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Brooklyn Ascendant:
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MR. WOLLMAN: Take your jackets off, loosen your ties, sit back, relax as well as you can. I promise you that it will be an interesting morning. Breakfast will be out there in the reception room all morning so that those of you who get desperate should just not be too desperate, but make your way as quietly as you can to the back room. We'll take a break, which we normally don't do, to sort of compensate for some of the heat and we'll try to make the best of a situation that I hope will be alleviated during the course of the morning.
Let me tell you just a little bit in starting before I introduce Jeanette Gadson what the rules of the morning are and then I'd like to tell you a little bit about the Institute. The rules are very simple. We have tried to craft a program which is very comprehensive. I think all of you understand that and see that and can appreciate that if you can hang with us through to about 11:15 or 11:20 you're going to know an awful lot about housing in Brooklyn, which is the subject of this second of the three sessions. We have asked each of the speakers this morning to prepare their remarks. This is not a loose panel with a lot of sort of informal chitchat. It's not our style in terms of how we make this work, so that everyone has gone to, in some cases the efforts of audio-visual presentations and other things that will assist you in understanding exactly what the housing issues of various sorts in Brooklyn are.
Further, this is a copy of the Institute's Review Properties. This is an issue which happens to be about real estate investment trusts, but the issue for the fall of 2000 will be the excerptive transcripts and summary and other materials presented within this conference. There is an issue on the Bronx, and this is part of the issue on the Bronx that we did as part of the 1999 City Roundtable and those of you who would like to receive this, please make sure that you call the Institute's office, you have the phone number and we will put you on the mailing list for this come the fall. Properties is also obviously available by subscription, but for those of you who may just be interested really in the Brooklyn issue, please don't hesitate to all the Institute's offices.
Now, let me just take a brief moment to talk a little bit about the Institute itself. It was founded approximately three and a half years ago through the great beneficence and development of the endowment for the Institute by William Newman, the chairman at that point of New Plan Realty Trust, one of the great American wreaths. Bill had been an alumnus of Baruch College, his son had been an alumnus of Baruch College, and Bill's father had been an alumnus of Baruch College, the business school. In those days it wasn't Baruch College, it was the School of Business of the City College of New York, and there may be some other alumni here of that institution. We welcome you especially. It was Bill's vision that remained, unfortunately he is not in (inaudible) with us today, to create within the construct of the City University an institute that could serve both the real estate industry and real estate organizations of the City, whether they're public sector organizations such as the City Planning Commission and the Department of Housing Preservation Development, the New York City Housing Authority, the New York State Department of Housing and Community Resources, and the various community civic organizations that operate within the framework of their own individual neighborhoods and under the auspices and for the service of their own individual communities to sort out some of the extraordinarily complex planning, development, financing issues that compose this extraordinary city and this extraordinary region. And it has been the Institute's good fortune to be able to sponsor a long series of programs in its first three and a half years that have systematically explored the most important of these issues. Brooklyn, we think, stands, of course, at the top of the list in an exceedingly unique position within the framework of the City with extraordinary resources in terms of geography, infrastructure, many of the things which we learned about last week and with the vision and leadership of a Borough President and the Deputy Borough President that have provided some of the passion and a great deal of the momentum that has brought Brooklyn really to the fore, not simply as a borough within the City, but as the second city of the region. Not that it doesn't face competition in that regard from those places across the river or maybe in some other arenas of this metropolitan area, but we, I think, in our own hubris, like to think that Brooklyn has a special place and special opportunities and a the strength of history and position that will carry it forward and you will learn about some of the housing issue that face Brooklyn today.
Jeanette Gadson, the first woman of color to serve as Deputy Borough President of Brooklyn, was sworn into office in January of 1993 and continues to serve in that position. As deputy to Borough President Howard Golden, Ms. Gadson has been instrumental in both increasing and refurbishing the existing stock of middle income and affordable housing to the borough. The development of the Saratoga Square Niermeyer (phonetic) and Bushwick Greene Houses are just a few examples of the successes that she and the Borough President share. She has similarly been a steadfast proponent of the need for increased and innovative public housing evidenced by her dedication to the redevelopment of Prospect Plaza in Brownsville. Ms. Gadson's concern with economic development has resulted in numerous achievements including the development of MetroTech Center and Atlantic Center and Terminal in Downtown Brooklyn. She has assumed a lead role in the Borough President's Hoyt-Schermerhorn Task Force created to make recommendations on development in Boreum Hill. Ms. Gadson has been instrumental in the development of Brooklyn Mills, the garment incubator and technology center in Sunset Park designed to foster the revitalization of the garment industry and bolster the manufacturing base in Brooklyn. Her work with the training and employment counsel of Brooklyn founded by the Borough President has resulted in the use of borough resources to foster work force development and job creation. Ms. Gadson effectively lobbied against the privatization of and potential loss of 200 jobs at Brooklyn Central Laundry which provide laundry service to Health and Hospitals Corporation facilities.
Ms. Gadson has been a driving force in the Borough President's efforts to improve community relations throughout Brooklyn, contributing significantly to the meetings to the Crown Heights Coalition and moderating many sessions of its annual Unity Speaker series. Similarly she maintains an open dialog with the Borough President with regard to both women's and minority issues and assists in the organization of events for both Women's and Black History Months. She is currently spearheading the Brooklyn Census 2000 Task Force, which we hope you've all long since responded to, formed by the Borough President Golden after the enormous failures of the 1980 and 1990 censuses.
Please join me in welcoming Jeanette Gadson.
MR. GADSON
MS. GADSON: I'm not taking off my jacket, I'm taking off my shoes.
Thank you, Mr. Wollman.
Certainly I am delighted to see so many people here this morning to learn more about Brooklyn. I want to thank Baruch College and the Newman Institute for organizing this series of roundtable programs about the Borough of Brooklyn.
Two weeks ago Borough President Howard Golden gave you an overview about the borough and the renaissance that has transformed Brooklyn over the past decade. He talked about developments that have strengthened the Brooklyn economy and providing new jobs for our residents. He also talked about the revival of Downtown Brooklyn and our regional commercial areas around the borough. This morning I would like to speak with you about Brooklyn's residential future and about challenges we face in the area of housing.
In light of shrinking government subsidies for housing, Borough President Golden and I have turned our attention to identifying and pursuing creative ways to preserve and build upon Brooklyn's diverse housing stock. As we explore these options, it is clear that we face some major issues. Some of our challenges come from an unintended impact of the City's current economic boom, disruption of the stability of Brooklyn's housing market by increasing rents and reduced availability of housing for low and middle income families. I see two fundamental issues regarding housing policy as we begin this 21st century.
First, there is a shortage of affordable housing for a significant portion of Brooklyn residents, those of low and moderate income. And second, there is a severe shortage of market rate middle income housing for the borough's middle class. Many young, urban professionals are currently seeking and finding better housing options and values in the suburbs. The consequences of this exodus are extremely harmful to Brooklyn as well as the entire City's economic prospects. If the borough's neighborhoods and economy are to grow, we must provide a range of housing opportunities for residents of every income level. We must also provide housing opportunities for those who seek to move to Brooklyn in order to enjoy the finer quality of life offered in our borough. This is not only a problem for Brooklyn, it is a problem for every borough outside Manhattan. State Controller Carl McCall (phonetic) said in a recent report that the lack of affordable housing has an adverse impact on business relocation and expansion in New York City. Changing that situation should be our highest priority, but it isn't something that can be done easily. I am convinced that it will take more than a simple adjustment of existing programs to significantly increase the number of affordable housing units in Brooklyn. The programs that exist today are a jumble of unrelated rehabilitation and development activities and initiatives. While some of them may work well at meeting certain goals, they do not represent a coherent policy that reflects a commitment by the City to a broad based housing agenda.
I believe that a comprehensive and coordinated plan must be developed to address the lack of housing for the middle class as well as the preservation of the borough's affordable housing stock. I believe that a new housing agenda for Brooklyn must encompass four crucial components. First, it must strongly encourage reuse of the existing nonresidential structures to create new housing units. We must seek opportunities to put vacant and underutilized buildings into use for housing. Second, a new housing agenda for Brooklyn must promote market rate home ownership opportunities for middle income residents. Third, we must find ways to reduce housing construction costs. And fourth, we must do all we can to preserve Brooklyn's existing supply of affordable housing.
The first piece of this new housing agenda regards the use of nonresidential property. As other speakers this morning will point out, in addition to our extraordinary range of housing stock in Brooklyn, we also have a significant number of unused or underutilized manufacturing and commercial buildings. I do not believe we should lose existing commercial or manufacturing uses to housing, but rather we should identify areas of the borough that are no longer used for the original purposes. Once identified, we should seek to convert them to low, moderate and middle income housing. In 1999 we were pleased to announce several housing projects that prominently featured adapted reuse of existing nonresidential buildings. Among these were a former buyer house in Ocean Hill, an old warehouse in Park Slope, a former parochial school in Carroll Gardens, the abandoned Clairmont Armory in Fort Greene and the old Sullivan Hotel in Red Hook. Several of these projects, including the warehouse and the former school, were developed under the Housing Development Corporation's Middle Income Housing Initiative. In this program HDC subsidizes each unit through a second mortgage at one percent interest. This is an extremely valuable program because it seeks to bridge the development gap between luxury and low income housing. I strongly support HDC's mission and urge expansion of the program to other neighborhoods in Brooklyn. The program's success underscores the importance of creatively reusing Brooklyn's existing nonresidential buildings to produce new units of housing. It is an approach that is sound development strategy.
Creating more market rate housing in Brooklyn is another goal that should get top priority. Brooklyn's middle income residents are increasingly finding themselves squeezed out of the housing market. Their incomes disqualify them for publicly subsidized housing, yet they are largely unable to afford the soaring market rate rents and sales prices for family sized apartments and houses. The Borough President has long called for the creation of strategies to spur private developers to build middle income housing in Brooklyn, including such programs as the Partnership Program. However, new middle income housing programs must be developed that utilize small parcels than those required by Partnership developers.
I am also concerned by the fact that new housing construction starts in Brooklyn have lagged well behind the rest of the City for the last several years. With the Brooklyn economy in the strongest condition it has been in 50 years, we need to examine some of the reasons why our borough is not enjoying the same boom in new housing starts. One reason is simple economics and another relates to the availability of open land. It has been decades since a developer has started construction on a project that approaches the more than 800 units that are now under construction on the site of the former Brighton Beach Baths. The rate of sales for the luxury market rate apartments known as Oceana is proof positive that there is a strong demand for market rate housing in Brooklyn. Despite the achievement of the construction of Oceana, the fact remains that Manhattan gives the greatest interest from housing developers because that is where they can get the highest rate of return. Given the obstacles and the scarcity of land in the borough, we need to become more creative in directing public policy in a way that will increase new housing starts. The construction of market rate middle income housing will encourage Brooklyn's middle class families to remain in the borough because of expanded home ownership and rental opportunities. As middle income families move from apartments into new homes, moderate and low income individuals and families will have the opportunity to move into rental apartments that were previously unavailable. We call this process moving up the housing ladder. Currently the rate of home ownership in Brooklyn is well below that of the nation and other metropolitan areas, including New York City as a whole. Nationwide nearly two-thirds of housing units are occupied by owners. In New York City that percentage is one-third. In Brooklyn, however, the home ownership rate is only 23 percent.
In my judgement, one of the objectives of this human roundtable forum should be identify ways to increase Brooklyn's home ownership rate in the coming years. Even in partnership with private and nonprofit developers, government cannot create the necessary volume of market rate housing without increased private sector involvement. The City currently has several programs that provide tax or zoning benefits to developers of market rate housing in exchange for linking their projects to affordable housing, either on or offsite. These include the AD20 program, 421A certificate, and inclusionary selling programs. We must look at ways to tailor these programs which work in Manhattan, but do not meet Brooklyn's needs. A major obstacle to any new housing development, however, is a lack of available space. There are not many assemblages of vacant land in Brooklyn available for housing and HPD has a limited budget for the urban renewal actions required to assemble additional sites. So in addition to whatever large (inaudible) sites currently exist, as we see if from Borough Hall, there are only three other approaches to finding building sites. Using in-fill techniques in established neighborhoods, adopting existing structures or buildings in areas where obsolete housing is removed. Many of you are keenly aware that there are a number of potential housing sites in the borough, both public and private, where development has been obstructed by political, environmental or financial barriers that must be overcome. There are publicly owned residential sites in the northeastern parts of the borough, in addition to a large tract of fallow land in southeast Brooklyn where disposition of development of residential land is long overdue. A joint effort by the City community boards and the Housing Authority is needed to identify the conditions under which some of these sites might move forward to construction. While the agency does not have the funding for direct subsidies, we at Borough Hall believe there is much that HPD could do to encourage private residential development. This ranges from offsite infrastructure work to assistance in planning zoning and environmental actions that could expedite and enhance the affordability of market rate housing.
Another crucial component of our 21st century housing agenda for Brooklyn is the reduction of housing construction halts. For the borough to begin to see significant new housing activity in the immediate future, the City must untangle the red tape of rules and regulations that currently govern housing development. I believe that the most efficient way to achieve that goal is to establish a mayoral housing recommendation task force. The purpose of such a task force would be to review reservations and recommend changes that would streamline the housing development process. The primary goal of the task force would be to reduce the cost of housing development. The task force I am proposing should include HPD, the Department of Design and Construction, the Department of City Planning and the Department of Buildings and local elected officials with the advisory roles for housing developers.
What are some of the prevailing issues the task force will confront? We should begin by looking at direct governmental costs. In New York City filing fees and permits require the residential construction costs nearly $1,000 per unit. There are also additional fees, for dumping debris, cutting down trees, cutting into utility lines, curb cuts, tax abatement applications, and filings at the Board of Standards and Appeals. Taxes imposed on development are also substantial. These include real estate tax, sales tax, mortgage recording tax and transfer taxes. The total cost of these direct public impositions for new housing can be five to ten percent of development costs.
