♪ [theme music] ♪ >>> affordablehousing. is there affordablehousing where there's a dire need for affordablehousing in new york and the nation, butwhere is this coming from? how do you get it? whoprovides financing? why do peoplebuild? and how do you belucky enough to win the lotteryfor it?
so today i'veassembled a group of experts who aregoing to provide their thoughts onthe status of affordable housingin the region. my guests includejeff levine, who's the chairman andceo of douglaston development andlevine builders, jane silverman,who is the executive directorfor community
development atchase, a developer on the other side,andrea kreshma, laura bailey, whocame from virginia to be here with ustoday, who is the managing director,managing vice president ofcommunity development. >> community finance. >> community financefor capital one bank and last but notleast james rizzo
who's a principalat the briarwood organization. so i have developer,developer, builder, builder, developer, banker.is there affordable housing? how can we buildaffordable housing? we have this direneed. what's going ontoday? >> affordable housing iscritical to the life of people of new york city. we need it toattract others
that come herefrom all over the world. obviously aaffordable housingis difficult because 50% of people arepaying more than 30% of theirrevenue for housing in newyork city, as is evidenced by thefact that we have vacancy below 5%and 3%. so the issue ofaffordable housing is critical. as our mayor, thismayor, and every
mayor before himgoing back to my early days in theaffordable housing business undermayor koch when we work with all ofthese people, mayor de blasiohas renewed this commitment wantingto do over 200,000 units of housingover the next ten years. >> mayor bloomberg did agreat job creating a lot of affordable housing. therewas a time when we had
land that we were talking about. today we don'thave that much land. then we weretalking prior to the show, jameswas saying and andrea the amountof time it took -- the recessionreally took out a lot of guts onaffordable housing. you know, you weretalking about it, how long does ittake to do an
affordable housingproject? >> typically it should takeabout a year and a half. we have someprojects where we were awarded thejob back in 2009 and due tobureaucracy -- >> financing.>> financing, you know, politicalcommunity -- >> it took fiveyears. >> it took fiveyears to break ground.
>> people want to knowhow does somebody get an affordable apartment? couldsomeone try to explain the lottery system,the ami, jane, or andrew? >> i think youprobably have done the market -- >> sure, sure. youtalk about area median income. the city of newyork is a very large area and sothe area mean income for afamily of four is around $80,000,maybe a little
higher than thatnow. so the typicalaffordable housing project is forpeople who live at 60% of the areamedian, so that's a family of fourearning $48,000 a year. is that right? yeah, $48,000.then it's scaled depending on the size of your family. >> prior to youarriving this morning, i was telling bothjane and laura about two
incidents of peoplewho watch my shows who won the lottery, asone would say. jane was sayingthat the lottery sometimes -- wecan have 50,000, 60,000 people. so oneperson qualified under this 70 -- or 60%of the ami which is low income. but the otherfamilies who also have difficultyqualified under the 175. what is the 175 upto on the bands?
>> well, if you considered itroughly $80,000 is median, 175- >> but my questionis not that. i earn a little bit morebut it's still impossible for me to get an apartmentand i see these notices in the newspaperor i go to new york housing connect or even ifi'm in the westchester market, there'sdifferent markets, how does somebodyget the opportunity to go into the lottery?that's what i want to know.
>> the lottery asper the policies of the agenciesare advertised in different media and print.they're also available online at the agency. >> right, nyc connect -- >> there are manynot for profits, be they new destinyor settlement housing who help peoplefind these affordableprojects.
so the higherincome bands are available only inmixed income projects wherethey have units allocated forthe -- >> also the communityboard gets preference. >> they get 50%. >> and then it goes to cityworkers, cops, teachers, firemen. so they getthe preference. the demographicslowly goes out from there.
