Reading about a new ultra-luxury Far West Side rental project going up where over 40% of the apartments are going to have controlled rents (“affordable housing”), I’d like to pose a question to supporters of affordable housing mandates in the planning blogosphere (which includes pretty much the whole planning blogosphere): How high is too high?
I’d also be interested to know why exactly the developers included so much affordable housing. I’m pretty sure there’s no program that requires that much affordable housing (the 80/20 state program obviously only requires 20%), but I think commenter Alon Levy is probably right when he suggests that various subjective review processes pressure developers into including more subsidized units than the government officially asks for.
Tom Duane, a State Senator, has some testimony up on his website about the project that gives us a look into the mind of what seems to be a typical (at least for New York City) affordable housing-type NIMBY. Back in 2009, when he gave the testimony, the plan was for 50% of the 1,200 units to be kept at below-market rents “permanently,” but even that wasn’t enough for Duane. He was upset that “only” 40% of those units will have two or more bedrooms, and also wanted the amount of commercial space scaled back from two floors (i.e., an FAR of 2.0) to just one (1.0 FAR). Oh yeah, and he doesn’t like the 31-story tower and he wants the developer to really promise not to transfer the unused development rights elsewhere.
Obviously, I oppose setting aside this much of new developments for affordable housing. People tend to think of different segments of the real estate market as distinct – how on earth could limiting the number of rich people on Far West Side make prices rise in Bed-Stuy? – but they are inextricably linked. You might not shed a tear for the 20-something banker who won’t get his Hudson River view, but when he then decides to buy in, say, Brooklyn Heights, the higher housing prices are going to have a ripple effect throughout the borough, pushing the envelope of gentrification further and further, until finally the knock-on effects reach places that the Far West Side 2o-something banker who got priced out of the Far West Side would never dream of living.
I know most of the planning blogosphere disagrees with my analysis, so my challenge to you is this: How high can you go with affordable housing mandates until the effect they have on market-rate rentals is no longer worth it? Does this 40%+ project seem like too much to you, or do you think NYC should go even higher? And do you think the city should set a limit and stick with it, or is it right to let whoever reviews these projects to use their discretionary power to nudge developers into including more than is required by statute?
(Also interesting to note: The 10th Ave. & 41st St. 7 train stop nearby, which was cancelled, was estimated to cost $500 million. The net present value of the hit that the developers are taking on these of these subsidized units must be close to $1 million each. At 540 subsidized apartments, it seems that the money spent on affordable housing in this one project could have covered the entire cost of the extra station at 10th Ave., or at least a significant chunk of it.)