The easiest and most direct way for the City and State to reduce housing costs and thereby encourage new construction, is to eliminate these fees. The tax laws in consultation with the State should review each of these fees and taxes and make recommendations about which should be eliminated or reduced. The government approval process itself also impacts the cost of housing development. Even after a project has received all the discretionary approvals which are required, things like ULUP (phonetic), SEQUA (phonetic) variances and special permits, a developer must seek the approval of at least three separate agencies. In addition to the plan examination and inspection processes of the Department of Buildings, a builder's development plan must be approved by the Department of Environmental Protection, the Bureau of Highways and the Fire Department. If there are trees to be removed, a distinctive sidewalk or a landmark district involved in the project, a developer might also have to visit the Parks Department, Transit Authority, Arts Commission, Landmark Commission or even some other agencies.
In my judgement, there are aspects of the New York City Building Code which are directly responsible for the lack of some new multifamily construction in Brooklyn. The Building Code imposes expensive construction requirements on buildings with more than two residential units. Structures with more than two units cost 15 to 20 percent more to build than two-family homes. While safety protections for multifamily buildings are critical, there is a need to reconsider which elements of the city building code place excessive requirements on low-rise multifamily residential buildings. Both community leaders and developers tell us that many communities in Brooklyn would be appropriate for the expanding development of three-family homes and low-rise condominiums. This scale of housing still preserves the character of the community, but also provides the opportunity to maximize density and to create more rental housing in the borough. We have seen this approach work successfully at Saratoga Square in central Brooklyn, where four-story structures with a combination of duplexes and simplex apartments have flourished. Under the City's building code, adding a fourth floor triggers additional code requirements which make new construction of four-story three-family homes almost impossible in most situations.
The housing task force should review the City's building codes as they relate to three and four-family homes. Their goal should be to recommend changes in the code, to reduce construction costs while preserving the necessary safety measures.
The last item I want to suggest for our new housing agenda, and the one closest to my heart, is the development of affordable housing for low income residents. It is absolutely essential that we preserve and cultivate new opportunities for affordable housing at the beginning of our housing ladder. Brooklyn has traditionally benefitted from partnerships between the federal government and the private sector to provide affordable housing. However, Washington's reduced investment in direct housing subsidy programs has threatened this supply. The critical issue for Brooklyn is the extent to which affordable housing resources can be leveraged in light of this changing federal policy. With the diminished supply of federal Section 8 subsidies, new methods must be found to preserve and maintain the borough's affordable housing supply. Once successful approach has been utilized in Ocean Hill-Brownsville where new townhouses will be built as part of HUD's Hope 6 revitalization grant. The grant to be implemented at Prospect Plaza Houses is designed to transform public housing communities from islands of despair and poverty into a fine and integral part of larger neighborhoods.
While we are pleased with the success of Prospect Plaza, a more pressing issue concerns the renewal of expiring Section 8 certificates and vouchers. Brooklyn's affordable housing market greatly depends on the flexibility of Section 8 rent subsidies. The Section 8 program must be preserved and expanded in order to protect our Borough's affordable housing stock and to maintain affordability for Brooklyn's low and moderate income residents. I believe the availability of abandoned or run-down small residential properties is another opportunity for private housing development. For occupied buildings in stable neighborhoods where rent rolls are sufficient, building with fewer than six units are also viable investment properties. This segment of the affordable housing stock must be preserved at all costs. However, these buildings are hard to finance since small multifamily loans are expensive, the banks to originate and difficult to sell in the secondary mortgage market. There are a variety of programs offered by HPD and HUD to rehabilitate small buildings (inaudible). However, by the time the buildings can be resold to begin the process, they are in such poor condition that the cost of rehabilitation has become prohibitive and the amount of public funding required to put them back in service is hard for government to justify.
At Borough Hall we think the City should develop a program to support private acquisition and rehabilitation of small buildings before they come into public ownership or their liens are sold to third parties. Such a program could rely on local bank underwriting and servicing together with nonprofit services for technical assistance to home buyers, perhaps through an organization like Neighborhood Housing Services, which has been very successful in Brooklyn. With HPD's new commitment to adapting program regulations to meet local housing needs, it may also be possible for banks and local community development groups to cooperate in a more efficient, private sector approach in the rehabilitation of small owner occupied and mixed-use properties.
One thing is absolutely certain, preserving Brooklyn's affordable housing stock is a wise and cost effective governmental strategy. I thank Baruch College and the Newman Institute for this opportunity to discuss my views on things we can do to insure a bright residential future for Brooklyn. I believe the time has come for Brooklyn to focus on reviving its housing market by building upon the many strengths and opportunities in the borough. We need to invest time, energy and resources in the rehabilitation of our housing stock while also doing everything we can to encourage rehabilitation and new construction. We need to look at the governmental requirements which hold back new housing starts and find ways to change them. And we need to reexamine zoning regulations and other public policies which have an adverse impact on the cost of new construction in Brooklyn. Our goal is that every Brooklyn resident and everyone who wants to be one be able to live safely and affordably. We strongly support the development and preservation of new housing opportunities for Brooklyn's growing middle class, but at the same time we recognize that every single Brooklyn resident deserves a starting place on the housing ladder.
As you continue your roundtable discussions this morning, you will hear others talk about housing challenges and opportunities in the Borough of Brooklyn. From Borough Hall we look to the decade ahead with optimism and determination that the future is in our hands. We also believe that discussions such as this Newman Institute program will help provide new ideas and ways to achieve a better quality of life for all Brooklynites.
Again, I thank you, I thank Baruch College and all who come this morning to hear about the Borough of Brooklyn which we believe is the best part of New York City. And let me just end by saying and we have air-conditioning.
Thank you.
MR. WOLLMAN
MR. WOLLMAN: Well, it sounds mighty good from this perspective, all that air-conditioning. They are working on it. I hope we will have it in the course of the morning.
I would like all of the people who are standing to try to finds a seat. There are enough seats here. There will be a few more chairs brought in. Please come in, there are seats over here. Don't be bashful right now.
We're going to take just a short moment to work on the power point system for one of the next speakers and I would like to invite Ed Regowski (phonetic) and Kim Hardy to please take places at the table and we're waiting for Angela Battaglia to arrive.
While we are getting the power point presentation set, I would like to describe a Newman Institute program that we would like to present to make at least an offer to one of the key community organizations in Brooklyn. And if you can ignore the activity to my left and listen to this, it may be something which may have some impact on something that your own group is dealing with.
We are currently working on a community development plan with the Reverend Floyd Flake and the Allen AME Housing Corporation in Queens. The community development plan concerns the housing and retail development issues along Merrick Boulevard, of which the Allen Cathedral is one of the component institutions in that community. We are dealing with issues through the Newman Institute consulting wing of the Institute which brings together both resources of the Institute as well as other professionals, appropriate professionals, by that I mean knowledgeable professionals in the community development world, to help community organizations such as Allen deal with the development of a community plan. Very often, and it is in the case of the Allen plan especially, that the issues of rezoning, in effect taking on the existing zoning, in that case of Merrick Boulevard, in the case of Brooklyn as we just heard from the Deputy Borough President the issues of rezoning may be the important issue than the creation of new middle income as well as moderate and affordable housing. So I encourage those of you who lead community organizations in Brooklyn or who have connections to those who do lead them, if there is an interest in the Newman Institute in working with us on your community, we are going to choose from among a group of applicants one Brooklyn community to devote almost an entire year's worth of resources on the Institute's part to create a community development plan. We have been working with Allen for almost ten months now and we are just about finished with it and we look forward to being be able to start a plan for a similar Brooklyn neighborhood on the 1st of July. So we encourage you to be in contact with me directly at the Institute about that.
I would like now to welcome, to change the order slightly to give the chance of the technicians here to get the computer and the projector in this complicated world we live in to talk to each other to see if Ed Regowski would join me at the podium.
Mr. Regowski was appointed to the New York City Planning Commission by Brooklyn Borough President Howard Golden in 1990. He is professor emeritus of political science and urban studies at our sister CUNY institution, Brooklyn College. He is currently the city editor of CUNY TV and the host of Metroview, a weekly urban affairs program. Mr. Regowski also is a founding member and vice-president emeritus of the Flatbush Development Corporation and is currently the interim chairman of the board of Brooklyn Information and Culture.
Please welcome Ed Regowski.
(inaudible) I will say that we have, as part of the rules of the way the roundtable works, I am the great arbiter in terms of time. So, the next three speakers divide essentially 15 minutes among themselves. Each of them has 15 minutes and when I hold up this, it signals to each of them that there are two minutes left to go and we are tough about enforcing these time rules.
Thank you and welcome.
MR. REGOWSKI
MR. REGOWSKI: I want to pledge to you, first of all, that you will have no trouble enforcing the time limits where I am concerned. I've been in the audience with you thus far and I know that it takes a great deal to sit here with any degree of comfort because of mechanical breakdown and I don't want to impose any more suffering on anyone.
I am very appreciative of this opportunity to join you, I am very appreciative to Baruch College and to the Newman Institute for putting its focus on Brooklyn and for declaring what some of us have known for quite some time, that Brooklyn is indeed ascendant.
One of the typical ways we have of communicating in this City is to talk about Manhattan and the outer boroughs. I have, for a long time, contended that we ought to be talking Manhattan and other boroughs. What is it about being in or out, an outer of Manhattan that's so sets our focus? The Regional Plan Association has known for decades that New York City needs multiple centers for its business activity and Downtown Brooklyn is indeed the third of New York City's central business district after downtown and midtown on the island of Manhattan. And you heard a great deal at the first session from the Borough President and others about the downtown and what's happening. Today's focus having to do with housing and neighborhoods takes us beyond that. I want to take from remarks I've prepared just to deal with a few excerpts with you because I don't want to repeat, again, particularly given the conditions in the room, so much that was rich and important in what Deputy Borough President Gadson had to say in terms of an overview of housing policy needs and reformations that are important to the borough. So let me try and highlight a few things.
A little bit about the how and a little bit about the where, which I think are both important if we are to make major gains in creating more affordable and market rate housing and our needs range across those categories and beyond. For a long time there are those in this City who decry the lack of comprehensive planning and others are very critical of the City Planning Commission in its failure to plan for New York. Having been a member of the Commission for a decade by appointment of the Borough President of Brooklyn, I can tell you that I share in that criticism because of the way in which we do things here in New York. The City Planning Commission is not a planning agency, it is an approving agency. It receives or responds to applications from the Department of City Planning and from others and the private sector to approve zoning changes, to map for other areas, change what districts or map for certain places, to approve developments of various scale, commercial, residential and otherwise. We do not, at the Commission, initiate. It strikes me that that's a major failing on our part and it is reflected in the kinds of problems that the Deputy Borough President talked about in terms of trying to achieve gains in the creation of housing. When you don't have something that sits at the center with enough authority to plan comprehensively and to support that plan with a budgetary capacity that supports that activity, then you wind up meandering, stumbling and being subject to the vagaries of the private market and to the changes in federal policy and even state policy with respect to the provision of subsidies. And that largely our condition in New York City.
At one time the New York City Planning Commission was the source for the City's capital budget. That's no longer the case, hasn't been the case for decades. As a result, there is no clout to match intention. A number of efforts were made in the 1989 charter revision to create processes that would yield reports that would help us to focus our intentions and our energies and our resources, four-year comprehensive plans, ten-year capital budget plans and the like. They have become, in some cases, absent and in other cases covered with dust the moment they're printed and to be ignored, not to be taken seriously as a guidance for policy. Yes, the mandate is responded to, but what goes into them with respect to capital expenditure is not sufficient. What we need is an approach to comprehensive planning, a commitment to comprehensive planning, that will enable us to identify the land, where it is in terms of assemblages of any large scale, of in-fill opportunities where they exist, of the kind of housing that will be appropriate for different neighborhoods and to begin on a systematic basis to turn those ideas into plans, into funded projects, which can be achieved.
To be sure, this means inviting the private sector to participate to the fullest and in order to do that we have to recognize the forces that drive the private sector. We cannot ask that their efforts be given away to us, to the public at large, except that they're concerned for making money be recognized. This is what the nature of housing construction largely is. We already know that in New York City the luxury market will address itself and its needs and can flourish and does. It is the ranges below that luxury level as the upper rates of market down to affordability and subsidized housing which are our concern for the greater number of people, and we've come to understand that a greater good for a greater number of people is what's necessary for any of us and for all of us to flourish. That interdependence up and down the socioeconomic scale is a point often lost, but we should not, in this case, be unmindful of it. We need a process for comprehensive planning that identifies and coordinates from the neighborhood level on up.
What was just announced with respect to the Newman Institute's plan to work with a given community development corporation in a Brooklyn neighborhood is what ought to be happening in every Brooklyn neighborhood. It can't be done by this one Institute alone, but the infrastructure in terms of a not-for-profit organization and city agencies can be built out and brought together to achieve that goal, so that folks on a block can talk about what the possibilities on their block are with respect to buildings not in good condition that need to be saved before they are so deteriorated that they will be too expensive to rehab so that we can't fund is, to lots that ought to be filled in with housing, to community gardens that ought to be preserved where they play a role in the life of a neighborhood and provide open space.
Sitting as a member of the Commission I watch applications come through over the decade for batches of lots to be sold at auction. The City has them and wants to dispose of them. So we have what we call dispos, dispositions. Earlier in the decade we were able to oblige the department to produce plans for neighborhoods where significant amounts of property existed to be disposed of so that it might be a guiding principal to help us in deciding on these applications which come from the Real Estate Unit of the Department of Citywide Administrative Services, which is not a planning agency, but it, like the Department of Housing Preservation and Development, but like the Economic Development Corporation, among scores of other agencies, they all plan. The trouble in New York is not that no one plans, is that too many people plan and nobody coordinates the planning. And that's been true for too long now and doesn't get addressed through charter change or anything else, but it is a reason why we don't make the kind of progress we need to be making. I'm not quite asking that we have the re-creation of a Robert Moses building czar, but we need someplace where we put power authority and accountability with resources together based on input at every level of this City in order to produce results, and I think that we can do that without creating monsters that will come back to haunt us in the future.
