WSJ: Mayor's Housing Plan Threatens Park Slope But Won't Help East New York

Mayor de Blasio’s housing plan won’t bring affordable units to low-income areas but it will destroy the character of the most expensive neighborhoods in Brooklyn, said housing experts — including real estate execs — in a Wall Street Journal article yesterday. Here are the deets:

*In low-income areas such as East New York, no one is building market-rate housing now and no one will build market-rate housing in the future, even if the mayor succeeds with his plan to upzone the area to allow bigger and taller buildings, because the math just doesn’t pencil out.

*Meanwhile, the mayor’s plan would work beautifully in higher-income areas such as Park Slope and Williamsburg — except that Bloomberg-mandated “contextual zoning” height caps make it impossible.

Mayor de Blasio is pushing to wipe out those hard-won height caps with a “text amendment” to the building zoning code (as we mentioned in yesterday’s article about the zoning controversy in Prospect Lefferts Gardens). If he succeeds, new buildings and additions 15 to 30 percent higher than what is allowed now will quickly sprout throughout Brooklyn’s most expensive and tony areas and beyond, from Cobble Hill, Park Slope, Williamsburg, Fort Greene, Clinton Hill, Bed Stuy, Crown Heights, Prospect Lefferts Gardens — anywhere land is expensive and prices and rents support luxury development. Only the landmarked areas will be safe. (Above, a row of worthy but unprotected houses on Decatur Street in Bed Stuy, part of the proposed Stuyvesant East Historic District.)

Will wealthy neighborhoods be able to fight the plan? “In neighborhoods that can sustain higher rents, neighborhoods that are often wealthier neighborhoods…have a lot of political capital,” said the executive director of the Association for Neighborhood Housing and Development.

That may be, but time is running out. This massive change was buried in a complicated document about the Mayor’s housing plan that few community boards or housing groups seem to have noticed until this week. Now they have just two weeks to comment.

Anyway you slice it, developers will need subsidies to build in low-income areas, said the story. Here’s the  math:

For developers to make money after construction costs on a high-rise building that is entirely market rate with no tax abatement, tenants would need to pay about $3,600 a month for a one-bedroom, according to the Furman Center. In East Harlem the median asking rent for apartments in new buildings is $2,295 a month, according to StreetEasy, a real-estate data company. “If you’re in Union Square you can build anything you want because the rents pay for it,” said David Kramer, a principal at Hudson Companies, which develops affordable and market-rate housing. “Then you go out to Astoria and you can’t be too fancy. Then you go to East New York and there’s no new construction of market-rate housing at all.”

What can be done?

Some Pick at Math in Housing Strategy [WSJ]

Update: The City has always planned to jump start the building of new housing in East New York and other low-income areas with subsidies, which is why HPD’s capital budget was doubled, a spokesman for the mayor told us. Also, the process of public review for major changes to the zoning code is similar, although not identical, to the land-use review process. Right now we are in the “scoping period.”

City Planning kicked off the public review for scoping with the release of the Draft Scope of Work for the Environmental Impact Statement in February. Public comment was taken at the City Planning public hearing yesterday, and will be accepted in writing through April 6. As soon as City Planning prepares a draft environmental impact statement and completes its application, the official public review period will begin. It is expected to last approximately seven months.