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The Nets Arena Is Not The Real Issue In Development Of Downtown Brooklyn


Should downtown Brooklyn get a 19,000 seat basketball arena designed by world famous architect Frank Gehry? Developer Bruce Ratner, who proposes to build the arena for the Nets, a team he hopes to own, seems to want everyone to believe this is the question Brooklynites and their elected officials have to answer. Ratner is a principal in Forest City Ratner, downtown Brooklyn's biggest office developer. Forest City built the Metrotech complex in the 1980s and most recently the Atlantic Center Mall.

Take your eye off the ball for a minute or you'll miss the real game. The most important contest for Brooklynites and all New Yorkers is the public debate over what kind of downtown we need and want. Should the downtown of tomorrow be just offices, arenas and high rise apartments? Or should it be a 24-hour, 7-day-a-week community with a variety of opportunities, a healthy and safe environment, and a better quality of life? Should it be served by mass transit or cars? Should it have housing opportunities for people at all income levels?

Unfortunately, the fast-moving balls in this development game have taken the public's eye off the fundamental issues at stake. It's not development versus no development, jobs versus no jobs, housing versus no housing, but what kind of city do we want? Instead of debating this basic question, everyone's forced into the developer's court, where the pros are throwing hook shots and faking everyone out.

Another fast move by Ratner is to draw attention away from the real estate scheme behind the arena. Gehry's signature building would be accompanied by 4,500 apartments, 2.4 million square feet of office and retail space, and some 3,000 parking spaces at downtown Brooklyn's busiest intersection. What's really happening is the tail is wagging the dog. The New York Times, for example, titled its December 11, 2003 article "A Grand Plan in Brooklyn for the Nets' Arena Complex" but buried in the article is a revealing statement by Ratner that "it was not economically viable without a real estate component." In other words, the arena alone is a loser. This squares with the findings of most economic studies that sports facilities lose money and have to be subsidized. In this case, Ratner is still likely to benefit from public subsidies for the arena while making a killing on the larger deal. We'll never see these moves because they're being made in the private game Ratner is playing with public authorities.

Ratner hired big name basketball players like Bernard King to convince the public that the arena will give every kid a chance to be a pro, enhance their self-esteem, and cure asthma. But according to the local group Fans for Fair Play, "By stitching together a few Brooklyn Nets jerseys, having Bernard King show up at a press conference, and cloaking their scheme in syrupy Brooklyn Dodgers nostalgia, they believe we'll fall for a ruse using the seduction of a pro-sports team in order to build a massive real estate/commercial development."

Wind-up cheerleader Brooklyn Borough President Marty Markowitz marches around the borough claiming the Nets are the reincarnation of the Brooklyn Dodgers. Governor George Pataki and Mayor Michael Bloomberg are "on board" Ratner's bulldozer. Pataki sent the signal to his appointees on the board of the Metropolitan Transportation Authority, who own the rail yards over which most of the project will be built, that they should give it to Ratner - or at least that's the impression Ratner is giving us.

Mayor Bloomberg can hardly turn his back on Ratner's arena at a time when he's trying to finesse his proposal for a Jets stadium on the West Side of Manhattan using the same kind of fancy footwork. After all, bad stadium feelings can spread. On the West Side the real deal is the 28 million square feet of office space and 10 million square feet of apartments, not the green-washed "eco-friendly" football arena decorated with post-modern windmills. Another thing the two stadium proposals have in common is the fiction created by the developers that most fans will use mass transit instead of parking in the huge garages that will be available both on and off the sites.

Many Brooklyn community groups are mobilizing against the Ratner proposal. A full collection of articles and arguments pro and con may be found online. In an articlefor Gotham Gazette, the City Council person for the area, Letitia James, pokes holes in the arguments that the development will bring lots of jobs and affordable housing, while having a minimal impact on traffic, congestion and the environment. However, all the debate is still focused on Ratner's agenda, not the most important item -- what kind of city do we want for our children and grandchildren?

