITH NONPROFITS, CULTURAL INSTITUTIONS. RIGHT NOW THE LATTER TWO MAKE MORE SENSE THAN STRAIGHT ACQUISITIONS.>>THE LAST ONE, ANOTHER ONE, ENTITLEMENT. IT’S PARTLY THROUGH ACQUISITION, BUT THROUGH REZONING AND MIH. THEY’RE NOT MAKING MORE LAND UNLESS YOU REZONE.>>A SIGNIFICANT PORTION OF APARTMENTS ARE CREATED VIA WORKING WITH NONPROFITS. EXPLAIN WHY YOU WORK WITH THE NONPROFIT FOR AFFORDABLE HOUSING DEVELOPMENT.>>LAND HAS ESSENTIALLY BECOME SUBSIDY, OR CONTRIBUTED BASIS, AS EQUITY TO FULFILL THE AFFORDABLE HOUSING PLAN. IN EAST NEW YORK, THE CONCEPT WAS TO CREATE A WIN-WIN WHERE WE ARE NOT BUYING LAND. WE ARE JOINT VENTURING 50-50 HEADS UP WITH OUR PARTNER, WHICH IS A WELL-ESTABLISHED, WELL REPRESENTED, CONGREGATION THAT LOOKED AT THEIR EXCESS LAND AND FROM A MISSION-BASED PERSPECTIVE WANTED TO CREATE AN INCLUSIVE, MIXED-INCOME HOUSING, SUCH THAT WE WEREN’T WAREHOUSING ALL ONE INCOME LEVEL. AND THEN CREATE AN ORGANIC COMMUNITY, WHICH IS DEFINED AS AN URBAN VILLAGE, LIKE A TRADITIONAL NEW YORK CITY NEIGHBORHOOD. YOU COULD HAVE EDUCATION, SHOPPING, RESTAURANTS, OPEN SPACE.>>WORK, SHOP, VISIT, PLAY.>>EVERYTHING. YOU NAME IT. ALL IN ONE SPOT. TO ME, THIS WAS A TREMENDOUS OPPORTUNITY. THIS IS LIKE THE CULMINATION OF A DOZEN RFPs IN ONE WHERE WE CAN FROM A CLEAN SLATE WITHOUT DISPLACEMENT CREATE A COMMUNITY WITHIN A LARGER COMMUNITY.>>IN THIS DEVELOPMENT, THEY ARE ALL FOR RENT.>>THE OBJECTIVE IS TO INCLUDE A COMPONENT. AS AN EXAMPLE, WE DESIGNED WITHIN ONE OF THE PRIVATE STREETS THAT IS PUBLICLY ACCESSIBLE TO CREATE MAISONETTE UNITS FOR AFFORDABLE OWNERSHIP.>>WE ARE DOING SOMETHING SIMILAR BUT ON A SMALLER SCALE WITH A CHURCH THEY WANT TO UPGRADE OR REDO. IN EXCHANGE, THE LAND AS EQUITY, WE ARE GIVING THEM A BRAND-NEW CHURCH ESSENTIALLY. ON TOP OF THAT, BECAUSE THEY’RE LOOKING FOR WHAT’S BEST FOR THEIR COMMUNITY, WE ARE PROVIDING 130-140 AFFORDABLE RENTALS FOR PEOPLE IN THEIR COMMUNITY. IN THAT SENSE, IT’S A WIN-WIN. THEY’RE NOT LOOKING FOR A BOTTOM LINE. THEY ARE LOOKING TO PROVIDE FOR THE COMMUNITY.>>I THINK IT’S REALLY IMPORTANT PARTNERING WITH A CULTURAL INSTITUTION THAT IT’S REALLY MISSION ALIGNED. YOU CAN REALLY ACHIEVE BOTH OF OUR GOALS. WE ARE PASSIONATE ABOUT DEVELOPING AFFORDABLE HOUSING. WHEN YOU FIND AN ORGANIZATION LOOKING FOR THE SAME THING YOU ARE, PARTNERSHIP LIKE THAT MAKES A LOT OF SENSE.>>IF YOU HAVE TO BUY THE LAND WE ARE TALKING ABOUT — FROM OUR PERSPECTIVE, WE CAN’T REALLY AFFORD TO PAY MORE THAN $70 A BUILDABLE SQUARE FOOT AND STILL DO AN AFFORDABLE PROJECT.