But in responding to these disposition plans, they may include, for example, ten sites or 20 sites or 40 sites or 70 sites, as one recent application did. One application in one few set of papers with a one sentence description of where this property is, we are asked to grant permission for it to be disposed. Moreover, when we say but if you had enough additional effort in this particular block or in that area, you might achieve an assemblage which would be inviting for private or other kind of development. We are told that, well, that could happen, but we don't want to keep anything on hold, we want to create the permission to dispose of it and then if a plan comes along, we won't dispose of it. So that the leverage involved form the planner's angle is don't put it into the disposition opera until you're ready to sell it because you know that you need the private market to do that. That leverage is lost. Approve it now in the event that it becomes impossible to exercise anything like a comprehensive view when one does that. And we need that comprehensive view from the neighborhood level on up accumulated at the borough level in order to make the kinds of gains which are necessary.
That's something of the how and maybe a little of the why. The big question is what about the where. Where are the opportunities? There are opportunities all over Brooklyn. You heard the Deputy Borough President talk about places where we're building new communities in Saratoga Square and the like, and Brownsville and East New York are the largest assemblages of open land available or possible. But there are all kinds of opportunities. If you reverse the focus and look at northern Brooklyn, that is from the downtown radiating outward to the brownstone neighborhoods and beyond that surround it, you will know that here's another way to approach examination of opportunities. The Fourth Avenue corridor running from Flatbush Avenue south to the water, has been rezoned close to its downtown nexus for higher rise construction, as should be the case, along a very wide street. In-fill opportunities and the assemblages of significant possibilities of larger sites is there in Prospect Heights from Atlantic Avenue on the north to Grand Army Plaza on the south, from Flatbush Avenue to Washington Avenue. It is a mixed-use area and that there's a tremendous housing stock and much of it in great condition, some abandoned manufacturing type buildings and others. There are two projects underway, the old Daily News building is being redone for private apartments, as condos or co-ops, and another structure along Atlantic Avenue, along Pacific Street, one block in. That wedge, which is close to the downtown, and certainly close to Atlantic Center and to the tremendous transportation hub, is another example of what one can do, but you need to get out of cars and walk neighborhoods and talk to people who live there and see adjacencies in order to understand the potential for terrific development. Just as Fort Greene and Clinton Hill, although they're hot in terms of the real estate market, still have significant potential within them as well.
There are places, there are needs, there are opportunities, support from the City government. A redirection of federal efforts, and that we hope will come perhaps soon, as we begin this new century and elect a new administration, federal reinvestment of housing in the cities at every level is obviously vital as well to address financial needs.
Those are some of my thoughts this morning as I try to sum up quickly and give us a chance to catch our breaths.
Thank you so much and congratulations to all who have attended and who are putting this program together.
MR. WOLLMAN
MR. WOLLMAN: I guess I'm going to find out if we are ready with Kim Hardy's power point. If you will give me just a moment. Are we ready with that? While we're trying to get this organized, are there any questions about anything that I've said this morning that anyone would like to address or anything that Mr. Regowski has said that you'd like to ask him.
A VOICE
A VOICE: What Ed just said was so, so important and there are a lot of neighborhood plans that are underway. We need more of them and we do need to plan from the grass roots up, but might you consider putting your SUNY group on staffing a Brooklyn-wide plan coordination because that's what you really, really need most of all, the overall framework for what's going on in Red Hook and Community Board 1 and Bay Ridge, and there's so much going on, but no one is pulling it together.
MR. WOLLMAN
MR. WOLLMAN: Did everyone hear that? The point was made that there are many community grass roots organizations now in Brooklyn who are working on individual neighborhood plans, there is no overall coordinating agency that is really pulling all these elements together. It is something of a point that Ed Regowski made in a slightly different framework and the question was whether the Institute would be able to facilitate that. I have to say that the Institute is not -- there are students who participate in the creation of the community development plans that I described to you, but it is essentially a group of major New York City professions who will take on the individual community organization that we will choose to work with. The students will assist them. And I think the answer certainly is that we would be willing to consider the idea of a coordinating document of the kind that you are talking about.
In the issue of properties that will be devoted to Brooklyn, it's inevitable that we would have attempted to do such a set of coordinating maps and documents in any event, so that we will come to that.
A VOICE
A VOICE: I just wanted to respond to some of the things I've heard so far.
MR. WOLLMAN
MR. WOLLMAN: Would you introduce yourself.
MR. KRUCHMAN
MR. KRUCHMAN: Irwin Kruchman (phonetic). I'm a resident of Brooklyn.
First of all, we talk about needing housing. You've got to remember that Brooklyn has a huge population of people who cannot afford housing, any kind of decent housing. Either they're below the poverty line or they're unemployed, they form a large percentage of our population. We got opportunities, the Planning Commission has opportunities, the Borough President has opportunities to do something about rezoning areas, for instance, down in Brighton Beach shown over here the City rezoned a piece of property, the old baths, from 275 units to 850. That's a big, big increase. And yet they didn't insist on any affordable housing being put in that percentage. Therefore, they're building 250,000 to a million dollar houses and who can afford that, only luxury housing. They should have insisted on at least 100, 150 of affordable housing.
The third part is that where are we going to put jobs for the lower income people? You talk about the need for something to support. Until we can support this population, the manufacturing areas should be saved so, like in L.A. where they're converting a lot of the old manufacturing buildings, they're converting them into light manufacturing or part of the internet or part of the software planning. We put hospitals, we put prisons, we put meat markets, we put everything in, we put a Home Depot into a residential area and wiped out 68 units and white sands. So we hear a lot of things going on and a lot of, you know, this is a great era now and I've seen a lot of good things happening. When I look at Park Slope, the spread of rehabilitation of a lot of houses along that area, but I don't see in action what the words say here.
MR. WOLLMAN
MR. WOLLMAN: Thank you.
I'd like to take the opportunity to introduce one of the great friends of the Institute and one of the great friends of housing in New York City.
Kimberly Hardy serves as Deputy Commissioner for Development at the Department of Housing Preservation and Development for the City of New York. She is, if there is such a thing as Ms. Housing New York City, it is Kim Hardy, who knows the City, knows the boroughs, knows the programs and knows the operation of her department unlike any one of us. She is responsible for HPD's housing finance transactions, mixed-use construction projects and affordable home ownership initiatives. In addition, she oversees the Mitchell-Lama developments and the disposition of City-owned property. Ms. Hardy previously served as Special Counsel to the New York Empowerment Zone Corporation. As I said, she is one of the most eloquent and important spokespeople for housing in the City.
We're going to try in just a moment to try one more thing, a cable switch, to try to get Ms. Hardy's presentation to you and then we'll start.
I think what I would like to do while this is going on is to introduce to you, not Kim Hardy, who I will call on in just a moment, but I would like to welcome Angela Battaglia, the Commissioner of the New York City Planning Commission. She previously served as Executive Director of the Housing Office of the Ridgewood Senior Citizens Council, Inc. Ms. Battaglia is a founding member of the Public Housing Task Force and founder and chairperson of the Northern Bushwick Residents Association, Inc.
For those of you who have not been here before, we do not usually have this level technical or other confusion. But having said that, I want you to join me in welcoming Angela Battaglia.
MS. BATTAGLIA
MS. BATTAGLIA: Good morning, everybody. I'll take a few minutes here to organize myself. I will be brief. I know it's hot.
As Jeff said, I am Angela Battaglia. I happen to still be the Executive Director of Housing for the Ridgewood Bushwick Senior Citizens Council and I proudly serve on the New York City Planning Commission.
In many ways one can see me as a hometown girl, born and raised in Bushwick. I spent over 40 years of my life there. More than half of those years were devoted, and still are, to redeveloping a neighborhood that was devastated in the '70s by owner disinvestment and a rash of arson fires. Bear with me. I just walked in, being late is no fun.
After college I came back to Bushwick to give back to the community where I was raised and where my parents bought a home and proudly served as public servants, my dad being a member of the school board. So it was a family tradition that we would be community activists. 22 years later I see a neighborhood where people from other boroughs, even Manhattan, come to relocate. What it took was a community coming together with government with a vision and a plan which resulted in new schools, a new police precinct, a state of the art youth center, a brand new nursing home which is about to go into operation in about two months, and thousands of new units of housing, some senior housing, and I want to show you one photo of one of the senior developments. This is an example of taking a very small parcel of land, but recognizing a need for senior housing. This was built under the federal 202 Program and Housing 95 low income seniors. This exists in Bushwick today. It's about four years old.
We saw as a result of that plan, which, by the way, spanned administrations going from Koch to Dinkins to the kind Guiliani administration, all kept the same commitment to rebuilding Bushwick. We saw thousands of units of public housing, all low-rise, some of them in that townhouse concept which vest people in their community because they make they feel like they're part and parcel, also which created an economic mix because not only were people on people assistance housed, which is important because in many ways or many cases there is nowhere else for those people who are trying to better their lives to go. At the same time we house families in those public housing developments that are moderate income and in some cases even relatively good income, and they've chosen to stay in Bushwick because of the revitalization.
We have rehabilitated, under the auspices of my agency, the Ridgewood Bushwick Senior Citizens Council, we have rehabilitated thousands or constructed thousands of family housing rental units. In some cases, with the help of the City, through one of their programs known as Community Management, which no longer exists, but we have rehabilitated hundreds of units and we sold them back to low income tenants as tenant cooperatives. And today if you came to Bushwick it might even be a place that you chose to relocate.
Most notably and probably what has most picked up, the face of the neighborhood which has really given it its facelift which draws people to it, is that New York City, in conjunction with the State through the New York State Affordable Homes Program and the New York City Housing Partnership Program, has already developed over 600 units of two-family homes all bringing home ownership opportunities to the community, most of which were sold to people from the community, although they were (inaudible) and we did get people from other boroughs and there will be another, I'm going to say, about 500 more of those homes marked within the future. And right here you see one of them. This was a 60-home development known as Madison Park One. And this particular development was built on side streets between Broadway and Bushwick Avenue in Bushwick and any of you who are familiar with Bushwick will know that subsequent, or during, I should say, the blackout of 1977, Broadway was decimated. If you saw it today I think, again, you would be proud of the effects of the relationship between government and community.
In my joint roles as community activist and City Planning Commissioner, I am committed to residential development throughout the borough. I should have started by thanking the Newman Institute and the Borough President for hosting this and inviting me here today.
Residential development, however, must be contextual and in scale with neighborhood character and as you probably do know, we on the Planning Commission are considering a major amendment to the zoning text in terms of bulk to make it more unified and to keep height limits to levels that will be contextual in respective neighborhoods.
Housing development should be combined with the development of neighborhood facilities, schools, community centers, retail opportunities, to the people who are moving into the community or who are relocating within the community. We must reconsider the rezoning of underutilized manufacturing areas for housing and in all cases I think everyone would probably agree here, that community input is vital.
I thank you for the opportunity to speak here today.
Just for a second, I know this is a small rendering of it, but I do want to show people wherever you see little marks of color is where two-family homes have been built, marketed, they're now occupied or planned in Bushwick, and if you could just imagine, I did have a much larger map, but I just couldn't carry it all, but if you could imagine that 20 years ago all of where you see colored spots was vacant, debris-strewned, in many cases rodent-strewned, now sees housing development and we're really proud of that accomplishment.
And once again, I thank you for having me.
MR. WOLLMAN
MR. WOLLMAN: The first shall be last or I guess that there is something like that that we can say. But, again, I'd like you to now welcome Kim Hardy, Deputy Commissioner for Development at the Department of Housing Preservation and Development for the City.
MS. HARDY
MS. HARDY: Good morning. And, Henry, thank you for that very, very generous introduction. Until you started discussing the divisions that I work with, I thought you were talking about my colleague, Mary (inaudible).
We're having a little technical difficulty. We put together a power point presentation for you today just to summarize some of the initiatives that HPD is working on and we hope that we'll be able to get that started, but I think I'll try to start. I have one -- we almost brought in hand notes for everyone and now I regret that we didn't. But we were dependent on the technology, but if it doesn't work for us, what I'll do is just go over what we had planned and if anyone would like copies of what we had planned to show you, we can't show it to you, you should see that young man over there in the dark suit and burgundy tie who worked so diligently to put this presentation together.
It's a delight for me to be here. It's always a pleasure to be at the Newman Institute. Certainly it's nice to see so many of my colleagues from HPD here who are far more knowledgeable than I am regarding Brooklyn and so I encourage them to add any comments from the audience if they think I have perhaps missed a point. We also had another little issue, Henry, because originally I was scheduled to speak on the residential future of Brooklyn and creating housing for a range of income levels, but we agreed to come in at 9:00, but we did not change our subject matter. So, in my speech, although I think in the program you have it I'm to speak on Brooklyn's strategic assets. Strategic assets will turn into comments regarding all of our initiatives that are really going to create housing for a range of income levels.
HPD's focus over the last few years, certainly since the Guiliani administration, came into power in 1994, has really involved the disposition of City-owned property and we have done that in a number of ways. In addition to that, we're focusing on affordable housing in our development office and affordable has a very wide range of meetings. And I think I'm going to go through some of the affordable housing programs for you as well. Recently we've begun to also focus on the preservation aspect of our name and in doing so we're trying to preserve the property that is privately owned and we're doing that through what we call our antiabandonment efforts and in doing so we have a whole range of options that we're offering the private landlords hopefully to help the people that live in certain buildings. We're offering education to landlords, we're offering loan assistance to landlords and for landlords that refuse to rehab their dilapidated properties and bring them up to code, we're actually trying to take the buildings through a process we call third-party transfer process and give it to more responsible owners that we select through a RFQ process.
For our development program is was hopeful both to hear both Angela and the Deputy Borough President's comments because you will recall that Angela had a photo here of Partnership New Homes and that's been one of probably the most important affordable housing initiatives that the City has had. There are a few Partnership New Homes and neighborhood developers that I had spotted in the audience, the Partnership New Homes Program is a program that the New York City HPD works with New York City Housing Partnership to build townhouse family homes for ownership to purchasers with incomes between approximately 32,000 and $70,000. So it's a real middle class income program. The homes have been created all over the City. In Brooklyn alone, since 1994, there have been over 2,500 homes created in this program. The program receives subsidies so every unit of housing receives a $10,000 subsidy the City of New York as well as additional subsidies from the State of New York and there are tax exemptions associated with this program. And I'm sure -- how many of you are familiar with Partnership New Homes? Show of hands.