Ratner's Past Projects

While everyone's watching Forest City Ratner's fast passes, they forget the damage the company has already done in Brooklyn. Imagine that Ratner actually had to compete with other developers to get the land he wants. Imagine there is a competent public planning body to select the best proposal. The first thing they would look at is Ratner's most recent Brooklyn project, the Atlantic Center Mall. This shopping center looks and feels like a medieval fortress. It arrogantly turns its back on the surrounding residential neighborhood and is built for the quick entry and exit of shoppers in cars. The "public" space inside the mall is minimal, poorly equipped but well endowed with electronic and human surveillance. The streetscape around the building is like a concrete wasteland with a handful of trees. If being a good neighbor is a criterion for getting public support, Ratner would be in trouble.

Ratner's Metrotech is bad planning on a grand scale. This 7 million square foot 14-building complex in downtown Brooklyn is a classical suburban office mall. On one side the complex turns its back on the nearby Fulton Street, a bustling and popular venue for working people. On another side the six-lane Flatbush Avenue divides Metrotech from the Myrtle Avenue shopping strip in Fort Greene. Metrotech's interior green space isn't really used by the public at large but serves as a back yard for the corporate tenants.

One of the first planning principles for new downtown development should be the integration of the project with the rest of the downtown. If the Atlantic Center Mall and Metrotech are an indication of what Ratner's new development will be like, we'll have another segregated, wall-off enclave in a downtown where streets are increasingly clogged with traffic and polluted.

Tom Angotti is Professor of Urban Affairs and Planning at Hunter College, City University of NY, editor of Progressive Planning Magazine, and a member of the Task Force on Community-based Planning.

 

 

 

 

 

 

 

 

 

 

 

 

Public Subsidies Flowing Up the West Side


 Proposing to convert Manhattan’s west side from a low-rise, formerly industrial waterfront community into high-rise housing, office towers, and grand civic space is nothing new. Neither is controversy about whether public subsidies should be used, and whether any of the new housing will be affordable to the average New Yorker.

So perhaps it should not have been a surprise when Mayor Michael Bloomberg announced that the city would use $350 million from the Battery Park City Authority to help pay for the proposed Jets Stadium and Javits Convention Center expansion. Still, affordable housing advocates were stunned. They claim that the city is breaking a long-standing promise to use these funds for affordable housing. West Side stadium opponents were also dismayed, complaining that the publicly-subsidized stadium and related development will spell the end of Hell’s Kitchen. Meanwhile, the Bloomberg Administration claims that the stadium and related development are the highest and best use for the West Side.

The skirmish over the Battery Park City surplus is only the latest in a 40-year battle that serves as a lesson in how community development and real estate development interact in New York City.

Two-Thirds Of Battery Park City Was Supposed To Be Affordable Housing

In the early 1960s, the government began to plan a major new neighborhood in place of rotting piers along the southern section of Manhattan’s Hudson River waterfront. In a 1969 agreement that seems utopian today, Mayor John Lindsay and Governor Nelson Rockefeller pledged that two-thirds of the 15,000 apartments in the new Battery Park City would be affordable to families of low and moderate incomes. According to the development’s master plan, “one-third of these apartments are to be low-income, one third moderate-income, one-third conventionally financed units. The units will be thoroughly mixed throughout the project to create an economically and racially integrated community without enclaves of high or low rent housing.”

The development and operating costs for Battery Park City have been heavily subsidized by New York City taxpayers. The Battery Park City Authority leases the land from the city, and then sells land to developers, or charges rents and “payments in lieu of taxes” (which are called PILOTs) to landowners. The authority makes an annual payment to the city. However, over the past 20 years this payment has averaged just 20 to 35 percent of what the land would be taxed at under the city’s normal tax rate. This is why Lindsay developed the plan to make two-thirds of the housing units affordable. ''If you are going to use public land and public money, you have an obligation to be sure that it is racially and economically integrated or at least benefits people of all classes,'' according to then-Manhattan Borough President Percy Sutton .

Battery Park City Turns Luxury, With A Promise To Subsidize Affordable Housing Elsewhere

That obligation to develop an integrated community, however, was abandoned by the time Battery Park City was finished. By the mid-1980s, as the property market in lower Manhattan rebounded after the city’s fiscal crisis, it was agreed that Battery Park City would be an exclusive, luxury community – with very few affordable units (there are today around 325), instead of the 10,000 that had been promised. In place of those units, the city agreed to use $1 billion generated by the Battery Park City Authority to subsidize affordable housing elsewhere in the city.