>>WE ARE ALSO FINDING NONPROFITS DON’T JUST NEED TO BE LAND RICH AND CONTRIBUTING LAND. WE ARE FINDING NONPROFITS AS GREAT EXPERIENCE DEVELOPMENT PARTNERS THAT HAVE BEEN DEVELOPING AFFORDABLE HOUSING THEMSELVES FOR YEARS. THERE’S NONPROFITS OUT THERE SUCH AS CAMBA IN BROOKLYN THAT HAS PROBABLY DEVELOPED AS MANY AS ANY OTHER FOR PROFIT DEVELOPER. THEY COME WITH A BALANCE SHEET, EXPERIENCE, CONNECTIONS, AND THE GREAT MISSION AT THE SAME TIME.>>THEY DON’T WANT TO BE BOUGHT OUT AND LEAVE THEIR COMMUNITIES. THESE ARE PLACES THEY HAVE LONG ROOTS. THOSE CAN BE REALLY BENEFICIAL UNDERSTANDING THE PROJECT AND GETTING IT OFF THE GROUND.>>THEY ARE BUYING THE LAND AND BRING US IN TO HELP DEVELOP IT. THEY WANT TO MANAGE IT.>>EXPLAIN FOR MY AUDIENCE THE DIFFERENCE BETWEEN REGULAR AFFORDABLE HOUSING AND SENIOR HOUSING.>>SO, SENIOR HOUSING, UNDER TODAY’S REGULATIONS, WOULD FALL UNDER THE CATEGORY OF AIRS UNITS, AFFORDABLE, INDEPENDENT RESIDENCY FOR SENIORS. 90% OF THAT BUILDING NEEDS TO BE RESTRICTED TO THAT POPULATION.>>62 AND OVER.>>62 AND OVER AND NOT TO EXCEED 80 AMI. NEW YORK CITY THE AMI PUBLISHES $106,000, THE MAJORITY OF THE UNITS WOULD BE BETWEEN 30 AND 60 AMI. 90% OF THE FLOOR AREA WOULD BE SPECIFICALLY ALLOCATED TO A SENIOR POPULATION.>>AND THERE IS FUNDING WITHIN YOUR BUDGET FOR SOCIAL SERVICES TO MAKE SURE YOU ARE CONNECTING SENIORS WITH THE SERVICES THEY NEED TO AGE IN PLACE.>>THE SERVICE DONE THROUGH A NONPROFIT?>>THEY SPECIALIZE IN MANAGING THOSE. AND UNDERWRITING IT, TOO. THEY HAVE WORKED WITH THEM IN THE PAST AND THEY’RE REPUTABLE AND THEY KNOW WHAT THEY’RE DOING.>>WHAT ABOUT FOR-SALE? IN ALL OF THE SHOWS I’VE BEEN DOING, MANY YEARS AGO WE USED TO SPEAK ABOUT FOR SALE, ESPECIALLY WHEN YOU BUILT ON 116TH STREET AND IT WAS MORE FOR-SALE BASED ON A CERTAIN PRICE AND THERE WERE MORE ANCHOR PROGRAMS. TODAY, CAN PEOPLE GET AN AFFORDABLE FOR-SALE UNIT, BECAUSE OWNERSHIP IS STILL VERY IMPORTANT PART OF WHAT PEOPLE WANT IN THEIR LIVES?>>IN REACTION TO THAT, WE ARE UNDERTAKING LAND-USE ACTIONS ON A FEW DEVELOPMENTS AND EXPLORING WORKING WITH CITY PLANNING AND HPD TO TRY TO CREATE AFFORDABLE HOMEOWNERSHIP WITHOUT LEVERAGING PUBLIC SUBSIDY CAPITAL BY ENABLING THE MARKET RATE UNIT TO CROSS SUBSIDIZE THE CREATION OF AFFORDABLE HOMEOWNERSHIP. THE ONLY WAY THAT COULD HAPPEN IS SUCH THAT THE AFFORDABLE HOMEOWNER DOESN’T HAVE THE REAL ESTATE TAX BURDEN OVER THE LONG RUN IN SUCH THEY COULD BORROW A MANAGEABLE AMOUNT OF DEBT COVERED BY THEIR 35% INCOME LIMITATION AND CAN PUT DOWN A DEPOSIT WHICH IS MANAGEABLE, BUT MEANINGFUL, SUCH THAT THEY WOULD BE VESTED IN EQUITY IN THE COMMUNITY THEY WORK AND THRIVE IN.