Editorial: A pilot program in preservation

The city was quick to slam an independent report that said the affordability preserved in the property’s most recent sale was exaggerated (although this was without disputing the actual figures cited by the Independent Budget Office).

Measuring affordability through years rather than apartments, the IBO has calculated that the majority of apartments would have remained affordable even without a deal that cost the city $220 million.

Just whether or not the city got what it paid for remains to be seen, as is how stable the community will remain over the years with a combination of market rents, true stabilized rents and upper and lower lottery tier rents.

We don’t disagree with the argument following the report that some sort of commitment to the preservation of affordable units at Stuy Town was necessary as opposed to relying on Albany to protect rent regulations. (For the record the IBO didn’t say it disagreed with this, either.)

But the report is a reminder of the details of the “affordable” apartments, which is that they are, while reduced rent, affordable to some but not to all who could be considered middle income. The Stuy Town arrangement is very much a done deal but in the case of future lotteries in exchange for tax breaks and/or other giveaways for owners of multi-family properties, we would like to remind the city that middle income means different things to different people. Maybe it’s worth offering a few lotteries rather than two for very different income ranges. (We still don’t completely understand how rent based on 165 percent of the area median income is considered affordable, though to be fair, demand for the Stuy Town lottery was pretty high regardless. Even people who make a good living apparently could use some help paying the rent in a city where landlords think the sky’s the limit. And speaking of which, the use of air rights will also likely factor into future negotiations in a big way. The city must be very careful when determining how and when residents lose their views and light in exchange for landlords’ ability to build higher.)

We also suggest, in the future, giving preference for an affordable unit to existing residents. This didn’t happen in Stuy Town and we don’t understand why. It isn’t discriminatory. It’s practicality if the city means what it says about keeping a community stable.

Lastly, since landlords these days are more likely to offer incentives like free cable or gym memberships to remain competitive rather than lower their rents, there needs to be more lotteries in general.

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One thought on “Editorial: A pilot program in preservation

  1. I just have a tough time understanding the lottery amounts that constitute “affordability,” and how they preserve long term stability in the community. Let’s do some basic number crunching:

    If you get in via the lottery at $3000/month, that means you are paying $36000 for the year. Let’s look forward for the next 4 years at a 2% increase each year, equating to a 5 year data period.
    Year 2 – $3060/month, $36,720/year
    Year 3 – $3121.20/month, $37,454.40/year
    Year 4 – $3183.62/month, $38,203.49/year
    Year 5 – $3247.29/month, $38,967.51/year

    Now you look at those modest monthly increases and don’t think much about it. But the deeper underlying issue is the amount these “affordable” units are paying if they plan to live here for a longer period, hence creating stability. In this case, a person paying those rents would pay $187,345.40 over a five year period.

    You absolutely can not expect any middle-class person with any financial knowledge to remain here for the long-term when money like that is being wasted on something they don’t own, and $187k would be a very significant down payment to a very nice house.

    If this deal preserved affordability at the $1500-$2000 range, than I would believe that they intended to preserve affordable housing and stability.

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