In 1986, Governor Cuomo and the state legislature agreed to issue $400 million in bonds – backed by the Battery Park City Authority surplus – for 24,000 units of housing for people of low and moderate income, but it would be off-site. Far less resulted: $143 million of bonds were used to create 1,557 low-income housing units in Harlem and the Bronx, including the much-praised New Settlement Apartments.

In 1989, Mayor Koch signed a new agreement with the Battery Park City Authority – in which the authority agreed to give the city $600 million to pay for affordable housing around the city. The city agreed not to use any of the $600 million to substitute for existing city spending. Instead, it was supposed to be new money for affordable housing, beyond what the city would already have spent.

No Money For Housing

Mayor Bloomberg’s March 25th press release quotes Battery Park City Authority Chairman James Gill saying that “After fulfilling our commitment of providing $600 million to the City of New York for low-cost housing, the Battery Park City Authority is proud to work with Governor Pataki, Mayor Bloomberg and Comptroller Thompson for the joint purpose of expanding the Javits Center and providing economic opportunity for Manhattan's West Side.” To the claims of advocates like Housing First!that this was not true, City Hall spokesman Jordan Barowitz said “Through four administrations and 18 years, the city has allocated the Battery Park City money in the same way, and to claim foul now is sophism."

Sophism perhaps, but certainly not a new claim. A 2000 study by City Project concluded that while the Battery Park City Authority had paid several hundred million to the city, none of that money had produced any identifiable housing. Instead, the money has simply gone into the city’s general revenue, helping it to balance the budget. The City Project report concludes: “The 30-year history of the Authority confirms in several respects a common criticism of public authorities … Although created to serve a public interest, they largely benefit narrow private interests at huge public cost. The primary public purpose of the Battery Park City Authority was to fund a substantial number of affordable housing units in New York City. With one modest exception, the State, City, and Authority have collectively failed to meet that public goal.” (See Public Authorities by Glenn Pasanen, who was the author of the City Project report, and Gail Robinson)

This criticism is not leveled only by advocates. Meyer Frucher, president of the Battery Park City Authority from 1984 to 1988 and later CEO of the Philadelphia Stock Exchange told The New York Times in 2001 “I am terribly disappointed. I think it has been a breach of faith.” . And even mayoral candidate Michael Bloomberg called in 2001 for “renewing the promise of Battery Park City to support affordable housing.”

But three years later, it is the Jets who stand to benefit. From the Administration’s point of view, the key feature of the Battery Park City surplus is that it can be given to the Jets without any approvals from the City Council. And with 60 percent of New Yorkers opposing using public money for the Jets’ stadium, and a growing number of City Council members opposed, that flexibility may be needed.

West Siders see an even greater irony here. Harvey Epstein, Associate Director of Housing Conversation Coordinators claims that “the stadium and related plans for the redevelopment of Hell’s Kitchen will displace existing low-income tenants, and take away the option of space to build many more units of affordable housing in the years to come.”

If you are keeping track for the next 35 years, the Department of City Planning has indicated that there will be 1,500 units of affordable housing amidst the 20 to 40 million square feet of commercial, residential, convention, sports, and open space development on the Far West Side in the coming decades. No word on whether any of them will be funded with future revenues from Battery Park City, or from the Jets.

Brad Lander is the director of the Pratt Institute Center for Community and Environmental Development, and former executive director of the Fifth Avenue Committee.

Affordable Housing in 2004



Bloomberg's New Marketplace: housing rehabilitation on East 129th Street.

Vincent Byron, 52, has seen a lot over the 30 years that he has lived at 54 East 129th Street in Harlem, much of it bad -- drugs, prostitution, and so many assaults that the street got a nickname: "They used to call this block 'Gunsmoke,' because someone got shot every day." It is no surprise, then, that many of the buildings on the block were burned out and boarded up.