>>THE CO-OP IN THE BRONX THAT WAS 160 UNITS, WE SOLD THAT OUT IN A WEEKEND. WE HAD I THINK 100 TIMES THE AMOUNT OF APPLICANTS AS UNITS.>>I THINK WHERE YOU WILL SEE OPPORTUNITY ARISE TO CREATE AFFORDABLE HOMEOWNERSHIP IS ANY ZONING ACTION THAT REQUIRES MANDATORY INCLUSIONARY HOUSING, IF YOU ARE IN HIGHER COST AREAS, THEN THE MARKET RATE SIDE IS GOING TO GRAVITATE TOWARD BEING FOR-SALE CONDOMINIUM UNITS. DEVELOPERS ARE GOING TO TAKE A HARDER LOOK AT HOW TO CREATE AFFORDABLE HOMEOWNERSHIP. THERE’S A SYNERGY BETWEEN THE TENANCY ON THE AFFORDABLE AND MARKETSIDE.>>PEOPLE HAVE TO BE REALISTIC ON THE CURRENT 421A PROGRAM. 30% IS AFFORDABLE ALSO FOR A PERIOD OF 25-30 YEARS OR HIGHER. WHEN YOU HEAR AFFORDABLE, IT’S NOT SELF-CONTAINED UNIT. IT’S ALSO IN MAJOR DEVELOPMENTS FOR MOST RESIDENTIAL WORK THAT INCLUDE 30% AFFORDABLE COMPONENT. CORRECT?>>ABSOLUTELY. HISTORICALLY, ALL OF OUR REZONINGS, WE ARE SUBJECT TO NIH UNITS. THEY HAVEN’T ACHIEVED THEIR HOMEOWNERSHIP PROGRAM BECAUSE THEY’VE BEEN FOCUSED MORE ON THE LOWER AMIs. IT’S DIFFICULT TO ACHIEVE BOTH GOALS. WHEN YOU HAVE THE LOWER AMI UNITS, THE PRICES JUST DON’T WORK OUT. THEY BARELY CARRY THEIR OPERATING EXPENSES, SO THERE WOULD BE NO MONEY TO ACTUALLY PURCHASE IF YOU HAD 40 OR 50% AMI UNIT. IT REALLY ONLY WORKS AT 70, 80, 90, UP TO 130.>>THE MAYOR GETS MORE AFFORDABLE UNITS FOR HIS DOLLAR IF HE GOES RENTAL . YOU CAN SAY, WE ARE GENERATING THIS AMOUNT OF UNITS.>>THAT’S WHERE THEY NEED IT MOST. REALLY LOW AMI INDIVIDUALS.>>BUT THERE’S SOMETHING TO BE SAID ABOUT THE POWER OF HOMEOWNERSHIP, ESPECIALLY THESE AREAS YOU WANT TO SEE COME UP.>>EVERYBODY WAS MENTIONING YOU ARE DOING BUSINESS IN FOUR OF THE FIVE BOROUGHS. YOU ARE THE ONLY ONE DOING BUSINESS IN THE FIFTH BOROUGH. IT SEEMS TO HAVE A LOT OF AVAILABLE LAND. THEY HAVE NEW FERRY SYSTEMS. THEY HAVE AMENITIES. THEY HAVE SHOPPING. WHY ARE WE NOT SEEING MORE AFFORDABLE HOUSING BEING BUILT IN STATEN ISLAND?>>I JUST HAVEN’T FOUND ANY SITES IN PARTICULAR THAT WORKED WITHIN OUR BUSINESS PLAN, BUT THE WATERFRONT AREA IS DEFINITELY UPTAKE. THERE’S BEEN SUCCESSFUL DEVELOPMENTS. TO CREDIT THE IRBY PRODUCT, HAS DONE TREMENDOUSLY WELL. DENSITY IN PARTICULAR AND THE NUMBER OF SITES THAT MAKE THE DENSITY AVAILABLE.>>YOU CAN BUILD LARGER DEVELOPMENT.>>WE JUST BUILT A GORGEOUS SENIOR PROJECT ON STATEN ISLAND. IT’S ON A BEAUTIFUL CAMPUS. THERE’S WALKING PATHS. THE SERVICES PROVIDED BY THE GCC OF STATEN ISLAND. THERE IS COMMUNITY SPACES. WE THINK STATEN ISLAND IS A GREAT PLACE TO BUILD AND WE ARE CONTINUING TO LOOK AT OTHER OPTIONS.