The Seward Park Urban Renewal Area

The Seward Park Urban Renewal Area, Forty-five Years Later:
Affordable to Whom?

By Eugene Chen

I. Background

From the 1950s through the 1960s, two thousand families with low incomes were displaced from their homes when the City of New York embarked on an urban renewal plan targeting the area east along Delancey Street at the foot of the Williamsburg Bridge, otherwise known as the Seward Park Urban Renewal Area (SPURA).1 Forty-five years later, the “Seward Park Slum Clearance Project” left 165 million square feet of parking lot space, devoid of any signs of human occupation aside from the coming and going of vehicles. After a contentious community debate, the City Council passed a resolution (the “Resolution”) on October 11, 2012, for a mixed-use plan to develop SPURA.2 Proposals were due to the New York City Economic Development Corporation (NYCEDC) on May 6, 2013, and on September 18, 2013, Mayor Bloomberg announced that Delancey Street Associates LLC, a joint venture composed of L+M Development Partners, BFC Partners, and Taconic Investment Partners, had been selected to develop the site.3 The plan calls for 60/40 residential and commercial development, with 500 units of permanently affordable housing, out of the 1000 units of housing being built.4 In all likelihood, the developer chosen to develop SPURA will apply for the 421-a tax exemption, an incentive intended to encourage the construction of market-rate and affordable housing in New York City (the “City”).

The decision by the City to develop SPURA forty-five years later galvanized community groups and residents in Manhattan Community Board 3 (“CB3”), a neighborhood historically made up of low-income immigrants, who wanted to ensure that the project would benefit the community and not just enrich private developers.5 Though community boards did not exist6 when the City razed the area it deemed a “slum” in the 1960s, it was at community board meetings and hearings that the community voiced demands for more affordable housing, the construction of more schools in a burdened school district, prevailing wage jobs, and a ban on big-box stores in the plan for SPURA. This paper will examine the meaning of “affordability,” as defined by the U.S. Department of Housing and Urban Development through the concept of Area Median Income, the alternative definition of affordability known as Local Median Income, and the role of the 421-a Real Property Tax Exemption in the creation of affordable housing.

II. SPURA’s “Affordable” Units are Not Affordable to Many CB3 Residents because the Units’ Median Income Guidelines Count the Incomes of Surrounding Wealthier Counties.

SUPRA’s 50% mandate for permanently affordable housing was unprecedented7 in a private mixed-use project in New York City, but the notion of what is “affordable” is surprisingly subjective. “Affordability,” though governed by numbers, is a calculation that depends on various factors, including the size of the geographic area sampled and who is counted. As far as affordable housing programs at the federal, state, and local levels are concerned, the notion of affordability is pegged to a hard number known as Area Median Income (AMI), which is determined by the United States Department of Housing and Urban Development (HUD), a federal agency.8

The Local Median Income of CB3 is a More Accurate Representation of Affordability in the Lower East Side than HUD Area Median Income.

The HUD AMI calculation does not accurately represent CB3 because it takes into account the incomes of not only the five boroughs of New York City, but also the surrounding counties of Nassau, Suffolk, Putnam, and Richmond, whose median incomes are significantly greater than that of CB3.9 The use of incomes from this area (referred to by HUD as the Metropolitan New York City Area), resulted in a 2012 HUD AMI of $83,000 for a family of four living in CB310—almost twice as much as CB3’s actual Local Median Income (“LMI”) of $43,518,11 according to the Furman Center for Real Estate and Urban Policy (the “Furman Center”).12

When the income guidelines for the proposed 500 units of affordable housing in SPURA were released, community groups questioned whether these guidelines were indeed affordable for the residents of the Lower East Side.13 Eligibility for the affordable units will be governed by bands of affordability based on percentage ranges of HUD AMI.14 Using HUD’s 2012 AMI of $83,000 for a family of four, this means that 20% of the total units will be reserved for low-income families of four earning $41,000 annually, 10% for low-income seniors, 10% for moderate-income families of four earning $107,000 annually, 10% for middle-income families of four earning $136,000 annually, and the remaining 50% reserved for market-rate housing.15

The 500 units billed as “affordable” belie how unaffordable these units actually are to the current residents of CB3. According to HUD, rent is only affordable when a household pays less than 30% of its income towards rent.16 The Furman Center found that the median income of CB3 in 2010 was $43,518, with almost half of CB3 earning below $38,000.17 For those residents earning $38,000, an affordable monthly rent for CB3 would be $950.18 And yet, at the SPURA affordability guidelines, a low-income rental unit is $1,225 for a low-income family of four, which makes up 39% of a typical CB3 household’s income.19 / 12).] At that rent, roughly half of the residents of CB3 would be unable to afford even the so-called “low-income” units proposed for SPURA under the AMI guidelines.20 And with only 200 affordable units available, it is doubtful whether these new affordable units will do much to prevent displacement of current low-income residents due to gentrification. Therefore, many advocate for the use of LMI in defining “affordability” to more accurately reflect a community’s housing needs.21

Neither Area nor Local Median Income Calculations Account for Displacement Due to Gentrification.

