Mythbusters: Shedding Light on 80/20 Affordable Housing and ‘Poor Doors’

Posted On Mon, August 4, 2014 By

Posted On Mon, August 4, 2014 By In Features, opinion, real estate trends

There’s been lots of chatter on the street and in the media on the subject of “poor doors” in new developments for those who have qualified for affordable housing. And though this subject has created quite a bit of controversy, it’s actually not quite what it seems. Rather than being outraged that our city allows real estate developers to “discriminate” against those who could never consider paying for the privilege of residing in their latest and greatest luxury building, naysayers should think about reading up on exactly what affordable housing is and isn’t—“rich” home seekers having an edge over the so-called “poor.”

Perhaps the biggest misconception for those who can afford a market-rate home is that affordable housing translates to providing shelter for ex-cons, rehabilitated drug addicts or an option for those who currently living in homeless shelters. Instead, those who qualify have steady, highly regarded jobs. For instance, they might be a public school teacher, a college professor, or a New York City fireman or policeman. Not “poor” by any means, and we should stop referring to them as such—this person simply earns less than the neighborhood’s Area Median Income (AMI). According to the U.S. Department of Housing and Urban Development (HUD), earning 80% of the AMI is considered “low income”. This equates to $47,000 for a single person in 2014 in New York City.

The Housing Finance Agency’s (HFA) qualification for obtaining affordable housing is based on household income falling between a particular development’s upper and lower limits; household members meeting guidelines, a history of good credit—and obviously, no legal, criminal or housing issues. Related to this, a lot of affordable rent seekers think they’ll end up in the less desirable units—when in truth, affordable housing units are required to be evenly distributed throughout the entire building. In the case of 40 Riverside Boulevard, the Extell project that has stirred the “poor door” pot, this building is actually two towers that have been constructed to appear as one. The two buildings have different building codes, utilities, and therefore different entrances, only sharing a garage—a perfectly legal arrangement. We also need to remember that even within the lottery system for these units, “winners” still go through an application process and ultimately require an interview and board approval before they can even start thinking about packing their bags.

A second misconception is that affordable housing is required. It’s not. The HFA does offer tax-exempt financing to rental developers in which at least 20 percent of units are designated as affordable housing for households with incomes at 50 percent or less of the local AMI (adjusted for family size); and developers are allowed to build 33-percent more square feet than would otherwise be permitted if they go the 80/20 route; but even with the discount and the density bonus, many developers choose not to partake because the implicit subsidy for these affordable units is still quite high when all is said and done.

abington house, abington apartments, abington house high lineThe Abington House located along the High Line Park. Images © Abington House

However, more than a few of New York’s largest development companies are committed to the program. Take Related Companies for example: One of most prodigious developers in the US, Related Companies places a high priority on developing, acquiring and preserving housing in the affordable housing sector. In fact, over 60 percent of their 50,000-plus apartments under their management are part of one or more affordable housing programs, and an additional 20 percent of these homes provide workforce housing. One of this company’s newest developments is the Robert A.M. Stern-designed Abington House in West Chelsea. Practically touching the High Line Park, this luxury, amenity-filled building does offer affordable housing. According to a recent piece by the New York Times, the subsidy provided to a family with a two-bedroom unit in the Abington House is about $90,000 a year.

L+M Development Partner is also steadfast in their commitment to developing affordable housing. This development company was founded on the belief affordable housing strengthens the fabric of our communities—and this remains one of their core values. Not so long ago, L & M purchased back-to-back land between 116th and 117th Street in Harlem in order to develop two structures. On the 116th Street side, the Adeline is a nearly sold out, market-rate luxury condominium. On 117th, Harlem 117 is a rental building completely dedicated to affordable housing. Though they are separate buildings, each with their own communal amenities, they do share an underground garage.

Another 80/20 Harlem project on the horizon is a two-tower Continuum Company development on Park Avenue between 124th and 125th Street, opposite the Metro North Station. When completed (in about two years) these towers will be Harlem’s tallest buildings and will include about 120 affordable units and roughly 380 market-rate apartments.

One of the latest L & M Development (in partnership with Dunn Development) is the mixed-use, multi-building Navy Green on Clermont Avenue in Brooklyn’s Fort Greene neighborhood. Offering about 460 homes in all, it will include affordable housing rental units.

Gotham West on West 45th Street in Hell’s Kitchen is a mixed-use project from the Gotham Organization. With a total of 1,238 units, 684 fall into the affordable rent category. They are also developing a project on Fulton Street in Brooklyn with an affordable housing component.

The list continues when it comes to good examples of developers building projects with affordable housing, including Glenwood Management, Rockrose Development Corp. and TF Cornerstone.

looking for affordable housing, downtown brooklynThe Downtown Brooklyn Partnership site

Ultimately, the real problem is not “poor doors” but the level of affordable housing provided by the city and educating people on how to apply for said housing where stock is available. A lot of rent-seeking individuals have no idea if they qualify for affordable housing, let alone how to enter the lottery for those apartments. And then there are others who don’t have the right credit rating or financial documentation to qualify for these homes and have even fewer options for housing. Instead of focusing on this newly sensationalized “poor door” term, maybe we should be having a conversation on how individuals can better access and lay claim to these and other affordable units.