>>MOST OF THE DEVELOPMENT, ESPECIALLY I NOTICED IN BRIARWOOD, IS THE BRONX.>>WE HAVE TWO WE ARE WORKING ON RIGHT NOW IN BROOKLYN. WE GO WHERE WE ARE ABLE TO GET THE FUNDING AND SUBSIDIES. THE CITY DICTATES WHERE WE THINK AND WHAT WE HAVE A GOOD PARTNER WHO HAS A LEG UP. WE WILL GO ANYWHERE.>>WE WERE TALKING ABOUT COMMUNITY FACILITY SPACES. COMMUNITY FACILITY SPACE, FRESH GROCERY PROGRAM. WHAT OTHER PROGRAMS ARE INCLUDED IN MANY OF THESE AFFORDABLE COMMUNITIES?>>BRYAN MENTIONED AIRS. IT’S BASICALLY 20% ZONING BONUS FOR BUILDING SENIOR AFFORDABLE HOUSING, THAT’S ONE WE’RE USING IN THE BRONX.>>IT DEPENDS ON WHERE THE DEVELOPMENTS ARE TOO. A LOT OF RFPs ARE VERY CLEAR ABOUT WHAT THEY WANT IN TERMS OF COMMUNITY SPACE OR RETAIL. IF THEY’RE LOOKING TO HAVE A GROCERY STORE OR LOOKING FOR SOCIAL SERVICES, A PARTICULAR STATE RFP THAT –>>MEDICAL. THEY SOMETIMES SPECIFY VERY SPECIFICALLY.>>HEALTHY COMMUNITY SERVICES OR FOSTER CARE CHILDREN. PEOPLE WHO ARE LEAVING THE CRIMINAL JUSTICE SYSTEM. ZONING MIGHT DICTATE WHAT NEIGHBORHOOD THEY ARE TRYING TO SORT OF ACTIVATE WHICH MIGHT DICTATE HAVING RETAIL ON THE GROUND FLOOR OR THEY MAY BE INTERESTED IN HAVING COMMUNITY SERVICES PROVIDED. THAT IS SOMETHING WE THINK ABOUT ON A PROJECT BY PROJECT AND COMMUNITY BY COMMUNITY BASIS.>>FOR MY VIEWERS WHO HAVE BEEN HAPPY OVER THE YEARS THAT THEY’VE BEEN ABLE TO GET AN APARTMENT, LET’S TALK ABOUT HOW THE SYSTEM IS VERY IMPORTANT, HOUSING CONNECT. IF YOU DON’T HAVE A COMPUTER, HOW YOU CAN ALSO APPLY. THE INCOME RANGES AND SO ON.>>AS YOU MENTIONED, HOUSING CONNECT IS GREAT. IT ALLOWS PEOPLE TO SEE ALL THE AVAILABLE UNITS ONLINE.>>WHICH BASICALLY MEANS YOU OPEN YOUR COMPUTER AND YOU GO WWW.HOUSINGCONNECT OR JUST HOUSING CONNECT.>>ONCE YOU’RE THERE, YOU’RE ABLE TO SEE THE DIFFERENT BUILDINGS THAT HAVE AVAILABILITY. YOU ARE ELIGIBLE TO APPLY BASED ON YOUR INCOME BAND. DIFFERENT PROJECTS HAVE DIFFERENT INCOMES AS BRYAN MENTIONED BASED ON AREA MEDIAN INCOME.>>AND FAMILY SIZE. SOME OF THE PEOPLE APPLYING FOR THE LOTTERIES, IT’S A BIT COMPLICATED FOR THEM.>>AREA MEDIAN INCOME FOR A FAMILY IN NEW YORK IS $106,000 PER YEAR. YOU CAN ONLY PAY UP TO 30% OF THAT IN RENT. IT STABILIZES FAMILIES BY LIMITING THE AMOUNT THEY PAY IN RENT SO THEY CAN AFFORD OTHER THINGS THEY NEED TO LIVE A FULL LIFE. THE AMI BANDS RANGE. THERE’S A BIG PUSH NOW FOR OUR SPACE, WHICH IS THE HOMELESS POPULATION. I THINK IT’S 10% ON MOST TERM SHEETS.>>WASN’T THERE A RULE FOR PEOPLE WHO LIVE ON THE COMMUNITY BOARD ALSO?>>50% PREFERENCE FOR SOME PROJECTS.>>ALL THE SUDDEN A PREFERENCE FOR CITY, POLICE AND FIRE DEPARTMENT.