As defined, the income guidelines for SPURA’s affordable units would do little to stop gentrification in the Lower East Side of Manhattan, which in the past ten years has become a destination for the young and well-to-do.22 In the Lower East Side, the issues of affordable housing and gentrification are inextricably linked, since longtime residents are forced to leave when they can no longer afford their own homes due to the influx of wealthier residents. In New York for Sale, urban planning policy expert Tom Angotti examines the economic injustice behind gentrification:

As tenants and small business owners invest their time and money to gradually upgrade their neighborhoods, real estate investors become attracted to those areas and anxious to capitalize on the improvements…. [These investors] effectively appropriate the value generated by others. This is the essence of what is now known as Gentrification. It is not simply a change in demographics. It is the appropriation of economic value by one class from another.23

Framed this way, setting aside housing units for low- to moderate-income earners is an intuitive solution to the problem of gentrification. To this end, many affordable housing advocates insist that LMI24 be used to define affordable housing guidelines because it is more accurate than HUD AMI.25 While LMI is a better reflection of a community’s income, it is also an imperfect measure. LMI, like AMI, fails to illuminate what part of a median income increase in a community results from the displacement of low-income earners by higher-income earners. According to the Furman Center, from 2008 to 2010 the LMI of households in CB3 increased from $36,408 to $43,518.26 This is surprising, especially given the recession in 2008, from which the nation has not completely recovered.27 This increase in median income may be due in part to the influx of wealthier residents, a steady pattern of gentrification occurring in the Lower East Side since at least the 1970s.28 At the same time that the LMI of CB3 increased, the City’s unemployment rate for Hispanics, who make up about 20% of CB3, rose from 7.2% to 13.3%29—nearly three times as high as white residents, who make up 30% of CB3.30 Although LMI is more representative of CB3 than HUD AMI, using LMI is still problematic because it does not take into account the historical impact that gentrification has had on communities facing a shortage of affordable housing. Income increases due to the displacement of low-income residents, particularly immigrants and people of color, should be taken into account to fully address the effects of gentrification with respect to affordable housing, regardless of whether AMI or LMI is used in determining affordability standards.

To be fair, the City Council Resolution does attempt to address gentrification in several ways through what it calls “community preferences.”31 Under the Resolution, at least 50% of the affordable units (250 units) will be given to qualifying CB3 residents.32 It also aims to give preference to CB3 residents for 50% of all jobs generated from the project (during and after construction). And, to address gentrification in commercial contexts, the Resolution addresses the displacement of small businesses in the soon-to-be demolished Essex Market by guaranteeing them a space in the new market facility at a similar rent, with moving costs paid for by the City.33

Gentrification is a complex problem, which, in the case of the 421-a tax exemption, is simultaneously addressed and perpetuated through tax exemptions given to luxury developers who integrate affordable housing into their projects. In the next section, the 421-a tax exemption is discussed as an imperfect solution to inducing the development of affordable housing.

III. Developers May Receive a Windfall under the 421-a Real Property Tax Exemption, Especially if the Land in SPURA is Sold at a Discount.

Delancey Street Associates will almost certainly apply for the 421-a tax exemption to help finance construction. Under 421-a, owners of exempt property pay significantly lower property taxes, which are assessed at the property’s value prior to any improvements instead of at its value after improvements.34 So, if the value of undeveloped land in SPURA is worth $1 billion now, and after the construction of apartments, condos, parks, and stores will be worth $10 billion, developers of the property would only pay taxes on the pre-improvement value of $1 billion for fifteen years.35 In exchange for the tax exemption, a developer in Manhattan benefiting from 421-a must allocate 20% of newly built residential units to on-site affordable housing,36 which are subject to rent stabilization for thirty-five years.37

The Pratt Center for Community Development argues that 421-a does little to create affordable housing while providing windfalls to developers of market-rate housing. The Center contends that incentives are not actually needed to create market-rate housing in robust housing markets like New York City—especially in Manhattan, which received 75% of the benefit in 2005.38 Indeed, “only one-third of new construction utilizes the program, so it is clearly possible to develop without the subsidy.”39 In the 2011 fiscal year alone, the City lost over $1 billion in tax revenue due to 421-a exemptions,40 but according to the Pratt Center, only 5,700 units of affordable housing have been created through 421-a since the program’s inception.41 The Pratt Center argues that not only is the 421-a tax exemption unnecessary to encourage development, but such a windfall to developers deprives the City of hundreds of millions in tax revenue dollars each year,42 which could be used to build 100% permanently affordable housing.