There’s plenty of information out there to learn more and recently, the Downtown Brooklyn Partnership along with a number of developers are now offering free seminars to assist prospective affordable housing renters in building up a credit history in order to enter what is a very competitive lottery. There are also comprehensive orientations on what is oftentimes a confusing application process. To check out seminar schedules, you can visit their site.

The NYC Affordable Housing Resource Center is also currently accepting applications for a lottery, but interested participants should note that there is a deadline. Shortly after the deadline, those who qualify will be randomly selected (about 20 times the number of available units) and interviewed. Established a year ago, NYC Housing Connect is dedicated to helping those who wish to participate in the affordable housing lottery system.

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“Our city’s biggest challenge is the growing disparity between affordable and market-rate housing,” says Jonathan Miller, the president and CEO of Miller Samuel Inc., a New York-based real estate appraisal and consulting firm. “Producing affordable housing helps us provide a greater diversity for labor skills needed in New York… because, in the long run being it is good for New York as a thriving community.”

Lead image: (L) © Things that Inspire; (R) © The Bohmerian

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  • jules

    This infrormation is all spelled out on the internet. It’s not difficult, under NYC Housing Connect. ‘Affordable Housing for Rent’ What is not ever memtioned is how does the person who’s been selected to move into an affordable apartment manage to stay there should his income or circumstances change later on. Do they check to find out it the tenant has made an extra $200 income one year? And will he now get thrown out? What happens if later on the tenant falls in love and wants to have his partner move in? Supposing an elderly tenant needs a full time ‘home helper’ or has her grandchild come and stay.. Will they be thrown out? What happens if the building gets sold or becomes insolvant? Will tennants find themselves homeless?

    • Lexi

      No, under 80/20 you only need to meet strict requirements to get in. After that you can’t make more than 150k a year but it would have to be 2 in a row to destabilize the apt. The point is to not keep people poor like in the projects. They want you to be around successful people, it’s like school integration. It’s a great program and not many people know about it or apply. It’s easy to apply. Can be done online. City workers get some preference, it’s great for firefighters and policemen. Also current community residents get 50% preference so if you see a building that has it in your area apply. Don’t just do the lotto get on the waiting list for buildings that have it. People move out all the time and they go to the wait list to fill the empty apt.

      • jules

        So one year you make 150k and the next? you have to to back to earning the same income you were allowed when you were selected? What happens if your income drops below the amount required? How do you get on the ‘wait list’? I imagine the companies with vacant apartments will fill those apartments with market rate tenants. Everything else you mentioned can be found on the application form.
        [email protected]
        As far as ‘not many people know about it or apply’ Where did you read that! The apartment my friend was selected for had 90M applicants! Sadly the company who own the 43 story building on West End Ave has a seriously bad record. One of the worst slum landlords ever if you go to ‘Yelp’ Crooks! Since August 14th this year, they couldn’t get enough tenants to justify having the post office provide mailboxes, 20% occupancy! ..Mail is dropped off at the front desk. The hot water’s cold much of the time; Tenants are being charged for heat. The thermostat is impossible to manipulate and you get luke warm air coming out of the vents when the temperature outside is in the 50’s..So much bull! As usual with the City, who’s minding the store?

        • Lexi

          No if you go over 150k one year you would have to go over the second to destabilize the apt. It’s a rent stabilized lease… But if you make 150k you really don’t need the subsidy. 90 million? I don’t think so, maybe 90 thousand applied. But I’ve lived in NYC 15 years and many people don’t know about it or think it’s impossible to get in. If you live in the community board of a certain building you will get 50% preference over everyone else. So apply near to you. It’s worth it. Some buildings do not do yearly reviews, every lotto is slightly different.

          • Lexi

            They cannot fill the apartment with regular rate tenants for 15-20 years- they are getting millions in tax breaks for the 80/20 subsidy.

        • Lexi

          To get on the wait list might be the best strategy. You contact the management company directly… Related, Avalon etc… And ask to be put on the list. In order to stay on people have to submit pay stubs every 6 months, so many dropout. And people do move out occasionally, married, leave NYC etc…

          • jules

            You didn’t review my question.You tend to continue to extend your long winded, repetitive rant! Getting your application filled in and sent in is really straightforward. See whether your income is within the guidelines written on the application for the number of people in your family. Make sure you do it on time before the lottery closes.. That is itemized on the application. So now, you’ve been selected to move in to an 80/20. According to you you can earn up to $150,000 twice in two years before being thrown out. What about if you earn less now than when you moved in? So you get thrown out? If you stay under that number, how can you find out in how many years they will not allow you to stay on, even if you’re elderly. Again, what if you need a home helper to live in with you? Also, what happens when the building you have moved into is not filling up? Management sucks and is very rude and unprofessional. The ‘super’ is never available. The bill for your rent arrives late every month. Do you know if the cost of heat is picked up by the management as is the case with all other rent stabilized apartments. The apartment I moved into is costing me three times in heat what I’d paid before. I’m forced to have Verizon instead of Time Warner and my bill it double for internet access. Who can we go to to find out what to do about these issues? Thank you.

  • 1bestdog

    “Related to this, a lot of affordable rent seekers think they’ll end up in the less desirable units—when in truth, affordable housing units are required to be evenly distributed throughout the entire building.” The reality is many of these apartments are certainly less desirable and have fewer upgrades as the market rate.

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