>>CIVIL SERVICE.>>TEACHERS TOO I THINK.>>AND ALSO FOR DISABILITY UNITS. ALL OF OUR PROJECTS MAKE SURE TO HAVE ADAPTABILITY SO THAT PEOPLE WHO QUALIFY AND –>>IF YOU DON’T HAVE A COMPUTER, HOW DO YOU DO THIS AS AN INDIVIDUAL?>>YOU CAN MAIL IN THE APPLICATIONS AS WELL.>>DO YOU RUN MEETINGS FOR PEOPLE TO UNDERSTAND HOW THEY CAN QUALIFY? ONE OF THE PROBLEMS I REMEMBER, ONE OF THE DOORMAN IN MY BUILDING WAS SAYING HE EARNED A LITTLE TOO MUCH, SO HE WAS THROWN OUT OF THE LOTTERY BECAUSE HE HAD TO MAKE WITHIN THE BANDS, LITERALLY WITHIN THE BANDS, BASED ON THE NUMBER OF PEOPLE IN THE HOUSEHOLD.>>RIGHT. WITH INCOME AVERAGING WHICH WAS PASSED WHICH ALLOWS 60 OF THE AMI TO 80 BEING TAX CREDIT ELIGIBLE NOW, A LOT OF FOLKS BEING ELIMINATED FROM ELIGIBILITY NOW HAVE BETTER ACCESS MOVING FORWARD. IN THE SECOND PART OF IT IS WE HAVE BEEN PART OF DISCUSSION WITH AGENCIES ON HOW TO IMPROVE THE PROCESS. THAT WOULD INCLUDE CREATING SOMETHING ONLINE THAT HELPS STEER RESIDENTS THROUGH Q&A, WHAT NEIGHBORHOOD ARE YOU INTERESTED IN LIVING IN? HOW LARGE OF A UNIT DO YOU NEED? SORT OF FILTERING THROUGH SO THEY’RE NOT THROWING DARTS AT THE WALL AND THEY CAN FOCUS THEIR SEARCH. I THINK THAT’S A KEY PART OF IT. A LOT OF TENANTS GET FRUSTRATED THAT THERE’S ONE LINE FOR ALL THE UNITS. IF THERE’S UNITS OF 30 AND 130 AMI, EVERYBODY SHOULDN’T BE IN THE SAME LINE BECAUSE IT REALLY SLOWS THINGS DOWN. SOMEONE WHO HAS LIMITED MEANS DOESN’T HAVE THE ABILITY TO KEEP HOLDING ON WITH THE EXISTING APARTMENT THEY HAVE OR DON’T HAVE. THERE IS A PUSH AND PULL TO FIND A BETTER SYSTEM.>>I WOULD ADD TWO THINGS TO THAT. ONE, ONE OF THE BENEFITS OF WORKING CLOSELY WITH NONPROFIT PARTNERS IS THEY HAVE LARGE NETWORKS IN THE COMMUNITIES THAT WE BUILD WITH THEM IN, FOR EXAMPLE ONE OF OUR PARTNERS, THEY HOLD SESSIONS HELPING THE COMMUNITY UNDERSTAND HOW TO APPLY FOR HOUSING. IT’S PART OF THE REGULAR PROGRAMMING, NOT JUST THIS PROJECT THAT IS YEARS AWAY. ALSO SOMETHING IMPORTANT TO GET OUT AND IMPORTANT FROM A MARKETING PERSPECTIVE IS HELPING PEOPLE UNDERSTAND THERE ARE HOUSES AVAILABLE AT THE HIGHER INCOME BRACKETS. I THINK PEOPLE WHO ARE LOOKING AT UNITS THAT ARE NOT SOMEWHAT CLOSE TO MARKET DON’T REALIZE –>>– FOR 130% YOU CAN BE EARNING $102,000.>>A LOT OF PEOPLE DON’T REALIZE THEY ACTUALLY QUALIFY.>>FOR EIGHT YEARS I LIVED IN LONG ISLAND CITY — GOTHAM, THE SOUTHERN MOST END OF THE WATERFRONT, THE 1100+ APARTMENTS. WATCHING FRIEND AFTER FRIEND AFTER FRIEND LEAVE THE NEIGHBORHOOD BECAUSE AS THE RENTS ESCALATED THE $40 MARKET BECAME 60. I FOUND A LOT OF FOLKS WHO ARE MODERATE AND MIDDLE INCOME APPLIED FOR THE FIRST HUNTERS POINT SITES. THEY GOT INTO THE LOTTO THROUGH THE COMMUNITY PREFERENCE. THEY NOW RESIDE IN THE FIRST BUILDING. A BEAUTIFUL, MIDDLE INCOME, MODERATE INCOME COMMUNITY, AND NOW THEY HAVE A RENT-STABILIZED APARTMENT.