Another program that we're trying to reach moderate income homeowners is through the Niermeyer Program and that's a collaboration between HPD and East Brooklyn Congregation. There's also a Bronx aspect, but since we are concentrating on Brooklyn today, I'll just speak to the Brooklyn aspect. And the homes in that program range from about $100,000 to-- well, around $100,000, let's say, for people with incomes between 21,000 and $68,000. So, again, we're getting a similar but a little different, little lower range incomes are able to become homeowners under that program. That program also receives significant subsidies from HPD. The homes receive a property tax exemption. Over 300 homes have been created just since '94. There are several hundred more that were created before '94, but I have the figures with me today since January of '94. And we expect in the next phase of the program there will be about 1,200 single family homes created in Brooklyn in the Gateway Estates-Spring Creek area and some of you may have heard Mayor Giuliani in his State of the City remarks address that point.
We have a new initiative at HPD that we're very excited about and we call it the New Foundations Program and, again, it's a program where we're trying to put more housing on the market. We recently issued an RFP and we have received a response, we've had a very good response, there were a number of sites, about 20 or more sites that were in the Brooklyn area, primarily in East New York and Brownsville and we are very interested in selecting the developers for that and once we select the developers for those sites, the developers will receive no subsidy for these sites, and they will be able to market the homes at market rate prices. And there are no income restrictions for these homes. Those areas for a long time were areas where it was thought that you could not build housing without government subsidy and we found things (inaudible) to our planning office that there is actually some development taking place in those areas with developers. So we're just trying to capture the market and it's City-owned land, so, again, it ties into our plans to dispose of the City-owned property by selling it and getting it back to the private sector.
Another program that's been really successful and we had a couple of nice slides for you to see, is a program that HPD has worked on with Enterprise Foundation and that was the City Home Program. And City Home is where we have taken vacant City-owned buildings and rehab them into one to four-family homes for owners who will be owner-occupants. The program features the five percent down payment, closing cost assistance, some homeowner counseling when necessary, and reduced real estate taxes. The prices of the homes range from the low 100s to the low 200,000. And in Brooklyn, again, since 1994, there have been over 400 units of housing created through this program in various areas of Brooklyn.
Another HPD initiative that you may have heard of is our Home Works Initiative which, again, we would select developers to rehab small City-owned buildings, I guess what we would have commonly referred to as the brownstone, and there's been a lot of attention paid to the brownstone market I think in Harlem, you probably read a lot of articles, and HPD has been very involved in that, but we've also been very involved in the market in Brooklyn and there have been over 95 brownstones rehabed through the Home Works Program.
Another program where HPD has focused primarily in Brooklyn is a Store Works Program. Home Works, Store Works, we have to name everything we do, and with Store Works we work with NHS, Neighborhood Housing Services, and rehabed mixed-use buildings, so specifically a small building that has a storefront at the bottom and there are no income limits for the buyers in that program. But the City is able to give subsidy when warranted, we have a tax exemption for 20 years, and in Brooklyn there have been over 26 buildings rehabed and sold through that program.
One of our new initiatives that we're very excited about, again, for this year it's vacant building -- we're calling it Vacant Building 2000, some of you may be familiar with the former Vacant Building Program that HPD had. This program differs, number one, in that we're not offering any subsidy to developers that apply for buildings through this program. This month we hope to issue an RFP with a number of sites in Brooklyn as well as other areas of this City. The developer has the option of turning the building into a rental property or a condo or co-op, something with home ownership units. Once we sell the building to the developer and get the conditions that it will indeed turn into housing, the developer would be free to set the rate at any market rate that they can get in the building.
Also, I'm sure there's been a great deal of publicity over HPD's Supportive Housing Division. In Brooklyn there have been a number of very prominent projects, particularly on Atlantic Avenue. The supportive housing unit obviously formerly or our homeless individuals as well as people with AIDS and people suffering with mental illness and I expect that we will have more supportive housing projects in our pipeline with the additional funds that the City and State have put in for persons with mental illnesses. In Brooklyn alone there have been close to 300 units of supportive housing built just since 1994.
One of the flagship programs of the Giuliani administration is our anchor program, and outside, we're at the registration desk, you will see brochures if any of you are interested in picking them up. And in Brooklyn we had our flagship anchor project which is located at the corner of Fulton and Ralph Streets. There is a Rite Aide pharmacy, a restaurant that's operated by a local entrepreneur, Mr. Robert Simmons, and a few other stores in that area. Across the street from there there are Partnership new homes that have been built in some empty lots that had existed there. And we're really quite excited about the Brooklyn location in Bedford Stuyvesant because it was the first anchor project to be completed and the idea of the anchor is that you combine the residential with the commercial services that a community needs. And there are other sites located in Brooklyn as well as other areas of the City. If you pick this up, that will give a comprehensive picture of our anchor program.
I wanted to talk a little more I think a number of you might be familiar with some of our, we call them our DAMP Program that really concerns City-owned buildings and transferring City-owned buildings to local or to the private sector and we do that in a variety of ways through our NEP program, properties are transferred occupied which (inaudible) which properties are transferred to neighborhood entrepreneurs and that's a program we work on with the New York City Housing Partnerships, some of you may have participated in that through our neighborhood redevelopment program, we work with a number of community organizations as we do with our Neighborhood Homes Program where we actually transfer ownership to the community groups who then run the buildings, maintain the buildings as rental properties or through neighborhood homes where they ultimately sell them to another in-purchaser.
We're really excited about those programs particularly with NEP which won a very prestigious award from Harvard University and the Ford Foundation which they were the recipient of the 1999 Foundation in Government Award. I think 3,600 applications across the country, we were one of the ten winners. So we're all very proud of that.
And lastly, again, to just touch our antiabandonment effort. Right now we are really focused in a number of Brooklyn community districts, 1, 2, 3, 4, 5, 7, 8, 16 and 17, where we plan to commence in rem tax foreclosure actions on properties there and then transfer those properties to responsible owners. We plan to issue an RQ or actually we've issued an RQ in April and I think the responses are due in July for developers or housing managers that are interested in managing these properties, and we will take them from the bad guys and try to give them to good guys that would qualify into the RFQ. And, again, the end result in that is to try to create a better housing market in Brooklyn as well as in the rest of the City.
With that I think I will leave you. Again, if anyone would like handouts of the wonderful power point presentation I had planned for you, please feel free to contact my office and I thank all of you for your patience. And Henry, thank you so much for having me.
MR. WOLLMAN
MR. WOLLMAN: We would like to go the Deputy Commissioner one better and to say that we will put the presentation on the Newman Institute website at the beginning of next week. Give us four days to try to get our tech life together here and I'm sure that you will all find that interesting. Of course, all of you want to know what the address is. Well, you have come to the wrong person, but if you call the Institute's office and I can tell you the phone number of that and it's on your program, we will be able to direct you to the exact address of the Institute's website which describes many of the Institute's programs.
I'd like to take this moment to talk about one, while the Deputy Commissioner's words are still reverberating, the Institute runs a certificate program in real estate in addition to the B.S. and B.B.A. in real estate which are run by Baruch College. The purpose of the certification programs in real estate are to give people in industry and now in government and in community organizations a chance to acquire at least some of the operating skills in real estate that individuals or community organizations may want as part of their own work. We're very grateful in terms of the development of the program for New York City and New York State government employees, to Barbara Udell who is in the office who is the special advisor to Commissioner Roberts at HPD, and that program is underway right now and, again, on the Institute's website where by calling the office, for those few of you like me who may not have websites around, you can find out more about it and get a complete brochure about the certificate program in real estate for government and not-for-profit organizations in addition to the one for industry for those of you in the private sector from the Institute itself.
I'd now like to ask the panelists for sort of the core of our morning, if they would take their seats up at the table right here. I'd like to welcome the first segment of this, Jan Rosenberg, Errol Louis, Marilyn Gelber and Jed Marcus.
The third section of the morning is always devoted to, in effect, a group of case studies; one involving a current project, ideally; the other one involving a perspective project that illustrates some of the things that are going on. Some of the things that are going on that are illustrative of what we've been talking about so far. This morning we've divided it into two halves. First, a group of individuals talking about the future of Fort Greene, people who both live and have knowledge of exactly what is going on in this rapidly changing and sort of archetypal neighborhood in Brooklyn in terms of community change in Brooklyn. And then for the second half of the next hour, beginning at roughly about 25 of 11, we'll welcome Robert Kaplan and Joshua Muss to talk about the Muss Development Company's extraordinarily exciting market housing project in Brighton Beach.
It gives me pleasure to introduce, as part of the first panel, Jan Rosenberg, Professor of Sociology at Long Island University's Brooklyn campus. Her research has involved a range of urban issues, including jobs, welfare and economic development. Dr. Rosenberg co-edited the last two editions of the Urban Society Reader. If we were in a little more looser and less sexist worry framework, I would also introduce her as the wife of a dear friend of mine, Professor Fred Siegel.
Thank you for welcoming Jan Rosenberg.
MS. ROSENBERG
MS. ROSENBERG: Thanks. Let me just get my technical support here.
Fort Greene's reputation grows by the day, I'm sure you know that, thanks in large part to the economic boom and Manhattan's real estate crises. But Fort Greene isn't just another brownstone Brooklyn neighborhood, which it has become, interestingly, even more over the last five years or so, with significantly lower prices than Park Slope, Cobble Hill and Brooklyn Heights. So it's certainly that. It's not just a neighborhood with a great location, one subway stop from lower Manhattan, with beautiful well-preserved 19th century architecture, with brownstones and brick houses mostly completed by about 1870, with good transportation, still a lot of street parking, and even a lot of parking lots, that's another story, and a beautiful Olmstead and Parke's Park in its midst. Small, really a neighborhood park. But that neighborhood park demarcates the social geography of Fort Greene and Clinton Hill in some ways, but particularly of Fort Greene.
On the north and stretching north from Myrtle Avenue are now what are three public housing projects. Two of them, Ingersoll and Whitman, are low-rise mostly six-story buildings with lots of open space, grass, trees, playgrounds in between. And then further toward the Brooklyn Navy Yard, which is really what these public housing projects were built for, workers in the Navy Yard, are the taller high-rise Farragut buildings. So Fort Greene has a complex kind of social geography and a range of inhabitants in terms of income levels that speak to the kind of range of incomes in Brooklyn and development issues that have come up already today, not surprising. But Fort Greene, the south end of Fort Greene, the brownstone end is distinctive and perhaps unique in the country. It's a predominantly black stably integrated neighborhood in which a white minority, about 15 to 20 percent of the inhabitants, have remained or moved in, more are moving in now, for more than three decades. It's a neighborhood that's become known as the place to be for lots of young people and particularly for a black artistically and upper middle class and middle middle class and for others who want or are willing to live in a neighborhood with a distinctive hip Afrocentric cultural tone and there are people here today, merchants and residents, who know and represent that tone. But even this leaves out an essential part of what's driving or defining the changes currently in Fort Greene and that's the major cultural, and to a lesser degree, educational institutions. In terms of educational institutions, I really mean Pratt, which brings lots of new students, many of whom stay, who are artists, designers, architects, planners and so on, who give a certain tone to the neighborhood, but clearly the Brooklyn Academy of Music is a major cultural institution that, and its various initiatives, the Rose Cinema, the Majestic, now Hardy Theater, 651 Art, which is devoted to arts of the African Diaspora all of these institutions have created a cultural center of gravity in Brooklyn's Fort Greene.
A great deal of excitement has been generated by the movement of dot coms across the river and maybe less noticed, though perhaps not here, but extremely important is the movement of cultural institutions and artists across the river as well. Currently as artists and art institutions are being priced out of Manhattan, Fort Greene's cultural district seems to grow by the day and there have been so many articles in the New York Times and the Daily News just in the last year that, I'm sure you're all aware of this, that it's happening in cities around the country, Cleveland, San Jose, Newark, culture is seen increasingly as an economic engine, not just a pretty afterthought.
One important part of this I want to come back to are the hip stores. Let me see if I can show you a few sites, architectural and shopping sites in Fort Greene. There's a beautiful little nook. These photos were just taken last week in full bloom right off Fulton Street, a commercial street, a back yard patio across the street from a little cafe called the Cafe Lafayette. A redone carriage house right off DeKalb Avenue. Here's an interesting photo on St. Felix, a house on a block where those of you who went on the house tour yesterday found yourselves at a house that's been lived in for decades, next door to a house that is thankfully now, according to its neighbor and I'm sure many neighbors, boarded up and fenced in so people can't squat there, rob him, rob other people, sell what they rob on the streets and so forth. I don't know the full story of this. I know the neighbor's story. He's been fighting, fought for a long time, was able to clear some houses of prostitution across the street, though pay the price for that found himself unconscious, this is over a decade ago, on his stoop, and then fought to try to get this building torn down. He's been in a long fight with landmarks, maybe some of you here could tell us why that is and why a house that is so deteriorated remains in this shape in a neighborhood today.
Hip stores of all kinds, here's one, Mashoud (phonetic), you might have heard about it, it's gotten a lot of press, an African design store. Hip stores of all kinds, but mainly centering around design, from fashion to crafts to art to home design. And then restaurants buttress this arts milieu. It's not just theaters, it's not just performance spaces, it's all these supporting stores and institutions that are really important. This part of the street has a name, it's the Bogolan District, a word of the Amali (phonetic) language and it calls itself the other side of Fulton Street. Those of you who have been to the Fulton Mall will see this looks very different. Here's Cafe Lafayette, it should have been across from that blooming dogwood. A Cambodian restaurant. Well, when I described it as Afrocentric, and I'm sure others here will have something to say about that, it's very cosmopolitan. A new juice bar next to a well-known neighborhood music blues venue. This gives you a little sense of the architecture, the design store, more shops, some, I'm sorry we don't have 4W Circle here, a wonderful craft store. Selma Jackson here who could speak to this also who's been a leading spokesperson for small merchants in the area who have given the neighborhood a distinctive kind of feel. Here's one of the restaurants, Madeba (phonetic), South African, you might have read about it, it was reviewed a number of times. Skipping to Myrtle Avenue, ignore that for the moment. The restaurants were still on the south end of Fort Greene, the brownstone end. The restaurants add to the surprising variety that's already there. I won't read the long lists of names of the kinds of cuisines, you've got some sense of that. They really buttress these cultural institutions, people like to go out to eat before they go to the movies and eat after they go to the movies, before rehearsal, before a performance, et cetera.