>> can we talkabout, people think affordable housing, butanother big aspect of affordablehousing is supportive housing. who would like toexplain that? >> michael, i think that's a bigtrend in affordable housing. last year our three majorsupportive housing developments in new york involvedthree different types of subsidythat helped make not just the rentsaffordable but
helped make surethat there are services forpeople who are living in the communitythat need just a little bit of a boost to beviable in society. >> you weretalking earlier about the threebands on a program that you'reinvolved with. >> yeah, i wastalking about a couple things. one is the threedifferent tiers of
income in aparticular project that we financedrecently. one is a traditional lowincome, another was supportive lowincome and moderate income band so that's oneof the first that i've seen with allthree in one project. >> as i was sayingearlier prior to the show, one of the biggestdifficulties of affordable housingis there's not
much land to bebuilt, okay. some of it isbeing built maybe perhaps on aformer brown field or in a differentneighborhood. and you need theopportunity because we needmore people to be living in the newyork market. where can we dothis? we were talkingearlier before
about the new yorkcity housing authority whichhas some extra land because whenthese houses were built and you lived in oneyourself there were parks, there were parkinglots and all the rest. that's a market oran opportunity. >> i know thatthere's a debate about parking insome of these areas now. we're doing aproject currently
with a nonprofitwho had a parking lot, they owned aparking lot next to one of theiraffordable buildings that wastotally underutilized, sowe are now developing -- we partnered with that nonprofitand we are developing a building on thatparking lot. >> we hear aboutafford al housing, one thing that iknow jeff has been
involved with andmaybe both banks have been involvedwith it has been senior housing,affordable senior housing. explain that tome. >> affordablesenior housing in many cases is verydesirable in many communitiesbecause senior housing doesn't drain thecommunity in terms of school costs and thingsof those nature.
so when you'retalking low income, unfortunately thereare some communities that are not amenableto having low income developments in their community.seniors are being welcomed to a higher degreebecause that's a group that is notinvolved with drugs, does not use communityservices beyond those having to do with their physicaland health disabilities. so i believe whenyou have a subsidy
program throughseniors, very often they are notasset tested in many of theseprograms so it's basically revenuebased. for many of theseseniors who may have hold a homeif all they have as revenue issocial security and earnings fromtheir pension, very often theycan satisfy the
economic requirementsfor affordable housing. >> you know whatjim was saying before about thecommunities, you know, that it preferencesfor 50% of the people who lived in thecommunity board, i remember when silversteinbuilt on 42nd street, he had difficultiesfinding people to qualify for seniorhousing because the band ofopportunity --
>> can be sonarrow. you want to make sure, there's such a hugeneed for affordable housing, thatyou're not saying you need to besenior or you need to be this specific groupin order to fit it. i would agree withjeff that what's unusual about newyork is that there's lesssenior focused housing beingbuilt in new york
and it's more ofan open population. >> aren't you buildingin staten island senior housing? >> we are buildingin staten island and we open injune subject to our wonderfulgovernor and our mayor puttingtogether the bond allocations aswell as possibly dealing with someother issues we're confronting we'llbe closing on a
160-unit seniorsproject which we believe will be avery good project. >> and for myaudience, what earnings does asenior couple band? >> the band is 60%to 80% in order to satisfy federalrequirements for tax credit allocation aswell as the community desires, so we're talkingabout at 60% of the median of roughly$80,000.
>> so here's aquestion, why does chase, why does capital one gointo this business? what is the reasonwhy major lenders like you, thebiggest bank, okay, and a nice size bank,go into this business? why is there adesire to help affordablehousing? >> well, it'sgreat for communities, but it's great business.it's a very simple answer.
>> it's our obligation tomake sure that we have a clear publicbenefit to existing and this is a perfect way. yousee a need that's out there and the opportunity touse your expertise to do something that's good. you can't get anybetter than that. >> i think theformula works. >> i think thefact that you have cra requirementsis also a part of it.
>> but i think therisk is relatively low -- >> right, both ofthose things are right. >> the risk, once youput in affordable housing, the people who areliving in it don't -- they want that opportunity. they want to bethere and they're going to be payingtheir rent. you're not goingto have to worry about the arrears.
>> the structureof affordable- affordable housingwhich is subsidized, that makes a secondposition to the money of thelending institution andenables the deal to make far moreeconomic sense. >> and it'sinteresting, isn't it, how if you'redoing the right thing it works outbecause your
interests are aligned.residents want to live there, the developer wantsit to be affordable and stay incompliance with the programs, andso that -- it has to work for thebank. >> andrea, whenyou took care of the coney islandcommons, in addition to building theaffordable housing, one of the componentswas the ymca.