That is no longer true. The building he lives in has been completely rehabilitated, each apartment having expansive rooms with big windows, modern kitchens and shiny hardwood floors. What's more, last month Byron and his neighbors bought the building from the city, for a total of just $4,500, in return for promising to keep the apartments affordable.

"It's beautiful to me," said Byron, now the super of the building. "No one believed this could happen - not even the people in the building."

More than a year ago, Mayor Michael Bloomberg cited Harlem as a prime example of a community renewed thanks to both public and private investment in housing, when he announced his ambitious new housing plan for the city, which he called The New Marketplace, a five-year plan to create or preserve 65,000 apartments, at a cost of $3 billion. It included a steep rise in funding for the Tenant Interim Lease program, the program that enabled Byron and his neighbors to fix up and buy the building.

"This commitment demonstrates that, even in these difficult budget times," the mayor said then, "the city is not walking away from the job of funding affordable housing."

But the Tenant Interim Lease program is scheduled to come to an end before the end of the decade, when its funding will be cut off after some 20 years of transforming more than 20,000 apartments -- 20,000 when at least 100,000 more are needed within the next few years "even to start meeting demand," according to Oculus Magazine's special issue on affordable housing in New York.

In the 16 months since the mayor unveiled his plan, in December, 2002, construction has started on about 1,200 of the apartments. Meanwhile the need for affordable housing has become even more desperate -- and the barriers to get it have grown higher.

Last week, in the City Council's response to the mayor's proposed budget for 2005, it put a priority on the construction of affordable housing, with several proposals to expand some programs and create new ones. But their ideas for funding these proposals – primarily the reintroduction of a commuter tax, which the state legislature would have to approve, something it is very unlikely to do – in effect point to the problem without really solving it.

CAUSES

There have been three recent developments that have made things worse.

Cutback in "Section 8"

The Bush administration has proposed drastic cuts to the federal rent subsidy program known as "Section 8." People on Section 8 get help with rent in one of two ways. In Section 8 housing projects, tenants pay a share of the rent – not more than one-third of their income; the government picks up the rest. Others who qualify for Section 8 subsidies receive vouchers they can use in apartments owned by private landlords who accept Section 8 tenants. Already, some of the 30,000 private landlords who accept Section 8 are fed up with its bureaucracyand are opting out of the program, while almost 140,000 low-income New Yorkers who qualify for this rental assistance are on a waiting list that closed almost a decade ago. In the budget Congress passed for the fiscal year starting in July, the people waiting can probably give up: New York City would lose as many as 30,000 vouchers by 2009, according to an analysis of the cuts.

Mitchell-Lama Buy-Outs

There is an accelerating number of housing developments “buying out” of the Mitchell-Lama program, which had provided financial assistance to help developers construct apartment buildings in exchange for keeping the apartments affordable. Since 2000, ten housing developments with about 3,500 apartments have left the program; now, 11 more are in the process of leaving. As many as 15,000 apartments that have been kept affordable by Mitchell-Lama, according to a report(in pdf format) by the City Comptroller, may soon be too expensive for the middle income people who have lived in them for decades.

Erosion Of Rent Regulation

At the same time, the city continues to lose thousands of rent stabilized apartments to luxury decontrol, a 1997 change in the law that allows landlords to take apartments out of rent stabilization when their rents reach $2,000. Housing advocates failed last June to convince state legislators to rescind luxury decontrol and an estimated 100,000 affordable apartments have been lost since the law was passed.
These specific problems exacerbate three long-term trends:

Rise in Population

The problem is clear in the numbers provided by such reports as NYU’s State of New York City’s Housing and Neighborhoods and the Census Bureau’s Housing Vacancy Survey. Though the number of people living in New York City reportedly increased by almost 700,000 from 1990 to 2002, the city saw fewer than 100,000 new apartments built in roughly that same period.

Although it varies according to neighborhood, the demand for affordable housing, then, simply outstrips the supply available. Since the 1960s, the number of apartments built in New York City has steadily declined. This trend was reversed last year, 2003 seeing more new construction, and there are indications that this will be the case this year as well. Most of the new building, though, is of luxury apartments, unaffordable to at least 80 percent of all New Yorkers.