Another indication of the sort of advancing change movement, dare I say gentrification, (inaudible) people moving in, more whites moving in, to what is still predominantly a black area, is indicated by the recent purchase by the Corporate Realty Group of a building in the heart of the south end of Fort Greene where all those stores were, that they're completing renovating and plan to move into by the end of the summer. Fort Greene is making a big push in Fort Greene, Clinton Hill, Bedford-Stuyvesant, into Brooklyn neighborhoods, particularly Bedford-Stuyvesant, that haven't yet seen this kind of real estate interest at that level, though it too has many beautiful homes, many beautiful brownstones and so on. I'm sure many of you know that.
Gentrification has been limited in the past, this is one of the points I want to make, I started by saying this is a complex neighborhood with affluent and a low income end. Gentrification has been limited in the past I think partly by that split, by the presence of three large housing projects, and by high crime rates in New York more generally and in Fort Greene. I think the citywide drop in crime and this boom has given greater impetus to gentrification. It doesn't mean resentments have been eliminated. Yesterday's New York Times article in the City section about gentrification blues, while it got a lot of facts wrong, expressed fears and resentments that are widely felt among neighborhood renters, whether they're residential renters or commercial renters, about prices skyrocketing. Many middle middle class African-Americans in the Clinton Hill Area, 30-somethings who are happy about the new restaurants and shops, are worried about losing their housing, they wonder what it means that they see a lot more whites or whites at all at their subway stations and in the stores closer to their own homes.
Let me come back to the north end of Fort Greene to the public housing end and show you a little bit of Myrtle Avenue. Here you can see the barbershop that's been on Myrtle right near Flatbush, right across the street. At the end there is the MetroTech complex that it steps towards Brooklyn Heights, and if you can see the glass and wood front, there is a beautiful new, very inviting spa, they call it, I thought it was a beauty shop, but they corrected me, it just shows my age I'm sure, a spa that's clearly expecting something to happen on this end of Myrtle that has been, until now, for the last 15 years, very deteriorated.
Let me go back to my point about resentments and gentrification. There are these I think fears, there are persistent rumors and as far as I know, which may not be as far as it goes, for the 20 years that I've worked at Long Island University, which is really right on the edge right near the Myrtle Avenue low-income housing project end of Fort Greene, for the 20 years I've been there, and especially since MetroTech has been built, rumors have surfaced regularly and periodically that everyone in the housing projects is going to be evicted and those buildings are going to be co-oped and that's the end of it. Those rumors are ripe and in the open again today. Only yesterday on the housing tour one of the homeowners in a beautiful brownstone at the other end said he knew that for a fact and he'd seen the documents, but he couldn't share those with me and he didn't know anyone who as yet had been evicted. I'm not saying it hasn't happened or it isn't happening, but I haven't been able ever to pin down any fact to that. But it is a persistent rumor, that's important.
As we know, reputation, perception is very important in what happens in neighborhoods. This is a neighborhood in this economy where a lot of people in the low income and especially given how welfare reform has unfolded so far I think where people could be brought into the economy where their street could be developed, finally. Myrtle Avenue, that's had suspicious fires and holes in the ground and debris circulating for decades. So we have an opportunity now to make this integrated neighborhood, majority black integrated neighborhood, more whole to bring people in to the development and not pose the development, I think, as the threat it's been. So I hope that the building that's going on where those holes have been on Myrtle Avenue are going to provide some stores that help revitalize that street and bring something to the low income public housing residents that makes this move, this growth in the New York economy, something that revitalizes their neighborhood as well.
I just want to end with a very quick anecdote. I was walking with a friend through the brownstone streets in Fort Greene and he looked around and he said this neighborhood is more like Manhattan than Manhattan these days. He didn't see the big box stores in Atlantic Center, that's another story for another day, but he saw the diversity in terms of race, in terms of social class, and the shiek, hip stores that are cropping up everywhere. It's an exciting time for Fort Greene.
Thanks.
MR. WOLLMAN
MR. WOLLMAN: I'd like to now welcome Errol T. Louis, Executive Director of the Bogolan Merchants Associations, a neighborhood improvement organization in Fort Greene. Mr. Louis is also Visiting Assistant Professor of sociology at Pratt Institute and works as a consultant on community development projects that benefit low income neighborhoods. His current plans include the Brooklyn Chamber of Commerce, the New York Times and the National Federation of Community Development Credit Union.
Please welcome Errol Louis.
MR. LOUIS
MR. LOUIS: Good morning. I was expecting to use overheads and then at the last minute I had the brilliant inspiration that I would use my power point presentation. You'll have to see it on the web rather than here today, but that's okay.
The previous speaker, Professor Rosenberg, I think has really sort of set the stage for a lot of what I want to say and I think we actually did coordinate a little bit by speaking ahead of time. First of all, I want clarify something that's always asked. Bogolan, the name of our association, it doesn't stand for anything, it's not an acronym. It's short for Bogolan Feeni (phonetic) which means mud cloth and I actually went to one of our merchants, Selma Jackson's store, 4W Circle, and I purchased something that employs mud cloth so you can see what it is. I'll hold it up and then I'll sort of pass it around. I need it back. The material is a speciality fabric that a lot of designers in the neighborhood like to use. It's used in West Africa and it's used with mud that's cured at the bottom of an African pond for over a year. There's just has a real craft to it and many of the designers like to use it. When the association was formed in 1995 they decided to take that as the name. So that's where it comes from.
Our association has over 70 dues paying members, we are in the middle of a membership drive, so that may change, hopefully upward, and it's a self-organized group. It's one of the things that I think is extraordinary about our association is that it's not a business improvement district, it was the project of a local nonprofit of any sort, it was really just merchants coming together and banning together and it was for one of the reasons that Jan alluded to which is that Fort Greene-Clinton Hill, this is contested space at this point. There are a lot of different and in many cases competing visions. You would not look at Columbus Circle and say, well, Coliseum is on one side and Trump's over here and there's these rich people over here, and they all just sort of get together and craft a common vision. We know that that's not how things are done in New York and Fort Greene is no exception. There are very different visions of the commercial future and the residential future of the neighborhood and the merchants got together not just for the usual sort of common promotion, sanitation services, safety, lighting and other kind of basic concerns that storefront owners tend to have, but also in order to introduce in a more sharply focused and coherent unified way, what really has been an important part of the growth and development and the attraction of this neighborhood which is that it is a cultural district that is very diverse, but with an Africana or African Diaspora sort of flavor. African is a term that's sort of come out of Harvard where they're kicking it around where it really refers to the Diaspora and certainly our association is an example of that. You can, within a five-minute walk, eat at a Senegalese restaurant, a Nigerian restaurant, a Jamaican or Caribbean restaurant, a soul food restaurant, Madeba, which was actually pictured as the South African restaurant in New York City, Cambodian cuisine, which is also one of Jan's photos, is the only Cambodian restaurant in New York City. So this is sort of extraordinary and if you want to compare it in some ways I guess to say a Little Italy or a Chinatown, not every last shop and restaurant is Italian in Chinatown, increasingly it's shrinking in fact, nor in Chinatown and I'd say it's certainly the same is true, that there's a strong African flavor, but, again, Cambodian restaurant and many other things. It's been sort of a mini French invasion, a couple of French restaurants have opened in the last few months. So we're trying to keep it going, we're trying to sort of pull it together and make it happen a little bit better. Again, the merchants themselves took the first step and still are a very proactive group, in part because the majority, certainly of our members, and I would daresay of the merchants in the area, are, in fact, community residents as well. Not necessarily Fort Greene-Clinton Hill, but maybe Prospect Heights, maybe Bedford-Stuyvesant, but they care about the neighborhood and it's far from unusual for our meetings to also discuss education and other kinds of services in the area. And I think that's sort of an important core of stability that we also want to preserve.
Of our members, I would say probably about a dozen, maybe slightly less, actually own their property. So to the extent that there is gentrification, it's also a concern for our members, meaning they're wondering if the commercial rents are going to up and, if so, how much, and in many cases there are places where the increase can eat the profit margin and make them have to relocate. And so we're trying to sort of deal with that in the right way. Several of the more successful ones, in fact, have purchased property recently and that has been a blessing as well. So we're working on that.
In addition to the core services, and I think everybody understands what the challenge of those would be, the police, the fire, the sanitation and so forth. Our precinct, by the way, the 88th Precinct in Fort Greene actually showed the largest increase in crime in the last year of any precinct in the City. Now, that factor or quasi fact, is a little bit clouded by the fact that the command was kicked out because it turned out he had been fudging the numbers of the previous years. So we're not really sure what's happening, but the reality is that's not good enough, saying we don't know, but we think it might be the highest in the City is just not acceptable. So that is sort of a lingering concern.
The other sort of concern though is what I was saying before about sort of contested visions and different notions. The photos that Jan wasn't able to talk about of the Atlantic Center, that's a very different kind of development and a very different commercial vision for Fort Greene and it doesn't necessarily have to be in conflict, but at times it might be. The notion of big buck stores, an Old Navy or a Caldor's, which is now gone, or a Just For Feet, which now gone, just a couple of years into the project, these have gone away, they're very different. The mall itself is fundamentally different from the area that we're talking about. The area we're dealing with is the main corridor is Fulton Street, but we also have members on DeKalb Avenue and Myrtle. We generally are talking about from Flatbush out to about Carlton and from Myrtle Avenue to Hansen Place. And what's going on in Atlantic Center, it's everything that Fort Greene is not. It is not diversity of uses, it's just business. If you're not going to shop, you have no business over there. It shuts down at night with the exception of the 24-hour Pathmark and it's dark and it's sort of dangerous and it's not very pleasant after hours. Now, one block over you get an entirely different commercial vision which is sort of mixed-use residential upstairs, commercial downstairs, it's where people live, it's where people care about. It's a pedestrian sort of place, you don't bring a car down Fulton Street because while there is parking, it's kind of hard to find because there are no meters there yet. And so we're sort of seeing -- we start to nudge a little bit. Sometimes we bump heads a little bit. At one point there was a proposal floated the MetroTech bid to expand across Flatbush Avenue and into our area. And we began to talk with them and it didn't seem like what they had in mind was what we had in mind. There's been a little bit of that. There's also been a little bit of that, frankly, when you talk about cultural district. This is in some rather small newspapers, it's in City Limits currently, so I'm not saying anything out of school, but when someone says this is going to be the BAM cultural district and our group says this is and has been an African arts cultural district for 50 years, there can be a whose culture and on what terms do we cooperate or how do we straighten all of this stuff out.
Just to mention some of the sizzle and flash that will be of interest to you is that there are big stars that are living there. For you jazz lovers, that Betty Carter was a long-time resident, the late Betty Carter. And the late Lester Bowie also a long-time resident. Our district superintendent for the local school board is Lester Young, Jr., son of the saxophonist. I mean, it seeps in. It's deep in the neighborhood. Some of the younger people, Spike Lee really sort of kicked off a whole wave of performance and visual and film young people wanted to be in the neighborhood, would come for an internship and maybe stay. And certainly Rosie Perez was a local resident. Comedian Chris Rock who was a resident. The singer Erica Badoo (phonetic) was a resident. They tend to sort of really keep things happening because you will see them come in to a poetry reading, you will see them come into a shop, you will sort of -- they are, in fact, part of the neighborhood and that's part of what also makes it a special place.
In my last two minutes I want to say the future of the place and the waves of gentrification are very, very real. I mean, I hear about this because we have real estate brokers who are members of our association and we talk sometimes about what's been going to what and some of it is just astounding. A couple of true stories, one is of a one room co-op and that was normally as gentrification or enhancement of the neighborhood and its attraction has increased, your first foot in the door would be to get a one bedroom or something like that. One that was selling in a rather large building for $65,000 a little over a year ago, an identical unit just sold for 175. And so I can no longer say to young people, look, you know, come up with five or 10,000, get some from your parents and get you paperwork in order, your credit rating, and see if you can get yourself a one unit. That's not necessarily as easy as it used to be.
Second story is of someone who is middle-aged and moved here from out of state and bought with retirement and inheritance money a brownstone for close to $600,000. And that was last year, less than a year actually, and just recently got an appraisal for 750. So the price and the pace, and I guess (inaudible) will sort of seal the deal when they arrive on Lafayette there, it's really making things happen very quickly. There is a concern among the commercial and also the residential because we don't want to see the whole thing sort of change quickly.
And I guess finally, to the extent that merchants, as well as many of us who care and are concerned about the neighborhood, want to see it managed in a responsible way. There's some precedent for things not happening the way they should. I mean, I think part of the rumors that sweep through the housing developments, and there's 15,000 people living back there in 10,000 units, by the way. Some of it comes from the fact that, you know, I do walking tours in the area and I was looking through some of the historical materials and found that when they were doing the landmark designations, there was a question about do we include the housing projects or not. And there was an argument to do it. There's some interesting stuff in there. There's this round day care center. This was the first State built public housing in the country. There was some rationale for it, but it didn't happen and to the extent that we move forward as a community altogether, I think we're going continue to have these kinds of questions and I hope you'll be there to help us answer them.
Thank you.
MR. WOLLMAN
MR. WOLLMAN: I'd like to now introduce Marilyn Gelber, Executive Director of the Independence Community Foundation of the Independence Community Bank, the largest non-Manhattan based Foundation in New York City. The Foundation focuses on neighborhood renewal and community development. Ms. Gelber has previously served as Commissioner of the New York City Department of Environmental Protection, Executive Assistant and Chief of Staff to the Borough President of Brooklyn and Director of Neighborhood Strategy Planning for the New York City Department of City Planning. She currently serves on the board of the Regional Plan Association.
Please welcome Marilyn Gelber.
MR. GELBER
MS. GELBER: Thank you, Henry.
This is an entirely low tech presentation. Don't rely on anything else other than myself.
As Henry says, I'm Director of the Independence Community Foundation and the Foundation was created about two and a half years ago by Independence Bank and I think that the reason I was asked to be here this morning and speak with you is to share some of the experiences that I've had over the last two and a half years working both with non-for-profit local organizations, working with banks, working with other foundations and talking to investors, because much of what you've heard about Fort Greene is also happening in other communities in Brooklyn and the overall theme here on how we can strengthen Brooklyn's relationship with regional economy is critical.