>> right. the rfpthat the city issued solicitingdevelopment ideas for that parcelrequired a community facilityoperator so we were fortunateenough to enter into a relationship withthe y and that was i certainly believepart of one of the reasons that we won, andthe financing there was we tooka number of
different approaches.originally we were looking at new market taxcredits for the financing. it became moreexpensive and more complicated thannecessary and so we ended up usingjust the low income housing taxcredits but that is a winner forthe community certainly. >> so the communitynow acquires a y, and what about thetenants in the
property, do theyget any certain advantages -- >> that's a very goodquestion because that was an important partof the way the project wasdesigned was that it had to -- wehad to ensure that the community as awhole felt welcome in the y and thatit was clear that it was not justfor the residents of the twoapartment buildings.
and themembership, the y looks at this, also they're in thecommunity business and so for they, this is a lossleader. we understand that. they are pricingit based on a sliding scaleaccording to your income. so membership --and that building is full at alltimes of the day and in the eveningand you see old people, youngpeople, people of
all differentraces and ethnic backgrounds inthat building because it's coney islandand that's who lives there. the y membershipsare strong. it's been a tremendousasset. there's a family pool and a lap pool. >> it's veryinteresting because thebenefits of the community ofaffordable housing
typically goesbeyond that. in many of theseeconomically challenged areas,the new construction ofgood community facility and retail spacedoesn't happen on its own. >> right.>> if you go back years, we worked with the anchorprogram, we built the renaissance where webought over 60,000 square feet of communityretail, which
includes the carver bank,health and beauty aids, all of which enhance the qualityof living neighborhood. >> when you built that,the renaissance, this was beforethe resurgence of harlem, okay. and you had agreat location, but the retail wastruly limited to 125th street andit was a different type of retail. so you went inthere and at that
time you even geta better benefit. you gave thecommunity the opportunity to buyan affordable condominium andthe people today have been verylucky and sold them for a verylarge price. >> and thecommunity services in some of thesebuildings can be very varied. our investments inharlem have
included sugarhill, that has a children'sheadstart center in the groundfloor, and we have one where thepartners art space, where the ground flooris performance space and gallery space for artists. >> right now i havethe privilege of working with jane and chase ona project on 149th street, 540 unitsof mixed income
affordablehousing, the base of which willprovide not only an importantretail community but we were fortunate enoughto bring a universal pre-kindergarteninto one building. >> in the bronx.>> 149th street in the bronx. and you have torealize having 20,000 square feetof continuous space does notexist in those areas.
>> one of the thingsthat they have created this incrediblycreative market in creativity inpartnering so we are bringing innonprofits, community groups,arts programs, supportiveservices into these proposalsand getting groups that wouldn'totherwise be participating inaffordable housing
and it's forcingus to be much more proactive inthinking. it's an overallbenefit also to the deals. >> what about for my audience,what is supportive programs? what's help, theandrew cuomo program that wentinto effect a number of yearsago, what are the different programsin addition to housing thatpeople who are
residents of thesecommunities on these affordablehousing have, okay? are there social services?are there psychologists? are there socialworkers? >> we're doingfive projects currently, and we're partneredwith five different nonprofits and they eachhave their own unique -- >> so give meexamples. >> well, we'repartnering with
fifth housing upin the bronx and they're going --and also we're partners with thebridge up in the bronx. >> what is the bridge? >> they provide services forlow income individuals, but the specificbuilding is veterans housing. >> so that's anotherimportant -- >> so that's awhole niche. >> now, are theresome supportive
housing programswhere there's job training also? >> yes. in fact we'rein construction in east new york thatwas an underutilizedparking lot between the lyndonhouses and boulevard houseson stanley avenue and we're doing a communityfacility there as well. it's about 19,000square feet. good shepherdservices and man
up are going tomanage that facility. man up is anonprofit that does workforcedevelopment, job training, osha training forthe 40-hour certification, job placement so,for example, we're constructing on the site, wehave members of the communityworking on the job that man up helpedus place. we have a localhiring requirement
so economicdevelopment, job creation, that's abig part of -- >> we always -- wework both in brooklyn, we talked about thelyndon houses where i lived for a portionof my childhood. i have worked fora number of community-basedemployment groups and we work indifferent communities with differentcommunity-based groups.