In the case of SPURA, the Resolution so closely tracks the requirements of N.Y. Real Prop. Tax Law § 421-a such that Delancey Street Associates will likely qualify for the tax exemption. Provisional requirements for 421-a that SPURA guidelines meet or exceed include the mandate for 20% on-site affordable housing;43 the affordability guidelines themselves, which are pegged to a percentage of AMI;44 that residents of the community board where the property is located be given priority for purchase or rental of 50% of the affordable units;45 that service employees employed at the building be paid a prevailing wage;46 Given the City’s perception of the tax exemption’s importance in creating affordable housing, it is not unreasonable to assume that those involved in SPURA’s planning made efforts to ensure that the project would meet or exceed 421-a requirements in order to attract developers.

Early on, there was speculation that the land in SPURA would be sold at a “huge discount.”47 It is unclear how the potential for 421-a tax exemptions factored into $180 million price that Delancey Street Associates paid for the enormous parcels of land in SPURA,48 which by all accounts, is an unprecedented development opportunity. To put into perspective the bargain price tag of $180 million for 6 acres of land with a potential for 165 million square feet of development: in March 2013, Extell Development paid $103 million for a nearby waterfront site at 250 South Street zoned for 1 million square feet of development.49 The City, having come further than it has in previous attempts to develop SPURA over the last forty-five years, was likely eager to sell the land for development. The requirement for affordable housing was likely a factor in SPURA’s price as well. However, the price paid for the SPURA site by Delancey Street Associates is an anomaly for prime Manhattan real estate. Therefore, in addition to this arguably discounted price, any 421-a tax exemptions (that Delancey Street Associates will easily qualify for) would truly amount to a windfall. The City could instead have used that money towards reducing cutbacks in public services and education in low-income communities like Manhattan’s Lower East Side.

IV. Conclusion

After forty-five years, the City is finally moving forward with plans to develop SPURA as a mixed-use, mixed-income development with 50% of the housing earmarked as permanently affordable. However, questions remain as to whether gentrification can be prevented, as many residents of Community Board 3 will not be able to afford even the 200 units set aside for low-income earners, since the guidelines used to determine their eligibility are based on higher federal AMI calculations. Additionally, affordable housing advocates express concern over what they deem a windfall that developers of SPURA will receive from 421-a tax exemptions, money that could otherwise be used by the City for the public. Nonetheless, the plans to develop SPURA are unprecedented in requiring half of all residential units built be permanently affordable. SPURA development is highly anticipated by many residents of Community Board 3, as they seek some measure of closure after forty-five years of blight caused by the City’s razing of the Seward Park area.

CUNITY Conversations: Toxic Sweatshops: Regulating the Import of Hazardous Electronics with Allie Robbins

Come join us for the fourth and final installment of our discussion series, CUNITY Conversations!

CUNITY Conversations is a discussion series designed to create discussion around a particular topic. It is an informal time to get together, hang out, and talk about a relevant social justice issue.

The next installment of the CUNITY Conversation series is Wednesday, April 1, from 1-2:45 pm, in the Community Room, 3/116.

Bring your lunch and join us for snacks plus great conversation discussing Allie Robbin’s article, “Toxic Sweatshops: Regulating the Import of Hazardous Electronics.”

The article discusses the rise in consumer use of personal electronic devices and how it has led to a boom in electronics manufacturing worldwide. Along with the expansion of production have come serious questions about the safety of production processes, as large numbers of workers and their children have become seriously ill. This article proposes that the United States, as a leading importer of electronic devices and components, create an Electronics Import Safety Commission to make sure that both workers and consumers are safe. This commission, modeled after the Consumer Protection Safety Commission, would monitor and regulate electronics manufacturing and would enhance transparency and accountability throughout the supply chain.

Join the dicussion on Twitter and Facebook on the hashtag #cunityconvo.

New Board Members Announced

Congratulations to the 2015 – 2016 CUNY Law Review Board!