>>AND THEY ARE PROTECTED FOR LIFE.>>THEY ARE PROTECTED. THESE ARE HARD WORKING CLASS FAMILIES THAT WANT TO CALL THEIR NEIGHBORHOOD HOME FOR THE LONG TERM AND IT CREATED AN OPTION FOR THEM. OTHERWISE, THEY WOULD HAVE BEEN PUSHED OUT.>>DID THEY KNOW ABOUT IT BECAUSE THEY WERE WITNESSING IT GO UP?>>THERE WERE MODEL HOMES FOR MIDDLE INCOME UNITS. THERE WAS ADVERTISING. FOLKS BECAME AWARE.>>I REMEMBER A NUMBER OF YEARS AGO SOME OF THE SENIOR HOUSING BUILT ON THE WEST SIDE. THEY COULDN’T FIND PEOPLE TO MOVE INTO THE APARTMENTS. HAS THAT HAPPENED IN CERTAIN OTHER NEIGHBORHOODS?>>I THINK IN THE BRONX SOME OF THE HIGHER INCOME BANDS CAN BE HARD TO FILL BASED ON THE TYPE OF UNIT. YOU LOOK AT THE GUIDELINES FOR SIZE. THERE ARE SMALLER UNITS IN NEW BUILDINGS THAT ARE CLOSE TO MARKET. IF YOU GO DOWN THE STREET, YOU MIGHT GET SOMETHING DOUBLE THE SIZE FOR THE SAME PRICE OR SOMETHING THAT’S SMALLER FOR MARKET.>>I REMEMBER ON SILVER TOWERS THEY HAD 130 OR 140 SENIOR HOUSING. THEY WERE LIKE 30% OF AMI. SOMEBODY WAS MAKING A MAXIMUM OF $30,000. THEY DIDN’T HAVE ENOUGH APPLICANTS FOR THOSE APARTMENTS.>>I DON’T THINK THEY ARE EXPERIENCING THAT AT ALL, ESPECIALLY AT THE LOWER AMI BANDS.>>WE FINISHED ONE IN MELROSE. WE JUST FINISHED. THAT’S 200 UNITS. THEY’RE HAVING A SLOW GO AT THE HIGHER BANDS.>>WE LEASED 160 LOW INCOME, SO 36% AMI UNITS IN STATEN ISLAND.>>WHEN THEY’RE LEASING AFFORDABLE APARTMENT, THEY ARE NOT OBLIGATED TO PAY A BROKERS FEE. THEY ARE FREE. WHERE YOU SEE THE OPPORTUNITIES IN AFFORDABLE HOUSING? IS IT A NEW YORK CITY HOUSING NYCHA PROPERTY?>>TWO THINGS WE HAVEN’T TALKED ABOUT THAT ARE INTERESTING AND IMPORTANT. THE FIRST IS DEFINITELY THAT NYCHA IS PUTTING OUT RFPs TO DO PUBLIC PRIVATE PARTNERSHIPS TO REHABILITATE AND PRESERVE 62,000 UNITS THE NEXT 10 YEARS. THAT’S I THINK A VERY BIG THING IN THE AFFORDABLE HOUSING SPACE. IT’S VERY IMPORTANT FOR NYCHA.>>WE HAVE ALL THE NEW YORK CITY HOUSING UNITS IN NEED OF MAJOR RENOVATION AND REPAIRS.>>IT’S A REALLY EXCITING PARTNERSHIP. ALSO THE CHANGES IN THE RENT STABILIZATION LAWS THERE WILL BE A DIFFERENT WAY PEOPLE LOOK AT, YOU KNOW, OBVIOUSLY THE DIFFERENT PRICE POINT. DEFINITELY OPPORTUNITY FOR SEASONED DEVELOPERS TO PURCHASE EXISTING BUILDINGS –>>UNDER THE 11 A PROGRAM — >>ARTICLE 11.