Are Larger Market-Rate Apartments in Brooklyn Marine Terminal Plan Key to the 40% Affordability Promise?
Below-market apartments are smaller. So, they might occupy less than 40% of the square footage--at least if the city's placeholder assumption is borne out. Same for the revised Atlantic Yards?
The devil is in the details, as one of my Atlantic Yards mantras goes. Same for the recently approved Brooklyn Marine Terminal redevelopment plan, involving a 122-acre waterfront site in Red Hook and the Columbia Street Waterfront.
A tantalizing statistic buried in BMT documents might explain how project proponents were able to promise 2,400 affordable units (40%) along with 3,600 (60%) market-rate ones.
According to the footnoted assumption below, the project’s 6,000 apartments would average 1,100 square feet, a rather large figure for New York.
If so, that suggests the market-rate units would be larger than the affordable ones, taking up far more than 60% of the residential space.
A key caveat
That, however, deserves a caveat. The 1,100 square foot average likely refers to gross square footage, which includes everything between the exterior walls (though not necessarily lobbies). The gross square foot assumption wasn’t explained in the document, but confirmed in a separate document released after the project approval.
Still, affordable units are generally smaller than market-rate ones. As one city affordable housing term sheet suggests, even a four-bedroom affordable unit1 would max at 1,075 net square feet. (Unlike gross square feet, net square feet measures the functional space between the walls.)
Net square footage may be 20% less than gross square footage, according to this source.
So apartments averaging 1,100 gross square feet, subject to a 20% cut, would average 880 net square feet. Given the affordable unit sizes above, with only three-bedroom ones exceeding 850 square feet, surely market-rate units would be larger—though not as dramatically as the gross-vs.-net comparison suggests.
Bottom line: if this assumption holds true—that a development plan can promise a larger percentage of below-market apartments while devoting a disproportionate amount of space to the market-rate units—then it could recur with other projects, such as the upcoming rebooted plan for Atlantic Yards.
More caveats
That 1,100 square foot assumption—which appeared only late in the BMT process—is not set in stone, according to the New York City Economic Development Corporation (NYCEDC), the BMT plan’s sponsor. My queries below got responses from spokesman Jeff Holmes.
Q: Can you share an average anticipated square footage for the affordable units, and separately for the market-rate units?
A: To be clear, the assumption that housing units are 1,100 square feet on average is a technical assumption for the purpose of a square foot calculation. At this moment in the project, we do not know the size distribution of individual housing units. These will be determined closer to the commencement of development, and will be informed by market demands and city policy at the time.
Q: In the case of BMT, is it possible that the 40% affordable units will occupy no more than 25% of the floor area?
A: NYCEDC has not studied or considered whether the affordable units could fit into 25% of the floor area.
Q: Do you have a minimum square footage, in percentage of floor area, for the affordable units?
A: We don’t have that right now.
So that doesn’t rule out the possibility, or likelihood, that the affordable units would occupy less than 40% of the floor area. But we don’t know how much.
New details
The recently released BMT Draft Scope of Work for an Environmental Impact Statement indicates 6,000 apartments occupying 6,738,975 gross square feet, or about 1,123 square feet per unit.
By contrast, the 2006 Final Environmental Impact Statement for Atlantic Yards assessed 6,363,000 gross square feet for 6,430 units, or 990 square feet per unit, with a note that an unspecified portion of the residential (and retail) space would go to community facilities.
That’s about 10% smaller than the BMT assumption.
I reported that at the 595 Dean two-tower (B12/13) complex, applicants found the below-market apartments significantly smaller than the market-rate ones, though some said that it was still worth it.
Skepticism, Part 1
Though the issue of apartment size wasn’t discussed publicly, as far as I know, Columbia Street Waterfront District resident Randy Gordon, who’s looked skeptically at the BMT plan’s finances, raised it in correspondence with the NYCEDC and with me. (He’s a board member of the newly formed Columbia Street Waterfront Association.)
Gordon told me he first noticed the 1,100 square foot figure in a draft of the BMT Vision Plan (see p. 11) shared at the May 22 meeting, a year after the project was announced. At that point, the unit size assumption was associated with 35% affordable housing.
