« Bird Blog: Week 18 Open House Picks »

September 26, 2008

PACC Spins Out Another Affordable Housing Project

The Pratt Area Community Council has launched the website for its latest affordable housing venture called The Gates Cooperative. Located at 566 Gates Avenue between Tompkins and Throop in Bed Stuy, the five-story brick building will have 34 units, mostly 2 bedrooms. Construction is not complete yet (four months to go apparently). Here's how the 34 units break down: 11 two-bedrooms at $87,000; 10 one-bedrooms at $150 000, and 13 two-bedrooms at $157 000. There is no difference at all in the 2-bedrooms, only who qualifies income-wise. The prices were determined by Area Median Income (some at 80% of AMI, some of 110%). Other restrictions: Half the units are reserved for Community Board 3 residents, and there'll be two information sessions, one on September 29th, one on October 23rd, both at the Restoration Corporation on Fulton Street. As usual, he units will go through a lottery. — Rachel Chang
186 Washington Avenue [Corcoran] GMAP




Posted by Brownstoner at 12:29 PM | Comments (18)
Categories: Affordable Housing, Bedford Stuyvesant

Trackback Pings

TrackBack URL for this entry:
http://www.brownstoner.com/mte/mt-tb.cgi/6416

Comments

I've never gotten a clear idea about the RE-sale restrictions... if someone buys a place, are they similarly restricted on who they can sell to? What price they can ask for? Number of years to wait? and so on....

I'm in the magic donut-hole (not "poor" enough to get something like this and not "rich" enough to actually afford anything market-rate)

BUT - I am a voter and a tax-payer... I'm wondering about what my government is doing. Should I be supporting this sort of stuff?? Are these affordable home actually providing housing to people with lower incomes or are they simply for show? (i.e., Looks good on paper, but after 5 years no one with lower incomes lives in these places.)

I'm not attacking or judging here... I seriously just want to know what my tax dollars are doing. It's not that crazy to be a little paranoid about the state of gov't regulation (and lack of oversight) these days.

Posted by: tybur6 at September 26, 2008 12:41 PM

That's a lot of house there in Ditmas Park!!! The street looks great except for that one white monstrosity with the room thing growing out of the second floor!!!!!

Posted by: daveinbedstuy at September 26, 2008 1:16 PM

sorry...wrong thread

Posted by: daveinbedstuy at September 26, 2008 1:17 PM

Life isn't fair, tybur6, especially for the guys in the middle. Same deal when it comes to school scholarships.

Posted by: Atlantic Frantic at September 26, 2008 1:34 PM

Yeah... I know, life isn't fair. I was just pointing out my situation as a prefacing remark -- i.e., I wasn't looking to find out what the salary scales are.

I want to know what the rule are for resale.

I want to know if this is a waste of my tax dollars because the community isn't actually being served -- and this is just a gov't subsidized vehicle for displacing lower income people.

I want to know if I should be writing letters to my city and state officials asking for accountability. Or are there rules that would allay my fears.

Posted by: tybur6 at September 26, 2008 1:49 PM

Getting one of these apartments is like winning Lotto. After a brief mandatory residency period complete with tax abatements, the owners are free to sell at market rate.

Posted by: Chaka at September 26, 2008 2:02 PM

ty: I don't believe you can sell one of these places on the open market. You have to sell back to the sponsor. The sponsor resells under the guidelines. That doesn't mean the rules can't change in the future.

Posted by: giovannina at September 26, 2008 2:05 PM

The rules vary by development

In some, the buyer shares resale profits on a declining scale. For example. A buyer reselling within three years of buying would pay 100% of profit back to the developer. For resales occurring during between the 4th and 15th years, 50% of profit goes back to developer. Years 15-25, 25% of profit, etc. The resale price is whatever the market will bear.

In some developements the only restriction is income related, you have to sell to someone who qualifies under the same guidelines you qualified under. If you had to fall withing 195% of Area median income, so would any prospective buyer. This type of restricion also has a time frame, often expiring after 15-20 years. Again, resale price is limited only by what market will bear.

In cases where the owners are paying very low purchase prices to get in, it's often b/c the building is meant to remain affordable so on resale the sales price would be restricted. These have least potential for profit taking but have the lowest barrier to entry too.

Often the restrictions on these types of buildings are tied directly to their financing. If a building is partly financed with a 25 year interest free loan from the state, for example, the restrictions are tied into that time period in order to prevent public money from becoming a quick flip windfall to the individual buyer.

Posted by: LilBitOfLuck at September 26, 2008 2:20 PM

Yeah... ya see, I'm not excited about supporting a "brief mandatory residency period complete with tax abatements" if that just means the housing prices quadruple (or more) when the homeowner leaves the neighborhood with a windfall.