for instance,positive workforce very active incentral harlem. different groupsin different areas that reflect thenature of the population of thecommunity, which is critical. >> now, somethingthat people are not aware of, once you're in anaffordable housing program, also inan 80/20 program, because 20% of --in the market rate
housing there's 20% that isbasically affordable housing. it's not aseparate building. >> 20%, soon to be25% or 30%. >> but when theyhear of 80/20, those are the bestlotteries and people want to getinto these buildings. ironically i believe thewriter, producer, director, everything ofhamilton was -- won the lottery anumber of years
ago and he livedon west end avenue -- >> i didn't know that. >> yes. he won thelottery, all fair and square. now he'sfortunately doing very well but hisrent is maintained, right? once you get intothese apartments -- >> once you're in the apartment,you cannot be forced to leave. althoughif you file your income and it exceeds theper missive
allocations otherapartments have to be lowered inrespect to that to maintain the balance. ingeneral the 80/20 program where you'rebuilding high-rise buildings attypically much higher costs thanlow or mid-density type constructionis an issue which has to beaddressed. >> but in long island, thelong island housing program,
there they specificallysay that you have to bring your taxreturns. you have toqualify each and every year. >> right. and that'smore common. >> that's morecommon. what about, i know, poco isdoing programs in westchester and laura, you'redoing programs -- both of you inother markets. what's theaffordable housing
programs, let'ssay, in new jersey, the newarkarea, or the elizabeth area? i know that it wasrecently atlantic development, peterfine did something in mt. vernon. so isthere differences? >> i think you're stilltalking about the federal tax credit rules. thenext available unit jeff was talking about. if onebecomes ineligible, the next one hasto be reduced to keep
the number ofaffordable units the same. >> you mentioned newark.newark has become a center for redevelopingbuildings, so the affordable housing programs arelooked at in many places, newark is an example,as being a way to redevelopbuildings. >> let's be realistic.when jeff, since he's the elder statesman,started in harlem with the burn outprogram --
>> vacant buildingprogram. >> these were neighborhoodsthat were vacant land. i still remember when westarted the show 15 years ago. >> it led mayor koch to saylet's bring these back into speaking. franklyspeaking, it was the housing partnership andkathy wild that formed the conceptof marrying the private sectorwith the public sector and thebanks to have the
type ofguarantees -- >> there were alot less developers. it was a loteasier. >> and when youbuilt on madison avenue, you know, on those -- thetwo or three family, those are beautifulhouses and there was a dire need becausemadison avenue from 106th to125th street was vacant lots. the community haschanged over there.
>> in retrospect itwas low density. those lotsprobably could have been used -- >> much higher. >> one of the things we'reseeing outside of the city, we do a lot of workin connecticut and we have a project insuffolk county is what they'recalling t.o.d., transit orienteddevelopment. these are smallercities, especially
in connecticut, that aredeveloping new downtowns around their buswaysand railroad stations and encouragingyoung families or empty nesters inparticular to come and live in theseareas. >> large developments inlong island is where they're working onthe train station to get closer. >> another one isa labor of love for us.
>> they're actually transitoriented developments with the subway andthat's why those communities haveevolved. >> coney island.>> you know, when i do shows andpeople i ask about coney island, thegeneral comment is it's a great placeto develop, but once you get offthe subway -- >> right, so backin the day we
would call that atwo-fare zone. >> if you get offthe subway. >> right, especially ifyou're living -- if you're of age at all andneed to get all the way to west 29th or west30th street in coney island andyou're taking the bus. >> one of the areasthat the briarwood organization wasinvolved with was the rockaways,which was also as
you would say atwo-fare zone. look, rockaways,beautiful water, same water thatyou have -- where you are. >> oh, yeah. >> it's the samething. >> those were forsale and it was a tough sell butthen the neighborhood isslowly -- >> but it's reallya beautiful thing.
and that community, itcreated low density over there and it's reallybeen an important thing. so with like oneminute left, what do we see, you know, inthe balance of 2016, you know, the biggest challengefor affordable housing? >> well, obviouslythe world has changed greatlysince 2015. the expiration of the 421 a taxabatement is something that needs to be dealtwith, as does the
bond allocation,the taxes and bond allocationsbetween the city and state. i'm quite suresince the idea of affordable housingis so critical that ourgovernments, both state and citygovernments will work this out and i thinkit has to be done in 2016. >> and the prevailingwage discussion is still in flux. that'sgoing to affect the amount
of affordable housing unitsthat we can develop. >> laura? >> we need to pickup the pace. there is a direneed to affordable housing across thespectrum. new york hasfigured out how to do this well inmany respects but we need to domore. >> kudos tocommissioner bean.
she says to janeand probably jeff all the time,bring me your deals, let's be creative. wecan have a conversation. the door is alwaysopen. >> last but notleast. >> last but not least, i thinkthere's a lot of subsidy out there, more thanever before with the new budgets comingout. tax credit pricing is higher than everand it's a world of
opportunity outthere. >> so i don't havemy crystal apple, which i normallyhave, so it does look shiny thatthe world looks good and hopefullythere will be the movement on the421 as and certain other things andwith the budgets there will be moreaffordable housing because we needmore in the
metropolitan area.i'd like to thank jeff, jane, andrea, laura andjames, and i'll see you next week.