In early September, Gordon wrote NYCEDC, citing the limited size for affordable units, based on existing term sheets, and noting that the condominiums in the BMT plan, if they follow the model of Pierhouse at Brooklyn Bridge Park, could be very large, averaging over 2,200 square feet. (The number of condos in the BMT plan has not been specified.)
He didn’t get a response, and the distinction between net and gross square feet wasn’t raised. Still, that public discussion should’ve happened before the final vote, which was three weeks after his letter.
Skepticism, Part 2
A commenter on a Sept. 29 essay for Streetsblog by Brooklyn Community Board 6 District Manager Mike Racioppo, Why I Voted ‘Yes’ on the Brooklyn Marine Terminal Vision Plan, also addressed the square footage issue, writing:
More importantly, however, it also tells us that the formula used to allocated the affordable units will follow “Option 1” of the City’s “Mandatory Inclusionary Housing Law.” What it does not tell you is that Option 1 only requires 25% of the floor area be allocated to affordable housing.
By now you should be asking yourself , “hey wait a minute, how can they give away 40% of the units and only use up 25% of the floor area?” Answer: make the small units, specifically the studios and one bedrooms, located on the low floors… the “affordable” units. This means the larger ‘family-sized’ 2 and 3 bed units will all be full market rate. Poor and working class families need not apply.
That’s not accurate, since the Vision Plan promises a “proportional share of the affordable units” as larger units. (Nor is the commenter accurate in saying Option 1 “lets you rent the remaining 90% of your so-called affordable units at 100% of AMI,” since that wouldn’t average at 60% of AMI.)
But the commenter does raise a key question. Yes, Option 1 requires only 25% of Floor Area and generally reflects 25% of the units. If 40% of the units occupy 25% of the Floor Area, that violates the spirit, if not the letter, of Option 1.
Would they? NYCEDC’s Holmes said they hadn’t studied or considered it. The issue should very much be up for discussion.
The commenter also observed, more convincingly, that, if only 10% of the affordable units are low-income, it’s likely those 240 apartments would go to the 250 existing NYCHA households promised spots in the new development.
Funny BMT numbers
The Sept. 30 Vision Plan deserves a closer look, because some claims are unreliable:
Two BMT districts—BMT North and Atlantic Basin—totaling a maximum of approximately 6,000 units of housing, including a minimum of 2,400 permanently affordable units (40 percent of total residential units) at an average AMI [Area Median Income] at or below 60 percent overall, with at least 10 percent at 40 percent of AMI and no units to exceed 100 percent of AMI, and otherwise mimic Option 1 of the City’s Mandatory Inclusionary Program.
The plan, though, can get fuzzy:
A $75 million fund to support off-site affordable housing preservation and/or creation within Community Board 6 (CB6) that would preserve approximately 675 units when combined with other potential capital sources
$200 million in funding for NYCHA Red Hook Houses East and Red Hook Houses West that would preserve approximately 575 units when combined with other potential capital sources, 200 affordable units reserved at BMT for NYCHA Red Hook Houses East and Red Hook Houses West residents, and 50 affordable units reserved at BMT for NYCHA Wyckoff and Gowanus Houses residents
Together with the commitment of a minimum of 40 percent permanently affordable housing units on the BMT site (or 2,400 units), the $200 million NYCHA Red Hook investment and $75 million CB6 fund will preserve or create approximately 3,650 affordable units, or approximately 60 percent of the 6,000 units at BMT
(Emphases added)
Wait a sec. Of the claimed 3,650 affordable units preserved or created, 2,400 would be new construction.
For the other 1,250 units, they count the $75 million fund to preserve about 675 units and the $200 million fund to preserve about 575 units. However, those require “other potential capital sources,” which are by no means guaranteed.
Those funny numbers were amplified in Racioppo’s essay:
[The plan] also includes $75 million for affordable housing in Community District 6 and $200 million for repairs at Red Hook Houses. These commitments will build more than 3,600 affordable units, representing approximately 60 percent of the total housing.
Note how “preserve or create” got transmuted into “build.”
Atlantic Yards lessons, Part 1
Both supporters and detractors of the BMT plan have invoked Atlantic Yards. Racioppo wrote:
Just as important, housing will be built concurrently by multiple developers, with family-sized units required across both affordable and market-rate apartments. These are hard-won protections designed to avoid the mistakes of Atlantic Yards.