Help lower income folks buy in their neighborhood... for a little while. And then get priced out.

If something is gonna be market-rate in a very short period of time (and that's less than 15 years or so in my head)... then what's the point? Make it market-rate from the beginning... let the market decide where to build... and actually collect taxes.

What Chaka describes is almost sinister.

Posted by: tybur6 at September 26, 2008 2:24 PM

LilBitOfLuck... thank you. That makes more sense. And makes me a little bit less anxious. However, it sort of bothers me that something that receives tax abatements, interest free bonds and so on would *ever* have the potential for major profit taking (for the owner or the original developer).

But I guess, in the long term (very long term) the tax revenue potential for the entire area is increased...

Dunno, that thinking is well above economist abilities (and probably the abilities of everyone developing these gov't programs!! that's what bothers me and makes me anxious.)

Posted by: tybur6 at September 26, 2008 2:30 PM

(meant to read - "well above my economics abilities")

Posted by: tybur6 at September 26, 2008 2:32 PM

just thought i would make one point of correction to LilBitofLuck's post.

any resale profits are not paid to the developer but rather to the City. you should feel comfortable that you're not getting screwed tyburg6.

billions of federal tax levy for a never-ending war in iraq that probably shouldn't have been fought in the first place. that's where you're getting screwed my friend-not by affordable housing.

Posted by: friend_or_foe at September 26, 2008 2:41 PM

Thanks, FOF. I was careless with my example.

Truth is tyburg, the government spends lots on housing, affordable and market rate. Plenty of "market rate" buildings benefit from public money and there are no restrictions on those units.

For the lower income buildings, there are a lot of factors at play. Often, these projects are part of the price of doing business for a developer who wants to build "market rate" elsewhere, or for gaining certain easement rights, zoning variances, etc.

A developer like P.A.C.C is best viewed as a conduit for affordable housing development. Nobody wants the state or city in charge of this (not even the state or city), so these agencies fill a need. Their staff's shouldn't be underestimated; they're pros who might have mpa's instead of mba's, and the better run ones, especially in nyc, are able to draw talented people with credentials from top schools. These agencies tend to be much more connected to the communities where they build than your average developer.

Posted by: LilBitOfLuck at September 26, 2008 2:49 PM

FoF - yes... sadly, I'm very well aware of the billions and billions being spent in Iraq.

These latest comments have removed much of my "what else am I being screwed on?" fears. To sum up, these projects are dealt with in a far more honorable way than, say, a Yankees stadium or the like...

But I shouldn't bad-mouth them, as an act of kindness for shelling out millions upon millions and losing millions upon millions in tax revenue, they are making sure a family can go to a baseball game for only slightly less than a week's salary. Man o' man.

But I digress. So, I won't be writing letters about publicly supported housing developments... Thanks.

(By the way, LBoLuck, are there rules/laws/guidelines that tend to favor organizations like PAAC etc rather than the "average developer" or is it just a matter of who wants to take it on?)

Posted by: tybur6 at September 26, 2008 3:07 PM

non-profit groups like PACC tend to get some preference in terms of applying for competitive subsidy awards. but the city will entertain pretty much anybody who walks through the door and says they want to develop affordable stuff.

the profit margins aren't there and there's more bureaucracy involved in affordable dev and so you don't get the Trumps of the world rushing to do it.

non-profits like PACC however are specifically created to do community development and so they really have no alternative. whatever profit they do make on an affordable development usually goes right back into some other part of the group, like overhead or other offices within the group.

Posted by: friend_or_foe at September 26, 2008 3:40 PM

As stated the rules for re-sale vary depending on the program. I should have clarified. In this building because it is a cooperative, what FOF and Lilbit posted may well be true. When one, two and three family homes are built under similar programs, there are no such restrictions. How would such a covenant be included in the title of the house anyway? My friend got a house on Fulton street via a lottery for middle income buyers and sold at a hefty profit about 8 years later. I remember a thread on Brownstoner a couple of months back about this very same topic.

Posted by: Chaka at September 26, 2008 7:56 PM

I found the link for the thread back in March.

http://www.brownstoner.com/brownstoner/archives/2008/03/lottery_lunacy.php

Posted by: Chaka at September 26, 2008 8:52 PM

Correction:

* The date of the next and last info session is Tuesday October 21st (not Oct 23rd). Attending info session is encouraged, but not mandatory to apply.

*Anyone can get an application on the website: www.thegatescoop.org

please call 718 522 2613 *22 if you have any questions...Thanks!

Posted by: Michelle Etwaroo at October 16, 2008 11:36 AM

Post a comment

Please be patient while your comment is published. It may take a moment.

Latest Restaurant Additions