I want to link my remarks this morning also a little bit to sum up what Janette Gadson talked about because I think it's critically important and some of what Ed Regowski talked about. Amonth the organizations or initiatives Independence has partnered with over the last couple of years has been a revitalization effort for Myrtle Avenue, which is a spine that runs down from around Pratt, well actually beyond Pratt and Bed-Stuy down to Downtown Brooklyn. We've also been working with the BAM Local Development Corporation and you heard alluded to before some of the issues, some of the tensions, about trying to create a local development corporation whose theme is art, culture and education in the area around BAM. I mean, it's somewhat ironic that BAM, which is the oldest performing art center in this country, sits on the edge of two urban renewal areas, Downtown Brooklyn and Atlantic Center. And when people talked about urban renewal, pretty much all we talked about was commercial development, housing development, talked about office development, never really looking at our cultural institution, the strong cultural institution, as being the anchor for urban renewal development in the area and I think it's a very positive change that now -- the neighborhood strengths which is its housing, its people, its culture, its art, are now being looked at as the anchor for new urban renewal initiatives.
We're also working with Pratt Institute. Again, you heard about Pratt students, Pratt faculty, have an impact on the character of Fort Greene and the commercial areas around Fort Greene. We are working with Pratt as we are with the LDC for BAM to try to create a community focus plan. It's interesting when you run a foundation, institutions come and they ask you for money to help their institution and the position we've taken is, yes, we will help your institution, but we will help your institution as it plays a stronger role in the community. It's up to you as an anchor in the community to reach out to your neighborhs and build a kind of good, collaborative partnership. And so we're encouraging Pratt to do the same as it has the BAM and LDC.
Early on we also started working with a wonderful group of people from Fort Greene Restoration Group, people who want to restore the park at Fort Greene, extraordinary historic park that has gotten far too little attention from decision makers in the City, not from the Borough, but the broader city. At the same time we're also working with Pratt Area Community Council, a major housing not-for-profit group that's now trying to redevelop blighted properties, both residential and commercial, along the Fulton Street spine. Again, you've seen some of the new strength on Fulton Street, but there's a part of Fulton Street that is not at all strong and Pratt Area Community Council is working there.
Again, our work with Pratt Area Community Council has indicated another one of the issues that we face. You heard earlier from HPD about a series of programs and initiatives they have working with property debts in the City portfolio. Well, what we're finding more and more on neighborhood redevelopment efforts is that there is no longer property in the City portfolio. There continues to be blighted properties, but it's not necessarily municipally owned. And so organizations like Pratt Area Community Council now need to find new tools working with the private sector to do the kind of broad based comprehensive neighborhood redevelopment that's called for.
One of the other, and this will be the last one, one of the other initiatives, since being at Independence, that worked --
(END OF TAPE ONE.)
(BEGINNING OF TAPE TWO.)
MR. MARCUS
MR. MARCUS: -- The whole conference because it's a very interesting and somewhat complex neighborhood. It has the best mass transit of any neighborhood in the City because all of the subway lines coalesce at Atlantic Terminal and DeKalb Avenue. Its architecture is rich, both its brownstone residential architecture and also its wonderful institutional architecture, particularly the churches. You march up every couple of blocks there's not just a church, but a cathedral up Lafayette Avenue, one of the spines of Fort Greene.
It's rich in open space. People have mentioned the park designed by Olmstead and (inaudible), Fort Greene Park, which is a little gem, and the neighborhood also benefits from many little playgrounds.
There are institutions which are very important in the life of Fort Greene. The churches play an institutional role, obviously, as well. BAM has been mentioned and Pratt has been mentioned, each of them contributing their own flavor to this. But most important of all Fort Greene is a place where it's a stable, integrated community. While there has been a lot of mention of tensions, which are part true, and it's been present in Fort Greene throughout the time I have been there. Nonetheless, it's a community where people are fairly relaxed in interacting in a lot of different contexts. It's the community in which multiracial or mixed couples feel most comfortable than anywhere in the City and there's a very high percentage of mixed racial couples in Fort Greene.
It is also a community which attracts many artists and mention has been made of the prominent black artists who live in Fort Greene and have lived in Fort Greene. It has also attracted many artists of other racial groups. I go to a little music class with my little daughter and there are other people in the audience who attend the same class and the discussion is sort of among people, the musicians in the class, who's playing where, who's going to be -- who can be heard where, not just in general, that weekend, that night, you can go on Saturday. And there are the visual artists who talk about who's showing where and stuff. And that's very much the type of people who live in Fort Greene now.
The final issue is that it's a neighborhood which has for years been undergoing gentrification or at least 30 thirty undergoing gentrification. And it's one of the few black neighborhoods in the City that's undergoing gentrification. Most of the gentrification issues are taking place in places like Park Slope or the lower east side, but it's one of the few places where you have gentrification within a black neighborhood.
Many people ask what was Fort Greene, you know, when I first moved there, which was quite a while ago. Let me just draw you a quick picture. At that time in the early '70s I worked in the Welfare Department. I guess we can't say Welfare Department. And a friend who I was close to lived in Harlem and I would describe to her my regular encounters in Fort Greene and she said you people are so backward in Fort Greene and it's so country compared to Harlem. But it was a very rich experience at that point. I mean, just little things, like you would walk into the store on the corner and the person next to you would as for a Marlboro and put down a nickel and that meant they were buying one Marlboro and not a pack. And there was a whole pack of open cigarettes. You'd walk out of the subway and the subway which is probably the central subway station in Fort Greene for all the many subway stations, the Lafayette Avenue station on what was then the A Line is now the C Line, has long tunnels going under Greene Avenue and when you'd come out there would be people singing doo-wop in the tunnels because of the residents of the tunnels. The street life was complex. Because it was a poor neighborhood, people were out all the time. The stoops were occupied by everybody who lived in that house. You basically lived on the stoop in the evenings and music was ubiquitous. People would listen to music or else they -- which they would pipe out from their houses or they made music on the stoops. When you walk down the street all of your neighbors were on the stoop. And the current richer environment where people have air-conditioning and where there are fewer people per building, nobody is on the streets in the evenings. So it's an interesting contrast to what the neighborhood used to be. The threads in this whole (inaudible) to ours today are also very interesting and very strong. I mentioned the churches, the churches endure and they are very powerful and they're sources of culture, they're sources of social engagement and increasingly they're sources of integration. You can see a gospel choir now that's somewhat integrated. That wasn't the case 20 or 30 years ago.
There are pockets of white families who predate the integration of African-American families which started in the '50s. There are pockets of white families who still endure, who live in the neighborhood going back even to the early parts of this century. My house, which is a brownstone, has had four owners since it was built in 1874. So there's a lot of continuity and a lot of architecture that has been preserved because of that. An interesting example of continuity is the Fort Greene Landmarks Association which is a wonderful combination of some of the almost regal black families who have provided cultural stability within the neighborhood and eccentric white hippies who in the early '70s and have kind of grown hair in different weird places. It's a very interesting organization to see how it's endured, how it's changed and how it's continued to support the neighborhood.
Fort Greene today is increasingly influenced by regional forces. With our regional presences, you have Atlantic Terminal, which was mentioned, and on the one hand it's very different, as Errol said, from the context, but it has given the community a certain degree of credibility you have Pathmark as a -- in some ways it's annoying, but in other ways it's wonderful to have a 24-hour Pathmark. BAM, of course, has been a continuous thread and continually introduces a life to the community which is regional and even international. The developments along Fulton Street are fabulous. It's almost understating it to say it's Afrocentric because what it has done, at least from my perspective, is it has brought an amazing level of artistic achievement from African groups and made it accessible, available to me and other people in the neighborhood and really it hasn't quite yet become a regional resource, but it really should be because the quality of the stuff is not what I would say craft, it's really art, and there's a lot of splendid things that are in display in the stores along Fulton Street that are achievements that rival any in the City in terms of the quality of artistic expression.
I guess the final thing is the issues. Fort Greene has been very successful as a community. It's been very successful by and large without government. The government influence is nipped around the edges, but what challenges Fort Greene now, and it has been mentioned in the past, is number one, the housing crises. Housing costs have accelerated very rapidly and that influences, most of all, our renters and many of the renters are the very artistic couples and families that I mentioned before. A typical Fort Greene family today might be two artists, one of whom is also a teacher and one of whom might also be working in construction or a typical family might be someone like me, my wife is a writer and I'm a lawyer. There are a lot of artistic people in the community and their ability to rent is being crushed by the current real estate market.
Number two, the other major issue for the health of the community is schools and it's a ubiquitious New York problem. Most of the people who want an alternative to the Fort Greene schools can find one, but it's hard, you have to sort of bob and weave and move through the system and the schools are challenging in Fort Greene.
And then the final issue as has been mentioned, is crime and crime is much less pervasive throughout the City and in Fort Greene and it has been, but, on the other hand, I think it's reached a point where it's very hard to see how it would change because I think crime is very connected to the place where underemployable black men have been placed by our current society and it's very hard for these people to become employable because of the criminalization of (inaudible).
So I think those are the issues. Time is up. Thank you very much.
MR. WOLLMAN
MR. WOLLMAN: I'd like now to turn to really a very exciting portion of this morning where we're going to be looking at a future present real market focus housing development process. I'd like to change the order slightly and introduce first Joshua Muss, the president of Muss Development Corporation. Joshua Muss, head of Muss Development, specializes in the boroughs outside of Manhattan. To say that is to say that he sits on the board of the Newman Institute and comes to the work of the board of the Institute and the work of his own development company with a unique perspective on the potential of the City as a whole. Muss Development has built many residential units throughout the 20th century. The company recently completed two communities comprising 1,500 town homes on Staten Island, retail centers in Forest Hills, Jackson Heights and Staten Island, and a 1.5 million square foot mixed-use hotel office building and garage in Downtown Brooklyn.
Please welcome Joshua Muss.
MR. MUSS
MR. MUSS: Before the weekend I prepared a presentation and this morning I prepared a new presentation before I came here. During the presentation I prepared a new presentation. Now I'm not sure I've had time to say anything.
To put the morning into some perspective, and I was given a note by my son, be positive, is that, unfortunately, there's not much to talk about in housing in Brooklyn. There are a lot of affordable and Partnership housing projects going up, and these are heroic, but they are a tiny, little bit of what's necessary to build. And I'm sure Henry, and by the way he does a heroic job himself in volunteering to try to address issues within the City, looked far and near and found that there weren't too many market rate projects going on in Brooklyn and I confess we're not market rate anymore. It's good news, but it's bad news. It's good news in that Oceana has proven that there is an extraordinary need for housing in Brooklyn. There's an extraordinary need on every level. Oceana addresses the local, ethnic needs, which everybody knows is prevalent in every single community in Brooklyn and every single community in Brooklyn has its various income stratas and to preserve the neighborhoods in Brooklyn it's important that there be a variety of housing presented in each neighborhood, not just to focus in that here's where luxury belongs and here's where middle income belongs, and leave all the low income there, it doesn't and it's not appropriate for working in Brooklyn.
The second need that Oceana is proving and, believe me, we're just starting to understand our markets, the second need that Oceana is proving is that there's an extraordinary amount of need for families. We knew it, we understood it, and what we did is we focused on apartments that would be large enough for families. Our general size, our average size is 1,250 square feet, which is generally large enough for three bedrooms and, indeed, almost every single one of our units qualifies as a three-bedroom, although one of the bedrooms is disguised as a dining area or den for the purpose of creating comfortable living. And that's the real need for Brooklyn, in fact, of all New York City, because when a family reaches a point where they have a child or two and they want to stay in the neighborhood where they were raised, or they want to move into an area which is commute friendly, which the boroughs are, there's no place to find any new housing at all. And what these people are doing is they're moving far away, not to the near suburbs, they're moving to the far suburbs and they're going to become competition to New York City because they can't get back to work and the labor market is suffering, and that's one of the reasons why all of a sudden the aspect of middle income housing is being recognized. It wasn't even talked about two years ago, but the emergency was there.
The third market, which is also very interesting and helps the second market along, is that there is a large amount of empty nesters who own houses, who own large apartments, who don't need their houses, who don't want their houses, who could sell their houses now and not recognize capital gain because of recent tax changes, who don't want to spend their time and effort and can't maybe afford to fix up their old houses or to keep them running, but they have no place to which to move. Where are they going to move to? There's no incentive, there's no location and they want to stay in Brooklyn. I think if there's anything that anybody can say of Brooklyn, everybody wants to stay. Now a lot of people want to come back, but there's no place to which to move.
Now, empty nester, Stanley's moved out, she has a large three or four-bedroom unit, Sheepshead Bay and Flatbush, all over the borough, can sell their houses for a lot of money. They have no place to go. They need a place to which to move. Once they have moved, now all of a sudden there is an available house for sale to somebody who needs it.
So let's take a quick look at Oceana and, as I said, it's not -- this is not a luxury development by any definition in New York City because in New York City luxury has come to mean $1,500 a square foot or a $1,000 a square foot and guess what, that's almost what it costs to build. But Oceana is more than middle income only because it's very hard for even middle income market rate to aspire to Oceana and our units are ranging now in the 200,000s and we're going up to 300, 400, 500 and of course a lot of this depends on where the units are located. We are selling some units for a million dollars, God bless us, let's tell you something, every day we keep our fingers crossed because we're dependent on the economy.
Let's just take a quick look at what Oceana is and I'll try to start this. I have my own technological problems. While we're trying to fix it, let me talk and I could talk without pictures, I promise you.
