The 5Boro Institute just released an issues-focused survey asking 3,000 New Yorkers about the most important challenges facing our city. It was no surprise that concerns about the mental health crisis and public safety were among the top issues identified.
And the top issue was affordability, with residents saying the steep rise in housing costs is driving concerns that the financial strain “impacts their ability to plan for the future, save money, or even stay in the city at all.”
Fixing the affordability crisis is an all-hands-on-deck undertaking. The recently-adopted City of Yes, which gives a 20% density bonus provided that extra space is dedicated to affordable housing, is one element of many that will be needed if we are going to be able to help families stay in the city we call home.
The development company I head, Carthage Advisors, recently completed two 19-story apartment buildings at Adam Clayton Powell Jr. Boulevard (Seventh Ave.) and W. 124th St. in my native Harlem where the 330 apartments are evenly split between market rate and affordable units.
As one would expect with any development in the city, it was a rocky path from inception to completion involving complex financing arrangements over financing — including government subsidies and using proceeds from the market rate units to cover the costs of the affordable units. A variety of subsidies covered around $60 million dollars of the $100 million cost of the project, with the remaining amount coming from bonds issued against the anticipated rental income.
We had extensive conversations with community leaders who have been properly concerned that too much of recent housing development has led to gentrification, with new units beyond the financial reach of local residents who have invested their lives and raised their families only to face the prospect of being priced out of their neighborhood.
And we are aware of debates over defining just what affordability means.
Around 70% of the affordable apartments in Harlem’s Marcus Garvey Village are available to families making under 80% of the Area Median Income (AMI), which factors out to $117,000 a year, with more than half of those targeted to those making 40% or 50% or AMI, meaning incomes as low as $29,000 a year.
Although this is significantly in excess to any city or state requirements including the new 485-x tax abatement, our development team wanted to ensure we directly addressed concerns about gentrification in the Central Harlem community.
We also included significant community benefits in our project. The project includes space for community meetings, for a long-needed home for a Harlem-based LGBTQ center and a day care center on the ground floor, a critical need for families with young children.
We carried out our commitment that a third of our workforce on the project would come from the local community. Our firm sponsored job fairs with the local community board to ensure we had local residence on our construction site.
And all the amenities in the buildings are available to all the tenants, regardless of whether they are in market rate or affordable units.
The economics of building in this city are challenging to say the least, with land and labor costs far higher than in other cities. It takes creativity and most importantly a commitment to working with partners in the public and private sector to find a way to make those financial realities work.
The reality is that we cannot expect a dependable partner in Washington under the new administration. Compare that to the 1950s, when federal housing assistance helped create as many as 15,000 new apartments a year in the New York City Housing Authority alone. Those number plummeted to as low as 500 federally assisted NYCHA units by the 1980s.
In the case of those realities, we can’t throw up our hands in frustration.
And for all the hue and cry over gentrification, the fact is gentrifying neighborhoods bring in families with higher incomes to support the businesses that serve all residents. The challenge is to refuse to leave those long-time residents behind. In other words, gentrification without displacement.
That takes sharp pencils to work out the financing, willing partners to commit public and private resources and a commitment to overcome those realities.
The future of the city is at stake.
Poteat is the president of Carthage Advisors LLC, the developer of Marcus Garvey Village in Harlem.
