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Affordable Housing More Complex than a "Poor Door"

To understand "affordable housing" in Manhattan, you must understand our housing market.  Manhattan is a unique place in the real estate universe. Not only does it have a large rental market (approximately 75% of the available housing units vs. about 5 - 10% in other markets), but it has  housing ownership and other important differences that are unique often puzzling and peculiar.

Approximately 70% of the housing inventory available for ownership in Manhattan are in coop apartments that converted from rental buildings. Coops are private corporations governed by a board of directors that can pick and choose who can live in their building. The coop board has the right to reject any potential purchaser for any reason other than housing discrimination although they are not required to give a reason for rejecting a purchaser. The rest are condos, and townhouses. 

Most new construction developments are condos or rental buildings. It's important to understand our peculiar housing market to understand the complexity, history and politics of "affordable housing" in NYC.

 Low income rental section
Mayor De Blasio’s Housing Plan
Housing New York: A Five Borough, Ten Year Plan 
defines Affordable housing in NYC by the Area Median Income (AMI) as follows: 

Extremely Low Income (0-30% of AMI)
Very Low Income (31-50% of AMI)
Low Income (51-80% of AMI)
Moderate Income (81-120% of AMI)
Middle Income (121-165% of AMI)
    
The NYC Department of Housing Preservation & Development (HPD) is the City’s lead housing agency.
HPD does not market rent or sell apartments but HPD requires that subsidized apartments be rented through an Open Lottery System to ensure fair and equitable distribution of housing to eligible applicants.
 



With so few affordable apartments even qualified applicants still have to win a lottery. Some "affordable" buildings such as Penn South a limited-equity housing cooperative development located between Eighth and Ninth Avenues and West 23rd and 29th Streets, in Chelsea opens it's 14 to 15 year waiting list with a new lottery every ten years or so. You need to win the lottery to get on their 14 year waiting list. 
West 62nd Street entrance to rental building segment

The NY POST, who's owner billionaire Rupert Murdoch recently paid $57.25 million for a new Manhattan condo with  a separate private "ULTRA RICH elevator separated from "RICH" elevator never the less is the local NYC Madame Defarge selling papers by channeling populist rage with the headline and artist renderings of a luxury new building on Riverside Boulevard with captions: “RICH DOOR on Riverside Blvd.” and “POOR DOOR in back alley.”

The NY Post article has been picked up and mimicked all over the world. "The rich and poor residents of a building on Manhattan’s Upper West Side, in a high-end development called Riverside South, will have to use separate entrances to their homes."

The "affordable" rental section of the development will have an entrance on West 62nd Street.

It was interesting hearing the term used by local politicians since they know the game. They play the game. They make the rules. The city and state give out tax incentives to developers in exchange for building affordable housing units, parks even subways stations.  NY state is running a $multimillion ad campaign "NY State Open for Business" promoting tax incentives to businesses offered by the state.

NYC property taxes are complicated and difficult to figure out but owner's of condos and coops pay a much higher tax rate than owner's of houses. The co-op tax abatement was created in 1996 to help eliminate the significant disparity in taxation between co-op and condo apartments, which are generally assessed and taxed at 45 percent of market value, and single, two- and three-family homes (mostly in the outer boroughs) which are assessed at 6 percent a year.

While most coops and condo owner's have been receiving a 17.5% tax abatement since 1996 the law was changed last year.  The new law only allows the tax break only on a primary residence. Pied-à-terre, or units held solely in a trust or by a limited-liability company, no longer qualify.
The tax benefit (421A) bestows property tax breaks for up to 25 years on new multifamily buildings.  It was put in place in the 1970s to spur development. The idea was that developers received a tax abatement passed on to owners in new developments in exchange the developers gave back to the city by building a public space and/or affordable housing units.

To be eligible for 421-A in prime Manhattan neighborhoods, developers had to include affordable housing, at least 20%. The 80/20 model has been used by developers primarily on rental buildings for decades.  A developer could build a luxury building on Upper West Side and build affordable housing in the Bronx to get the tax abatement. Prior to 2007 421-A tax abatement's were given to practically all new construction. 

In 2007, Mayor Bloomberg cracked down on 421-A. The tax breaks were applied to more NYC neighborhoods, including upper Manhattan and the outer boroughs. Developers could no longer build affordable housing in outer boroughs but had to build in same community as the luxury building.  The inclusionary housing mandates that the affordable units be in a separate building, in the same community or they can be clustered in what the city calls a building “segment,” which then has to have a separate entrance. Hence "Poor Door" 


The Ashley Market Rental building



The Ashley 400 West 63rd Street
Regardless of income renters and owners are often separated by a different door, separate building or segment of a building when a development has both a rental component and condominium. Hotel condos have separate entrances for condo owners and hotel guests. 

In fact right next door north of 50 Riverside Boulevard is The Alden at 60 Riverside Boulevard built by the same developer Extell. Right behind the Alden is it's sister rental building, The Ashley with a separate entrance at 400 West 63rd Street "the so-called back alley" The market rate rental apartments in the Ashley primarily have north, south and east views. The Alden condominium with the entrance on Riverside Boulevard features many units with west facing direct Hudson river views.






In the 1940's 50's and 60's the government built affordable public housing called "Housing projects".  NYCHA was created in 1934. There are deteriorating housing projects all over the city. The Riverside south project is located between Riverside Boulevard and West End Avenue. An exciting new neighborhood that didn't exist 15 years ago.

One block east of West End Avenue is Amsterdam Avenue. Amsterdam Houses a NYCHA housing project has 13 buildings, some 6 and some 13-stories high on 9.49 -acres. The 1,080 apartment complex houses an estimated 2,382 persons. It was completed in1948 located across Amsterdam Avenue from Lincoln Center and is bordered by West 61st and West 64th Streets, from Amsterdam Avenue to West End Avenue in Manhattan.

13 building housing project | Amsterdam Houses

Amsterdam Houses

















Amsterdam Houses were built more than a decade before the vast urban renewal program in the 1960's that included the new Lincoln Center for the Performing Arts and the eight Lincoln Towers buildings on 20 acres in the west 60's between West End Avenue and Amsterdam.

A separate door for the low income subsidized rental section of a brand new luxury condo located in a prime location or the alternative a door to a NYC Housing Authority project. In my opinion inclusionary housing with mixed incomes in new developments from the private sector in a new neighborhood is the future of affordable housing and a better option for new generations of low income New Yorkers than public housing projects from a bygone era. 

Bottom line 55 brand new affordable units available for low income households previously not available. I applaud Mayor Bill De Blasio's ambitious plan Housing New York:  A Five Borough, Ten Year Plan, to build and preserve 200,000 housing units, including 50,000 new affordable housing units. I hope he accomplishes this goal.

I hope more affordable housing becomes available for Moderate Income (81-120% of AMI) and Middle Income (121-165% of AMI) A "Middle/Moderate Door" and more affordable housing programs for  home ownership. 

Photos courtesy of: ©Mitchell Hall

More reading about affordable housing home owner opportunities:

HDFC Coops | Affordable Home Ownership
HDFC Coops | Facts vs Myths
HDFC Coop Income Standards
NY Tax Abatement's for Going Green
421-A Tax Abatement
HDC Affordable Condos & Coops


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