Oceana actually is a waterfront community and it was an in-fill community located in Brighton Beach and it is an unusual community because it is available land that some poor developer spent about 15 years trying to get it built and eventually had to turn it over, it's a coincidence, but that's only the fact is that it was a cousin of mine because he also grew up, unfortunately, to be a developer. And his attempt was to build four hi-rise units totalling about 1,600 square feet. When we came on the scene knowing a little bit about development, and it's been 35 years since I came into the business, but I guarantee I still know only a little bit, we thought it was a project that would be good to run into since we had finally finished a project in Staten Island that had taken us about 30 years to build. The project was divided into small units, in fact, I have a board here, so I don't even need the pictures, if I could put the board up and turn on the lights and we'll try to concentrate on the issues. And, by the way, Jeanette, who was brilliant in presenting the state of affairs for housing in New York City, and I would like her to address every single legislature in New York City, both as to philosophy of the content, showed slides of developments in Brooklyn and I hope you notice that almost each one of them was repeating something before it, I think it showed about three developments, but a lot of slides, but our development was in there, in fact, the slides were better than mine that I brought, so don't worry. And we are actually not a prospective development anymore, happily we have topped our first building, we are rapidly coming to the conclusion to topping of the second building, and have started the infrastructure and the slabs of the next two buildings. What we did is we took these four huge buildings and subdivided them into 15 or 16 buildings. Once we did that, we had to comply with a whole lot of issues that involved the zoning. Why did we put up four buildings? By the way, they would have been sensational, everybody would have had a view. The problem was, number one, is that they were unfinanceable. Not then, not today and probably not for another then years because the banking community is still reeling over the '80s and '90s and most of the banks of New York City are still not out there lending money.
The other reason is is that the units that had been developed were somewhat smaller than we felt were acceptable to a community. And to start redesigning it, there was no time, there was no -- well, it really didn't matter, we couldn't finance it. So once we went back to the City Planning Commission, we had to comply with a whole new set of zoning issues, mostly confined to the waterfront zoning. By the way, I don't have after slides, but try to remember this morning those taller buildings that were under construction. What we have in Brighton is a spectacular location and you can see it right there, it's this whole area in the middle which is dotted, I don't know if I should go forward or backwards. This first slide gives you a sense of where we are. We're on the ocean, we're at the subway, there's shopping, there are new buildings there, but most of this is a community that stopped still for about 50 years. And now it's getting revitalized. I know I'm running out of time and I've got to run quickly. So we were able to determine the need for smaller buildings, we ran into some serious, serious waterfront zoning issues, such as the issue of upland view corridors. Now, take a look at this picture, this thing right here, which is a little more illustrative, you see that streets coming in on the diagonal. Well, in the City the new waterfront zoning code requires a view corridor coming down every single upland street, unless it's blocked by a preexisting building. So, this street was blocked by the apartment houses here, this building was blocked by the Y. This building ran right through the middle and was blocked by what? There's a rest station, one story, right over here, the lifeguard station and just by luck, it blocked that view corridor and made the project possible. I want you to understand something, developers will come up and moan about political processes and will moan about delays and I have extreme political and philosophical force. The latter, there's no time to discuss. It was discussed by some of the previous and the former, I don't have the guts to talk about it in public, but I've got to tell you something, there was an instance where the City Planning Commission and the City Planning Commissioner understood the need for housing and this particular instance expedited the redevelopment of a development that otherwise could have taken a lot of time. The unfortunate thing about development in the boroughs is that if you have the money, you've got to develop in Manhattan, it's not sexy, and it's much quicker and it's much more rewarding. And if you don't have the money, you can't afford to develop in the boroughs because there's so much time and energy cost in order to get into the ground. And that's the most negative thing I could say today is that, yeah, we're a prospective development that's in the ground, the question is how many other prospective developments do you know about? And while we talk about this, I said the heroic efforts of HPD and the Partnership, they're taking it by dozens at a time, little chunks, but the City of New York needs and what Brooklyn needs and what the metropolitan area needs, is housing by the hundreds, by the thousands, and that's really what has to be addressed.
So, anyway, let's just go quickly on and I'll try to wrap it up. So here we have our site. The next slide will show I think this is the prettier picture, we had a boat actually when we took the picture, but to show what we have here is a 30-minute subway ride with a seat into Manhattan. That is valuable, it's almost unthinkable today, and that's the one way, and I'm using us as a litmus test, this is a way to keep and even to attract labor into the City. Give them a nice, conceived development within an easy rapid transit commute and they will save an hour a day making each way commutation a better quality of life, more easily employable. When you're trying to attract labor and they have to spend an hour and a half in a commute, you better spend a lot of money and, anyway, you'll probably have a disgruntled, tired labor force.
So here is how we try to upgrade our project. And, as I said, as we plan along and we saw the costs and we saw some of the consequences, and, by the way, the cost is not only the labor of Manhattan, which have to pay the same amount, but we're competing with the urgency of labor that is like you see an article that double click, in order to get this space ready on time, pays the contractors in advance. If I'm building a $1,000 square-foot apartment in Manhattan, and there are a lot of people doing it, they're paying big bucks for the premium of getting enough workers to build it quickly, we're competing with that and when you heard the Deputy Borough President talk about the fees and the cost and the taxes, we pay per square foot the same fees for (inaudible), for the Building Department and we also are paying, believe it or not, the same conceptual cost in real estate taxes, although it's adjusted later on.
Brooklyn needs nothing less than new development on every level. For Brooklyn to be a borough incentive it needs low income housing, it needs luxury housing, it also needs a lot of market rate housing and in order to do it right, there has to be sweeping reforms, sweeping adjustments, sweeping abatements, and there has to be a lot of encouragement. And if that happens, Brooklyn will retain its place as it is now the leading borough in the world.
Thank you.
MR. WOLLMAN
MR. WOLLMAN: Thank you. I guess there's nothing to say. Please come again. We normally don't have this problem.
Robert Kaplan is the Founding Director of the Commission of Intergroup Relations and Community Concerns at the Jewish Community Relations Council of New York. The Commission has been instrumental in fostering community-based coalitions and community building initiatives such as the Northern Queens Health Coalition, the Greater Southern Brooklyn Health Coalition and the Coalition for Far Rockaway.
Please welcome Robert Kaplan.
MR. KAPLAN
MR. KAPLAN: I got a call just last week, if I needed any technical -- I said, gee, I got power point. Here it is. It's on paper, so it makes life a little bit easier.
The Community Relations Council is an umbrella to over 60 major Jewish organizations in the New York area. It's made up of a number of departments of which mine is the latest creation of JCRC Intergroup Relations and Community Concerns. It was founded in 1993 after a number of studies, particularly wrapped around some of the disturbances that happened in the early '90s, particularly in Crown Heights. My job was initially to go out and see where the next trouble was going to happen, but as I, being a native born New York, particularly in Brooklyn, lived most of my life in Canarsie, and, you know, Canarsie is a perfect example of a community literally growing up around you, but I was born in Canarsie and I guess, you know, I have a few more gray hairs, I look my age, a little bit better, but when I grew up in Canarsie it was primarily farms and swamps, and then they put up a neighborhood. And I say literally threw up the neighborhood because I lived in that area.
Brighton Beach was an area that was no less than 20 minutes away by car from my home. It is now only ten minutes away because I live in the Flatbush section of Brooklyn, another area that's undergone tremendous changes and tremendous changes in housing as well, housing that was dilapidated and falling apart. Many parts of the Flatbush area, particularly in Midwood and Flatbush becomes this amorphous definition, it has now taken on new borders, it's the beginning of somewhere in Flatlands now. I live only ten minutes from Brighton Beach and enjoy that community on a pretty regular basis.
Brighton, as you may all well know from Brighton Beach Memories, was the home to many Jewish immigrants from the last immigration we had in the late 1800s, early 1900s, and this beachfront community was literally home to the vibrant Jewish community, that when the second generation began to grow up, decided to leave. Typical New York City in the early 1960s had well over two million Jews and as of 1990 there was about a million. Interesting enough, in 1980 there was probably about a million Jews in New York City and what happened in the interim between '80 and '90 was not that everyone stayed, is that there was a tremendous influx of Jews from the former Soviet Union and particularly initially into the Brighton Beach area. Brighton Beach has become sort of the archetype for the Russian speaking communities of New York, commonly known as Odessa by the Sea. It quickly became saturated by this population as literally, in the initial years, some came in the late '70s, there was a whole chunk that came in the '80s, but there was an incredible number that started in 1989, really ran up into 1994, where tens of thousands of Jews from the former Soviet Union and other Russian speaking ethnics would come into New York and one of the first stops was Brighton. That community quickly was outstripped of its available housing, even though there is a number of apartment houses in the area, particularly those that have been rehabed and one of the nice things about my department, initially chaired by two people, one is here, Bob Lerman (phonetic), another, Sylvia Deutsche, many of you probably know the name, chairman of the City Planning Commission for a number of years, and she allowed me to sort of rummage through her papers for a while, particularly in reference to Oceana, and her message to you is you should have built 2,000 units, it really would have come in real handy right now.
These waves of new immigrants moved into this area and quickly the area was, as I said, saturated and the institutions in the area that were dealing with resettlement were overburdened, yet this new population that came into the area, interesting enough, quickly acclimated to the American way of life. Now I'm not saying that all of them did, there was a large portion of the population, particularly the older population, those over 50 who were not able to make that transition into the marketplace, even though they came over with high levels of education, but the younger group quickly assimilated themselves into the work force. Interesting enough recent studies that have been done by both UJ Federations, beginning Russian based groups, have signalled to us that the medium income of these early immigrations are higher than the medium income of the general Jewish population of New York City. So as these people began to come into this new-found wealth, they made the typical decisions, and it was referred to before by Mr. Muss that they had a choice of getting better housing. And simply there was a dearth of good housing in the area immediately to the areas where the Russians mainly settled. On the peripherals of Brighton Beach, whether it be in Warbasi (phonetic) or Trump, again, those are areas built a number of years ago, again, housing a population primarily white ethnic population that moved there early on, as that population began to age out and move out, they were quickly replaced by upper middle class and middle class Russians that moved into the area and on the other side, on the eastern side, many of the upwardly mobile Russian speaking people that have moved into the area looked in Manhattan Beach and the peripherals of Manhattan Beach as an area to move, in Seacoast Towers, which is immediately adjacent to the development that was talked about before.
Another issue is that other adjacent areas such as Gravesend and Sheepshead Bay, where there was co-ops and other types of housing stock, again, this middle class and emerging middle class population moved out.
So what we saw in Brighton Beach up until 1994 was a constant replacement of populations. As these huge numbers of people came out of the former Soviet Union, settled in the area, sort of got used to what was happening in America, and moved out. Well, in 1994 things changed radically and since 1994 till today there have been serious decreases in numbers of people leaving the former Soviet Union and coming to the United States to the point where probably in 1994 the number coming into New York City was about 25,000, with the majority going to certain neighborhoods, again, Brighton Beach being one of them. However, according to the news, New Yorkers from the Commission of City Planning, the greater number went to the Gravesend-Sheepshead Bay area, but the myth of Brighton Beach sustained itself. However, again, the numbers dropped precipitously where today we're looking a just a few hundred of this population coming in on a regular basis into New York.
Now, as the people in this community have moved out because they simply did not find the housing opportunities to stay near where they wanted to live, and they really wanted to live in this area, in anecdotal information, in many conversations with people who chose to live in immediate areas around near where the housing stock was more suitable and more comfortable, people really wanted to remain in the Brighton Beach area. There's a lot of positives that Mr. Muss talked about about Brighton Beach. First of all, it's a beach. Literally it's one of the -- it's a beautiful area. The water there has been cleaned up considerably over the years, I'm sure Marilyn can talk about that much more than I can, although I've noticed it physically, it's water that I used to avoid and now would go into, and do spend a number of days at the beach during the summer being so close, it's fresh air, beautiful transportation and Brighton Beach Avenue, which just 20 years ago was seeing literally a disaster economically, has rebirthed itself. Nightclubs and other types of institutions, particularly serving the Russian speaking population.
However, what we have seen in the recent years, particularly since 1994 till now, is a replacement population coming into that area. What we have seen, and if you look at it anecdotally again, of course the update to the newest New Yorkers, '94 through '96, '90 through '94, interesting enough, South Asians, particularly from Pakistan, Bangladesh and such areas, was about two percent, according to the newest New Yorkers moving into the Brighton Beach area. Again, Hispanics, and we're not talking about the Puerto Rican community or the Dominican community, we're primarily talking about a Mexican population, an immigrated Mexican population, that has moved into the area. Up until 1994 the numbers were negligible. From '94 through '96 there was a marked increase in these populations, according to the study done by the New York City Planning Commission, and if you look at the school populations of the two public schools that primarily serve this area, interesting enough there has been a 19 percent increase in South Asian population in the schools and a 30 percent increase of Hispanic population in these schools in the past several years. The beacon school that has opened up recently in that area also sees a very interesting growth of Hispanics.
Now, again, anecdotally, and this information from Coney Island Hospital and information I also got from some conversations with Joe Salvo from New York City Planning, is that the birth rate of babies from Mexican parentage tells of numbers in the thousands living in that area, when the actual count is in the hundreds.
So we're really looking, unless there's been some interesting miracles happening lately, we're really looking forward to some of the new information that's going to be coming out of the new census, if the census, in fact, is going to be count these populations because, in fact, many of these populations are loathed to be counted. However, if we look at how these populations have acted in other parts of the City, such as Flushing, again, upwardly mobile populations, again, that will be looking for this type of middle class housing in the area that is simply not available in great numbers. It is a problem that really needs to be dealt with. If one looks at the area, I don't have slides, I have a paper power point, if one looks at the area to Coney Island Avenue and Ocean Parkway between Shore Parkway and the beach, one looks at an area primarily of bungalows, really old and dilapidated bungalows, some private housing, some small and rundown apartment buildings, and a little bit towards the beach, an area of apartment buildings that have been rehabed during the 1970s that is now primarily occupied by older Russians and older Jewish population in the community.
The information that was given, again, before about Oceana is very interesting that I also have heard that the empty nester populations, particularly those Russians who have moved out of the area are now looking for places for their grandparents to live and other types of people, this is at least what I've heard and I'd certainly like to talk to you about if that's, in fact, true.
Now, with this tremendous demographic change there has also been a amazingly low level of confrontations (inaudible) in this community. What I do is (inaudible) relations and community relations. We have formed something called Greater Southern Brooklyn Health Coalition, it primarily focuses on that area and, interesting enough, we have seen little or no ethnic confrontation in that community considering this new ethnic mix that is living in the area and considering many of these immigrant populations, and we really have to talk about immigrants in a very, very profound way in New York, because immigrants are going to be one of the backbones of the new middle class New Yorker looking for housing possibilities within the New York area. The school system in this area is good, transportation is good, shopping is good, and in the peripherals around the area, not only is there shopping for the Russian speaking population, but anecdotally we know that the population of the Mexicans and South Asians have grown because there has been a tremendous serge of new stores opening up primarily serving Mexicans and South Asians, as well as mosques and Pentecostal churches serving the Latino community.
