Housing Starts: Domino as Precedent? | de Blasio at 100 days | Private Equity as Landlords

1. A ‘Domino’ Effect?: Developers and advocates eye the Brooklyn property as a potential precedent for affordable housing policy. What a difference a new administration makes. At the end of last year developer Jed Walentas had a deal in place to turn the waterfront Domino Sugar Refinery into high-end Williamsburg apartments, including 660 units of affordable housing- roughly 30 percent of the building’s capacity. Walentas’ company, Two Trees, had already played an integral role in transforming formerly down-and-out Brooklyn neighborhoods like DUMBO into glossy, expensive new locales for the rich and hip-and the Domino project appeared set to be the next outpost in Walentas’ empire. Then Mayor Bill de Blasio coasted into office in January touting his campaign promise to create or preserve 200,000 units of affordable housing. Rather than abiding by the deal Walentas had struck with the Bloomberg administration, de Blasio let the developer know that Two Trees’ plans for Domino were in jeopardy because its affordable housing allocation was insufficient. [City and State – 04/08/14]
2. The search for affordable housing is pushing the middle class to the exurbs. New data and maps from the real estate research firm Zillow shed light on the uneven nature of housing prices across several major U.S. cities and metros. One commonly held metric is that families should devote no more than about 28 percent of their incomes to housing. But in certain parts of the country, that’s easier said than done. By the end of last year, the median family would need to devote much more than a third - up to nearly forty percent - of its income to mortgage payments on the median home in metros like San Jose (36 percent); San Francisco (39 percent); and Los Angeles (40 percent). These proportions are even higher than in the pre-bubble, pre-crash period of 1985-2000, when the median household would have needed to devote still substantial percentages of its income to afford the median house: 32 percent in New York; 35 percent in Los Angeles; 35 percent in San Jose; and 38 percent in San Francisco. [The Atlantic Cites – 04/08/14]
3. Much yet to do on affordable homes. To reach the goal of delivering 200,000 units of affordable housing, New York City Mayor Bill de Blasio and his administration must build or preserve apartments at the rate of about 55 a day.  Almost 100 days in, they are behind. Still, even in its early days, the administration has struck a couple of high-profile deals that offer an early indication of how it plans to tackle its goal. The approach involves high-level administration officials negotiating with developers and pressuring them to deliver more units in exchange for being allowed to build taller, potentially more profitable towers. [Wall Street Journal – 04/06/14]
4. Will de Blasio’s affordable housing plan take on NYC’s parking mandates? With a plan due by May 1, the clock is ticking for Mayor Bill de Blasio’s housing team to come up with a plan to improve housing affordability. Department of Housing Preservation and Development Commissioner Vicki Been, who authored reports on the city’s regressive parking mandates before joining the administration, is at the center of the team producing the plan. But it’s still not clear that the final product will consider the elimination of parking requirements as a strategy to create more affordable housing. [Streetsblog – 04/10/14]
5. Why Wall Street firms make terrible landlords.  In the Bronx, Benjamin Warren fears that he and other residents could burn to death in a fire because management has blocked both sides of the passageways between buildings designed to offer ways out of the massive apartment complex. Nearby, Liza Ash found herself intimidated by nearly a dozen hired men when she and other residents of her building, which had heat or hot water only sporadically this past winter, attempted to organize a tenants’ meeting in the lobby. A little farther south, Khamoni Cooper and her neighbors receive a constant stream of fake eviction notices ordering them to vacate their apartments within five days, even though all of them have paid their rent. These three tenants—and nearly 1,600 more families in 42 buildings—are living through one of the largest single foreclosures to hit New York City since the financial crisis began seven years ago. But here’s the twist. The owner of these buildings is far from a traditional landlord. It’s actually a conglomerate of private equity firms that bet it would be able to squeeze more money out of these buildings than it ultimately could—and ended up unable to pay back the $133 million mortgage. [The Nation – 04/08/14]
6. de Blasio is urged to alter housing plans at Brooklyn park. Brooklyn bridge Park, which stretches 1.6 miles along the East River waterfront, was a creation of the administration of Michael R. Bloomberg, with a novel - and contentious - financing mechanism in the form of luxury housing in the park. But now that City Hall is under new leadership, a group of elected officials is calling on Mayor Bill de Blasio to scale back some of that housing, intended to help pay for the costly upkeep of the park, which is buffeted by tides. In particular, they want the mayor to halt plans for two residential towers at Pier 6, one of several recreational piers in the park. [New York Times – 04/10/14]
7. NYC law opposed by banks to move forward. Now that Mayor Bill de Blasio has appointed his finance commissioner, a law passed two years ago forcing banks to publicize their efforts to help poor New Yorkers is on track to take effect, advocates say. The Responsible Banking Act, which was passed by the City Council in 2012 over former Mayor Michael Bloomberg’s veto, was never implemented by the former mayor’s administration, and supporters resolved to wait for his successor. Under Mr. de Blasio, the Department of Finance has yet to finish creating a panel needed to carry out the law by publishing an annual report on how banks that take city deposits are meeting the credit needs of neighborhoods. [Crain’s New York Business – 04/07/14]
8. NYC’s resident market is hot all over. Despite the chill in the air, residential sales across the entire city saw healthy growth in the first quarter of 2014, according to a report released Thursday by the Real Estate Board of New York. The average sale price over all, however, dipped slightly in the period. [Crain’s New York Business – 04/10/14]
9. Defining affordability: Whether de Blasio achieves his ambitious housing goal could depend upon how he measures “affordable.” Perhaps the most important factor yet to be addressed by the administration in determining how it will tackle its goal of 200,000 units is how it will define affordable-a critical understanding, yet one upon which housing experts, advocates and real estate developers do not necessarily agree. To elucidate the de Blasio administration’s understanding of affordable, it may prove instructive to consider the first-and so far only- major real estate deal it has brokered: the redevelopment of the Domino Sugar refinery on the Williamsburg waterfront in Brooklyn. [City and State – 04/07/14]
10. Brooklyn Housing Court, like many city renters, can’t find a new home. Like much of New York, Brooklyn Housing Court is having housing issues.The court has outgrown its cramped quarters in Downtown Brooklyn, but it is not as though it can just decamp to Staten Island or Queens for a bigger space. It is after all, Brooklyn Housing Court, where people from across New York’s most populous borough hash out disputes over rent and rodents. Two years after court officials began working with the city, which is responsible for providing facilities, the search has yet to produce a new home that suits the frenetic operations of the court, at 141 Livingston Street. So when the city’s 10-year lease for the Livingston Street space expires on May 31, Housing Court cannot move - even if the elevators break down frequently, even if the air-conditioner falters in the summer, and even if the landlord once made it onto Mayor Bill de Blasio’s ‘Worst Landlord’ watch list when he was the public advocate. [New York Times – 04/03/14]