Yes, one mistake of Atlantic Yards was a limited number of larger apartments. According to the Affordable Housing Memorandum of Understanding negotiated with the advocacy group ACORN, 50% of the floor area was reserved for two- and three-bedroom apartments. (That MOU was later incorporated in the unenforceable Community Benefits Agreement.)
In its contracts, New York State allowed a much longer leash. For example, the 461 Dean St. (B2) tower doesn’t have three-bedroom units.
With the BMT plan, a minimum of 25 percent of the housing units—in unit count, according to Holmes—will be two and three bedrooms.
Another Atlantic Yards mistake has been reliance on a single master developer. So if the BMT plan avoids that, that’s a plus.
Atlantic Yards lessons, Part 2
Racioppo also wrote:
Equally important is governance and accountability. Community Board 6 will be the first community board in New York City with a binding seat on a development corporation. That matters. It is not just a seat at the table that can be pulled away, but a guaranteed role in shaping and monitoring the plan over the next 15 years. The plan also allocates funding for legal support, enabling CB6 and other stakeholders to enforce commitments, particularly those related to affordable housing. This is a clear break from Atlantic Yards, where promises evaporated and accountability failed. Here, enforcement mechanisms are built in.
I’m not as confident about the value of legal support. The document states:
NYCEDC commits to funding third-party legal review of the draft BMTDC [Brooklyn Marine Terminal Development Corporation] entity documents including its mission, purpose, responsibilities, by-laws and governance procedures, to enable BMTATF [BMT Advisory Task Force] and local elected officials to have meaningful input into the documents prior to their adoption. (Phase 1)
That’s the only mention of legal support. Yes, that’s a valuable commitment, and one that would be worthwhile for Atlantic Yards as a revamped plan emerges.
However, that’s not the same as legal support to enforce commitments. As we’ve just learned with Atlantic Yards, if the governing agency does not want to enforce a commitment, such as the penalties for unbuilt affordable housing, it won’t do so.
The Brooklyn Marine Terminal Development Corporation (BMTDC) would be controlled by the mayor, with 12 of 23 votes. In June, as I wrote, Brooklyn Borough President Antonio Reynoso warned that board would be run by the mayor, who could decide not to pursue accountability.
His warning came in the wake of statements that this structure would help avoid the fate of Atlantic Yards. Despite that, Reynoso later agreed to support the project, given a promise to consider adding port uses.
Atlantic Yards lessons, Part 3
Assemblymember Jo Anne Simon, in her Streetsblog piece, Why I Voted ‘No’ on the Brooklyn Marine Terminal Vision Plan, has more Atlantic Yards experience than most. She wrote:
The next step is the General Project Plan, which has even less public input. This is especially concerning given the ESD’s [Empire State Development] record of opacity. Much of the affordable housing at Atlantic Yards has yet to be delivered in large part because no feasibility study was done before the GPP was created. ESD just believed the developer’s promises and has failed to hold them accountable. BMT is moving to the same state General Project Plan process that Atlantic Yards went through; that’s cause for concern.
In some ways, it’s worse. ESD attempted to ratify the developer’s promises by contracting for unreliable reports from the consultant KPMG.
Racioppo cited third-party legal review of framing documents. The record suggests a need not just for that but also for third-party review of financial studies, as the coalition BrooklynSpeaks, which Simon supports, has requested.
Simon also noted “the disheartening lack of courtesy, transparency and meaningful community engagement in this process.” That was since borne out in an astonishing Brooklyn Eagle account, based on leaked video, of the final vote.
Another caveat
The slide below (which Gordon pointed me to), from a March 14 BMT task force document, cites the challenges of producing affordable housing.
Notably, the pipeline for low-cost financing (Volume-Cap Bonds) from city and state housing finance agencies is said to be oversubscribed through 2030+. Also, direct city subsidies for affordable housing are scarce.
Those factors threaten any ambitious megaproject, like BMT or Atlantic Yards, and challenge future elected officials.
For family-sized apartments, the BMT plan focused on two- and three-bedroom units.
Regarding the topic of the article, your precise look at square footage is so insightful, truly making one wonder the broader implicaton for community.