Another thing that we're going to have to live with is this area has been a staple for political environment as well, very strong democratic conclave. That is going to change. I was told point blank by one person who is looking at a boroughwide race that the old adage of looking at Trump and Warbasi is being the place where you get the votes is no longer so. So, we're looking at a community that is great flux, in great change. What we need to do is form more of the private community partnerships that will allow for the development of this type of housing in the community so these new immigrant populations will stay in New York and will become the backbone and the new life to what is going to be a very profound New York City in the 21st century.
Thank you.
MR. WOLLMAN
MR. WOLLMAN: We're now going to move quickly to the end of the program, Section 4, in which we look at, to some degree, Brooklyn's future impact on the City and region and specifically today I am creating housing for a full range of income levels.
I'd like to welcome Eric Bluestone, a partner of The Bluestone Organization which has developed affordable for-sale and rental housing projects in Brooklyn, Queens and Manhattan, through City, State and Federal programs, both as builder/developer and as general contractor for local not-for-profit organizations.
Please welcome Eric Bluestone.
MR. BLUESTONE
MR. BLUESTONE: I also prepared my presentation on power point. I have to do something visually to catch your attention this late in the day.
As Henry said, I'm a builder, third generation builder. We build both market rate and subsidized housing. And for the past almost ten years now we've been building in the Bushwick area of Brooklyn. Angela Battaglia, who was speaking earlier, talked about Bushwick because that's an area where she's very familiar, she grew up and currently works. As she mentioned, the abandonment and fires of the '70s really decimated the Bushwick area of Brooklyn and as a result I think somewhere close to 50 to 60 percent of the available land in Brooklyn was vacant or abandoned buildings or vacant land. It was in the early '80s that the Housing Partnerships started working with HPD to utilize some of that land for their New Homes Program. We've been developing in the New Homes Program since its inception. We had done other sites, other developments, in the Brooklyn area and we started our first site in Bushwick in the early '90s.
For the people we aren't familiar with the Bushwick area, just to get a rough idea of the demographics, as of the 1990 census, hearing the accuracy of that census, 52 percent of the households in the Bushwick area had a household income of $15,000 or less. So obviously as builders in that market, we were challenged with the ability to try to develop a marketable house and make it affordable to people within the community because that's what our community sponsored and it has a partnership looking for us to do. We build basically it's a two-story, two-family house with a full unfinished basement. The owner's apartment is a three-bedroom and they have direct access to the full basement through the house and then the renter's apartment is a two-bedroom. Typically in construction costs, and I'm going to use today's dollars so we can get a better sense as to where we are right now, the construction costs for a two-family house is roughly 3,000 square feet using our type of construction, which is block and plank, it's a basic house which gives a lot of opportunities to the new homeowners to personalize and expand on. Assuming no subsidies, no sales tax, no land subsidies, that house is going to cost us about $250,000 to build. That $250,000, using today's Fannie Mae underwriting guidelines and taking into account that there is cash flow from the rental apartment, the minimum qualifying income for somebody that, at a nine percent interest rate, is a little over $56,000 annual income, household income. So, needless to say, we have a big gap to bridge to try to cater to even a small percentage of the market that we're catering to.
Just to step back a little bit, that market it primarily a Carribbean-Hispanic and to a certain extent South American-Hispanic community. We've seen the largest part of our target market has been actually people from the community, whether they actually live within the community now or they have family within the community, people who are coming to look at our houses want to be in that community because that's what they know, that's where their family is and that's where they want to be.
So, the Housing Partnership Program offers subsidies on several different levels. One is through HPD, the land is provided with a land subsidy. The land cost is reduced. By working with the Housing Partnership the project has exempt status, reduced sales taxes that we have to pay on the project and also the subsidies that are available through the City, CAA subsidies and also through the State, through the Affordable Housing Corporation, we're able to bring the development cost of that house, including the builder's profit, down to a little under $200,000, 198,000 approximately, which the effects on the affordability issue is multifold. One of them is the minimum income has now gone from 56,600 down to about $39,000 for the household income. The other advantage is through a combination of the reduced purchase price and also through programs through CRA interested lenders as well as through the Housing Partnership budget process, we're able to provide some closing cost assistance which reduces the down payment that a purchaser would be required to bring to the closing from roughly in the mid-20s, 24, $25,000 down to as low as $10,000. You will find the majority of our market, while they qualify with the income, they just don't have the cash to close. So that cash closing assistance is paramount. So basically through the program we're able to make these two-family homes which, if you drive through Brooklyn now, when we started building in the section of Brooklyn, in the Bushwick area, my brother was the super and they varied the hours based on daylight hours because nobody wanted to be there when it was dark. Sometimes it was hard to discern between hammer blows and gunshots and now it's a vital community that's seen an absolute rebirth, not only on the residential side, but also now we're also seeing it on the commercial and economic side with regional, national retail operations coming into Myrtle Avenue and Broadway and also mom and pop operations and also the nursing home and some of the other affordable housing programs that Angela talked about earlier.
But this is just a beginning. As Joshua Muss said, it's such a small piece of the need for housing for not only this section of Brooklyn, but in Brooklyn as a whole, and I'm only going to talk about the affordable side because I know Jeff is going to talk a little bit about the middle income. There's more that can be done and to avoid total redundancy, I'll just go through -- we've got to streamline the process. Thousands of dollars were wasted in time, thousands of dollars wasted in fees. We're taking subsidy money and giving it back to the City in fees. That just doesn't make any sense. We can streamline the process, we can make it more efficient, and we can also expand it to the privately owned land. Most of our building is in-fill, four houses, six houses, within a six to eight-block area, but there is a lot of privately owned lots that are scattered around those areas where there are owners who are sitting on their land, they just don't know what to do. It doesn't make sense to build a new market rate right now and they can't figure out what to do next. So by applying some of the concepts of the Housing Partnership Program and some of HPD's other programs to the private owners, we can probably spur them on and give them the incentive to provide additional housing units within the Brooklyn area.
I'm done.
MR. WOLLMAN
MR. WOLLMAN: We're at the concluding moment of this morning and before we turn to Jeffery Stern of Jeffrey Stern Associates, I'd like to say that the power point presentations and the slides which were not seen this morning will be on the Institute's web and that this is not our usual mode of operation here nor is the lack of hospitality and air-conditioning our usual mode.
I would like to take a moment to introduce Professor John Goring (phonetic) who was with us all morning and is sitting here now in the front row who heads, in Baruch College, in the School of Public Affairs, the B.S. degree program in real estate and metropolitan development, I think certainly the most exciting educational endeavor in undergraduate real estate education in New York City, probably ever in the history of the City University and Baruch College and the City University are lucky to have someone of Professor Goring's stature.
The third and final day of the roundtable will take place on May 22nd. It will be devoted to Downtown Brooklyn. The Chairman of the Planning Commission, Joseph B. Rose, Alair Townsend and a distinguished group of speakers who have tremendous stakes, both economically, politically and I think in terms of the City itself, will lead the (inaudible) of speakers on the third and final day. If you have made reservations, please reconfirm them. We will probably call you because attendance, as you can see, has been very heavy at each of these sessions.
It give me pleasure now to conclude the second day by introducing Jeffrey C. Stern. Mr. Stern is President of Jeffrey Stern Associates, a development and consultating firm that has been involved in rehabilitation of residential buildings in projects awarded by the City of New York as well as the construction of two-family homes under the City's Housing Partnership Program. He previously served as Director of the Office of Regional and Intergovernmental Programs for the New York Department of City Planning.
Please welcome Jeffrey Stern.
MR. STERN
MR. STERN: I just want to compliment everybody from the City through the swelter because -- and I appreciate the patience.
The first thing I do want to mention is just that, Henry didn't mention it, but I was Deputy Director of Planning from 1970 to '75. I often don't like to talk about it because you can tell my age, but that was a time, and I know there was some talk about Bushwick when it was day after day the fires were burning down the buildings because they were wooden buildings and the fire swept through the parapets and it was just the most frustrating thing. I was trying to do a plan, not only did that happen, to try to get the plan done because every day the buildings were burning down, the Nixon administration of course cut out the housing subsidies.
Part of what I've been doing in the last few years, as well as housing, recently we developed the Broadway-Bushwick Retail Development Project which is between Gates and Palmetto Streets in Bushwick, which is right in front actually where much of the new Partnership homes have gone. What is not really recognized is that even in the area of like Bushwick, it's on the junction between Bushwick and Bed-Stuy, within a mile of the area there's almost a billion dollars of buying power. So it's often forgotten that when you're in a low moderate income community, even what's considered a very low income community, there's an extreme amount of buying power. We've ended up in our project, we're now building a new facility, a regional facility, for the post office, that will go on Gates and Broadway. We have an R & S Straus, we have a day care facility, we have a local beauty salon, we have a check cashing place and a medical facility. Now, all this wasn't easy. It took us seven or eight years to put the whole thing together. It involved certain grants from the City of New York, a grant from the City of New York, but it's really -- I'm very excited about it because it was part of the area that was burned down and I think we've really helped to get things going. I know that the Deputy Commissioner didn't mention it, but there's going to be a new RP where they're going to off some sites even along the Bushwick corridor.
What I did write up some notes about was about it concerns middle income housing and I really don't want to be repetitive, but if it's okay some of what I may say may be a bit repetitive. I think, as was mentioned, most of the City housing programs, such as low income housing tax credits, 421A affordable housing, POP, Housing Trust Fund, and I'm also talking about State programs, that really focused on low income housing. For real upper income, people building houses, in New York City there's an incredible really tax abatement for -- the rates are very low, so it's very affordable to build a $600,000 home, for example, and compared to Nassau there would be a difference of maybe 18,000 to $20,000 a year. So it's not really realized that as far as the real upper income, as far as building homes, is a real benefit.
Now, although most Brooklynites are middle income, which categorizing at the beginning from 60 to 240 percent of the median income, or 25,000 to 100,000 in income, as has been said Mr. Muss in ways (inaudible) all through my professional career and as the Deputy Borough President said, there's been very, very little housing built in Brooklyn despite the great efforts of the City and whatever everybody's been trying to do. And further, when we go out to the community boards to try to get support for low income housing, it's very difficult because people are frozen out of both the subsidized housing and the market rate housing because of their income and income restrictions. So even if you want to try to mix it up a little bit, you can't do that because of certain program restrictions. So as we talk there really is a quiet really a real crises in the City concerning middle income housing and, again, as I think has been said, the City's top program really has been a great program, started in 1977, but it's really been a drop in the bucket, perhaps producing four or 600 units of middle income housing in Brooklyn since 1997. And of course there is the New York City Housing Partnership Program and the City also has a New Homes Program.
Now, the question then is what can we do? Well, the first thing is that the City Department of Planning needs to provide more and better, but I mean more and less expensive land for housing construction. Well, the real effort now is to change the entire zoning resolution or the text, it's called the Unified Bulk Amendments, and I think, as most of you know, it's concerned itself really with limiting the height of buildings in Manhattan to I thing something like 480 feet in the midtown area as well as a portion of Downtown Brooklyn. But other than that it really hasn't concerned itself with what can it do to give a boost to housing in the outer boroughs. And we're first going to look at perhaps the manufacturing areas in Brooklyn. I know I recently read the 1978 Plans for both Greenpoint and Williamsburg, and they're really demanding that rezoning or mixed-use zoning, more density zoning, and I think we've really got to look at the neighborhoods of Vinegar Hill, Prospect Heights, Greenpoint and also portions of Fort Greene and maybe, as was said, portions out near Coney Island, which is not so manufacturing, but does need some upzoning.
The very widespread R6 and R7 zones need to be revised to permit a practicable FAR of five and six respectively. That's almost twice as much. And that parking requirements need to be scaled back and even some R5 and R4 areas need to be rezoned as R6, particularly on main streets. Even if you're a profit making developer and you're trying to build senior housing, that's what people -- even I'll go as far as assisted living facility, and it's not nonprofit sponsored, it's very -- you'd have to do so much parking. So it doesn't really make it economic sense. There are things that can be done with the zoning text.
The City needs to provide a deeper tax subsidy under the 421A Program for middle income units, something like the J51 Program which provides a tax holiday over a 30-year period, really which would be the term of the mortgage. And of course, as I said, the City needs to take some more of its -- whatever land that is available, it should be thought out in the context of a plan and made available for actually a mixture of housing including middle income housing.
One of the most important things, and I'm a little bit nervous about saying it, but if you look at most of the bond money that used in New York City I thing is used for luxury housing in Manhattan. Now, that necessarily a bad thing. On the other hand, coupled with that is an immediate tax abatement so that someone who is doing that doesn't have to go out and buy 421A certificates, for example, and through the 421A Program not only can you produce low income housing, but you can do housing which is moderately middle income at 80 percent immediate income. But we need to see if we can get some further shift, well, really a shift, of some of that money into more middle income housing. And I think it was mentioned here that the Mitchell-Lama Programs, which was stopped in the '70s, in fact when I was working for John Zucotti (phonetic) in the Department of Planning, who became Deputy Mayor, but the Mitchell-Lama Program built a great deal of middle income housing throughout the City, both rental and co-operative form of housing, and we really need to find a way to bring that program back in some form, again, in combination with better use of some land and doing something with the building trades and some other things that everybody has talked about during the whole day. And that would involve, of course, a great effort for all of us to work together.
I'm Chairman of the Middle Income Coalition for New York and I brought some copies of my proposal, if anybody would like to have it. And again, I don't want anybody to think I'm getting away from my commitment to affordable housing because I spend most of personal life on that, but we really have to get into this middle income area. I think it can be done. I think there's a willingness, there's so much talk about, we just have to get over the hurdle.
Thank you.
MR. WOLLMAN
MR. WOLLMAN: I thank all of you who stayed through the entire morning. I remind you again that the fall issue of Properties will be the record transcript and the much of the individual material which you didn't see today.
Thank you.
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