High Construction Costs

If the demand is there, why isn’t more housing being built that the average New Yorker can afford?

The cost of building in the city is the highest in the nation, significantly more than in many other cities, according to one report. A variety of factors make this so:

  • land in the city is expensive
  • construction materials are expensive
  • the rules governing construction are complex
  • labor costs are high
  • Taxes and fees on building increase costs
  • Corruption costs, too.

 

Fall-off In Government Funding

One definition of affordable housing is housing in which a person is spending no more than a third of his income on rent. But affordable housing has traditionally had another meaning as well -- housing that is built with government funding or government-sponsored incentives (usually tax breaks) for developers. Government has virtually gone out of the business of building housing itself, called public housing. But it now also is cutting back sharply in providing incentives for private developers, or subsidies for individual tenants.

"Right now, there is a housing crisis throughout the nation, especially in the Northeast, because of a fall-off in outlays from both federal and state governments," said Charles Lyons, the president of the National League of Cities. "There is not even a conversation happening."

Affordable housing is particularly losing out in the competition for federal dollars.

"In the way the appropriations are passed, funding to the Department of Housing and Urban Development is included with veterans' benefits and NASA,” said Jon Sheiner, a legislative aide to Representative Charles Rangel. “Which do you think is going to win – veterans' benefits or housing?”

“The picture is very, very negative,” said Victor Bach, senior housing policy analyst at the Community Service Society. “I think the federal government has to get back in the business of providing affordable housing. The city and state need to understand the dimensions of the crisis, the kind of loss that will occur, the displacement and how it will increase pressure on the homeless system.”

CONSEQUENCES

Almost a quarter of all households in the city pay more than half their income on rent. But the lack of affordable housing does more than hurt individuals economically. Having less affordable housing affects the city because, for example, it directly results in more homelessness.

"Homeless families are staying in the shelters longer – at a great cost to the city," said Judith Goldiner, a Legal Aid Society attorney who works on housing issues. Almost 40,000 people – a record – are in city shelters on any given night. Helping homeless families costs the city about $3,000 per family per month.

There is a rise as well in overcrowding. While some families are taking smaller apartments because that is all they can afford, others are doubling up apartments in order to share the cost of a high rent. There is also an increase in the number of illegal apartments, some of them in spaces that were not built to be used as housing, such as basements and garages and attics.

“It’s not just a matter of cost,” said Joe Weisbord, staff director of Housing First!, an advocacy coalition. “Poor housing conditions and homelessness have a direct and serious impact on educational attainment, health and success in the work force. There are real costs at stake here.”

The lack of affordable housing also hampers the ability to attract new businesses, and to retain old ones. And, says Charles Lyons, "if your police, firefighters and teachers cannot afford to live in your community, how can you even call it a community?"

PROPOSED SOLUTIONS

There are at least three facts on which housing advocates agree. The first is that the city needs help from the federal government and from New York State in order to meet the needs of affordable housing.

The second is that it makes sense for government to be involved: “In study after study, government investment in housing produces a nine-to-one return,” said State Senator Liz Krueger, who represents the East Side of Manhattan and is the ranking Democratic member of the Senate Standing Committee on Housing, Construction and Community Development. “You create construction jobs; you keep people housed. It’s a win-win situation from the perspective of both public policy and economic policy.”

The third is that adequate support will not be happening anytime soon. "How do you build affordable housing in a society that has no commitment to financing it?" asked Bruce Dale, of the Community Preservation Corporation, a private local financer of affordable housing. "It's largely a question of political will."

But advocates, though they have critiqued Bloomberg's plan, appreciate the city government declaring affordable housing as a priority: “Under the Giuliani administration, the city was saying we’ve solved the housing problem in the city,” said Irene Baldwin, executive director of the Association for Neighborhood and Housing Development, a consortium of housing organizations. “At least now they are acknowledging the problem.”

And, as the urgency for affordable housing grows, several ideas for solving the problem seem to be getting more attention.