>>IT’S NOT OUR FORTE. WE ARE PASSIONATE BUILDERS AS YOU KNOW, BUT THERE IS A NICHE WHERE MIDDLE-MARKET EXISTING BUILDINGS COULD BE ACQUIRED FOR PRESERVATION RATHER THAN FOR WHAT SOME OTHER SPONSORS DID, WHICH IS WHAT EXCITED THE ELECTIVES, WHICH WAS TURNING UNITS.>>UNDER THE PRESERVATION, IT PRESERVED AND TAXES ARE ALSO SAVED THE NEXT 25-30 YEARS.>>PURCHASING LONG-TERM AFFORDABILITY.>>IN ADDITION TO THE PRESERVATION WORK WITH NYCHA, THERE’S LAND THAT NYCHA IS SITTING ON THAT SHOULD BE AND WILL BE OPEN TO DEVELOPERS.>>WITH REGARDS TO NYCHA, WE WERE TALKING ABOUT THE PARKING LOTS — >>NOT JUST PARKING LOTS. IT’S LAND. SENIOR LGBT HOUSING ON VACANT LAND ON MYRTLE AVENUE IN DOWNTOWN BROOKLYN. IT WAS A NYCHA RFP, IT WAS A NYCHA LAND. WE BUILT 100-150 UNITS WITH 100% AFFORDABLE SENIOR LGBT HOUSING. ON LAND THAT HAD A FEW TREES ON IT. TON OF OPPORTUNITY ALL THROUGHOUT NYCHA’S PORTFOLIO.>>I REMEMBER 10 YEARS AGO WHEN THE CITY FUNDING AGENCIES DIDN’T HAVE ANY SUBSIDY CAPITAL LEFT, OR VERY LITTLE. WE ARE AT A PEAK WHERE DEMAND IS NOW YOU CAN GET — I THINK LONGER TERM IT WILL LEVERAGE AND CREATE MORE UNITS THROUGH PRIVATE CAPITAL.>>UNDER THE MANDATORY INCLUSION, HOW MUCH TALLER CAN YOU BUILD?>>SO, I THINK WE WOULD ALL AGREE THERE ARE NOT A TON OF SITES AS OF RIGHT NOW THAT ARE AVAILABLE TO PURCHASE. ANY LAND-USE ACTION, REZONING, MAJOR SPECIAL PERMIT IS GOING TO REQUIRE MANDATORY INCLUSIONARY HOUSING. IF WE WERE TO BUY MANUFACTURING SITE AT A NONPROTECTED AREA, NOT INDUSTRIAL ZONE, AND CREATE 300 UNITS, WE WOULD HAVE 100 PERMANENT AFFORDABLE APARTMENTS UNDER THE 70-30 PROGRAM. WITHOUT GOVERNMENT CAPITAL, ASSUMING YOU CAN PURCHASE THE LAND AND REZONE IT ACCORDINGLY, YOU COULD CREATE IN AN AREA WHERE MARKET RENT IS SUPPORTED THOSE AFFORDABLE HOUSING UNITS THROUGH CROSS SUBSIDIZATION. IT DEPENDS ON THE MARKET YOU ARE IN AND WHAT THE CONSUMER NEEDS.>>AND EXPEDITE THE PROCESS FOR BUYING LAND AND CARRYING THE CROSS OF BUYING THE LAND AND THEN GOING FOR REZONING OR UPZONING, SOME OF THESE THINGS CAN TAKE A YEAR OR TWO YEARS.>>THAT’S WHY NYCHA SITES ARE SO ATTRACTIVE. YOU DON’T HAVE TO HAVE THAT . YOU CAN BE REZONED AND TITLED WHILE STILL UNDER CITY CONTROL. YOU DON’T NEED MONEY UP FRONT.>>IN CONCLUSION, FOR AFFORDABLE APARTMENTS, MY APPLE IS BRIGHT AND THERE ARE GOOD THINGS BECAUSE ALL OF THE PEOPLE ARE WORKING OVER HERE AND DEVELOPING MORE APARTMENTS. WINNING THE LOTTERY FOR AN AFFORDABLE APARTMENT IS BETTER THAN WINNING THE LOTTERY ON A SCRATCH OFF GAME. I WOULD LIKE TO THANK BRYAN, JESSICA, JOHN AND DAN. I WILL SEE YOU NEXT WEEK. ♪ [THEME MUSIC] ♪

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