Stem The Loss of Affordable Apartments

Hundreds of thousands of apartments in New York City fall under some type of regulation that prevents landlords raising their rents to market rates. The mayor is asking state legislators to pass laws that require the apartments that leave the Mitchell-Lama program to be put under rent stabilization, which would prevent landlords from dramatically increasing rents on the apartments. The mayor’s proposed legislation could also protect almost 40,000 other apartmentsin buildings that were constructed in the 1970s with help from the federal government.

Some see rent regulation as part of the problem, saying that it acts as a disincentive to build affordable housing. Others say this simply isn’t true, pointing to reports from the city’s Rent Guidelines Board that rent-stabilized buildings are profitable for their owners and have gotten more so over the last 10 years.

Give Large Apartments To Large Families, Low-Rent Apartments To Low-Income Renters, Etc.

At least one developer of affordable housing believes in “rationalizing” the use of affordable apartments in order to free up thousands of affordable apartments. In public housing, for example, almost 40,000 apartments are “under-utilized,” a spokesman for the New York City Housing Authority said, occupied mainly by tenants who have raised families but now live alone in apartments with two or three bedrooms.

Similarly, in rent stabilized apartments, some large apartments with low rents are being occupied by people who have enough income to afford to pay more.

Mark Alexander, who has been involved in building affordable apartments for almost 30 years, said efforts should be made to assure that only people who really need affordable apartments actually get them. Alexander admitted his was not a politically popular point of view.

Others put it more strongly: "Is he heartless and cruel enough to go up to someone who is 70-something years old and say get out?" asked Howard Marder, the spokesman for the housing authority.

Use New, Cheaper Construction Materials

If construction costs were lower, developers said they could build more affordable housing. "Right now, the price of steel has doubled in the last year, and so has the price of copper," said Jeffrey Levine, of Levine Builders. If the city’s building code allowed the use of new, cheaper materials, Levine said, costs would be lowered.

Change Zoning

Some developers said that the most effective way the city could help them would be to allow them to build more housing on the land available. This means changing the zoning.

How land is used in the city is dictated by the city’s zoning code. On most of the land that is zoned for residential use in the city, developers can build one- or two-family houses. In areas where big apartment buildings can be built, "inclusionary zoning" allows a developer to build more apartments (in the language of planners, increasing "density") in return for a commitment to keep them affordable. (The affordable apartments do not have to be built on the site of the main development). It is called inclusionary zoning because it encourages developers not to exclude renters with lower incomes.

The Housing Development Corporation, a public corporation that finances the construction of affordable housing, has built 8,853 apartments using inclusionary zoning since 1987. In these “80-20” buildings, 80 percent of the apartments lease at market rents and 20 percent are reserved for families of low and moderate income.

“Nothing is going to change in terms of the costs of materials, union labor and land,” said Hugo Subotovsky, a developer who has built affordable housing in Manhattan and the Bronx. “These are political issues that are probably going to get worse. But if you create more square feet it will amortize the cost of land. We should work very closely with city planning to improve zoning."

The Department of City Planning has proposed allowing inclusionary zoning in several areas of the city where it has not been used before, including parts of West Chelsea and the far West Side of Manhattan.

Inclusionary zoning has its drawbacks. In some small-scale neighborhoods, residents have balked at the idea of big apartment buildings even if those buildings would help solve the affordable housing problem.

Not Lacking In Ideas

There are many other ideas. The New York chapter of the American Institute of Architects, for example, last year put out a report entitled “Ten Steps To Create More Affordable Housing In New York City”(in pdf format), which recommends specific changes in the building code and the zoning resolution (such as eliminating some requirements for parking and allowing for the construction of smaller studio apartments) -- changes that could be accomplished “without significant public funding.” The National League of Cities offers “Practical Approaches To Affordable Housing Challenges” (in pdf format) and PolicyLink, a national nonprofit organization, offers an "Equitable Development Toolkit”

"It’s not like there is a lack of ideas that could work," said Senator Krueger. “We just don’t seem to be able to get people to understand that, for the future of the city and other areas in the state, we need housing for people to live in."

Joe Lamport, Gotham Gazette's housing topic page writer, is assistant director of the City-Wide Task Force on Housing Court, a coalition of community housing organizations.



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