Samuel Bruce
Elizabeth Vulaj
Digital Articles Editors

Hoda Mitwally
Executive Articles Editor

Jonathan Cantarero
Serena Newell
Chloe Serinsky
Notes & Comments Editors

Aubree D’Alfonso
Alanna Sakovits
Public Interest Practitioner Section (PIPS) Editors

Leonard Leveille
Special Events Editor

Jacqueline Meese
AJ Wipfler
Managing Articles Editors

Tom Power
Managing Editor

Alexandria E. Nedd
Editor-in-Chief

Storytelling Guantánamo: Using Creative Advocacy & Lawyering to Challenge Dominant Political and Media Narratives

WITH A SPECIAL DOCUMENTARY SCREENING OF WAITING FOR FAHD

CUNY Law Review, in collaboration with the Center for Constitutional Rights (CCR), presents:

A CONVERSATION WITH
Omar Farah, Staff Attorney, CCR
Murtaza Hussain, Journalist, The Intercept
Professor Ramzi Kassem, Immigrant & Non-Citizen Rights Clinic
Aliya Hussain, Moderator, Advocacy Program Manager, CCR

STUDENT CONTRIBUTIONS
Andrew Adams & Syeda Tasnim
Immigrant & Non-Citizen Rights Clinic, Law & Security Docket

6PM, TUESDAY, MARCH 10, 2015
Reception at 6pm, panel begins at 6:30pm
CUNY School of Law, Community Room, 3/116
2 Court Square
Long Island City, 11101

FREE AND OPEN TO THE PUBLIC
Please register at: bit.ly/storytelling-gtmo

CUNITY Conversations: Exploring Sex Work, Harm Reduction, and Housing Rights in NYC with Chelsea Breakstone & Zoë Root

Come join us for the third installment of our discussion series, CUNITY Conversations!

CUNITY Conversations is a discussion series designed to create discussion around a particular topic. The discussion leaders are the Law Review’s Note and Comments student authors, along with professors and practitioners. It is an informal time to get together, hang out, and talk about a relevant social justice issue.

The next installment of the CUNITY Conversation series is Wednesday, March 4, from 6-8pm, in the Community Room, 3/116.

Notes and Comments student author and 3L Chelsea Breakstone will be presenting “Exploring Sex Work, Harm Reduction, and Housing Rights in NYC,” along with Zoë Root, Staff Attorney and Human Trafficking Intervention Court Part Coordinator from The Bronx Defenders.

Join the dicussion on Twitter and Facebook on the hashtag #cunityconvo.

Vol. 17.2

Explore the digital version of  Volume 17.2.

Public Interest Practitioners Section (PIPS)

Notes & Comments 

Tax a Bank, Save a Home: Judicial, Legislative, and Other Creative Efforts to Prevent Foreclosures in New York by Erica Braudy, Staff Attorney at the New York Legal Assistance Group, Housing Project/Mobile Legal Help Center, J.D. CUNY School of Law (2013).

Executive Article

The Chicago Police Torture Scandal: A Legal and Political History by G. Flint Taylor, founding partner, People’s Law Office (PLO).

Essay

Discriminatory Maintenance of REO Properties as a Violation of the Federal Fair Housing Act by Stephen M. Dane, of the civil-rights law firm Relman, Dane & Colfax, PLLC; Tara Ramchandani, associate at Relman, Dane & Colfax, PLLC; and Anne P. Bellows, 2013 Relman Civil Rights Fellow.

Event

A Tribute to Justice: Honoring Forty Years of A Conversation with Struggle to Advance Judicial Process for Crimes Against Humanity in Chile with Judge Baltasar Garzón Real, internationally renowned Spanish jurist who issued the first detention request, through Interpol, for former Chilean dictator Augusto Pinochet on charges of abductions, torture, murder, forced disappearances and terrorism; Sir Geoffrey Bindman, QC, a British attorney specializing in human rights law who represented Amnesty International and Chilean victims’ interests in the case against Chilean dictator Augusto Pinochet in the late 1990s; and Joan Garcés, a Spanish attorney who has made major contributions to international human rights law in the fight against impunity for heads of government who commit crimes against humanity. Moderated by Almudena Bernabeu, International Attorney for the Center for Justice and Accountability (CJA).

 

 

Video — The Long Crisis: Economic Inequality in New York City

The City University of New York Law Review presented The Long Crisis: Economic Inequality in New York City, on November 12, 2014, at the CUNY School of Law.

The Long Crisis reflected the theme of the Law Review’s 18th volume, which focuses on the role that economic inequality and injustice play within the context of social justice legal issues and practical solutions lawyers and activists are employing to help overcome the inequality.

The panel featured: Fahd Ahmed, acting executive director of DRUM—South Asian Organizing Center; Tom Angotti, professor of Urban Affairs and Planning and Director of the Hunter College Center for Community Planning and Development; Stanley Aronowitz, Distinguished Professor in the Ph.D. Program in Sociology at the CUNY Graduate Center; Jennifer Jones Austin, CEO and executive director of Federation of Protestant Welfare Agencies; Shawn Blumberg, legal director of Housing Conservation Coordinators; and Robin Steinberg, founder and executive director of The Bronx Defenders.

Case Comment: United States v. Alvarez (2014)

Where Are You Going, Where Have You Been? Seriously, Let Me See Your GPS.

Warrantless Search of GPS Device Held Constitutional: United States v. Alvarez, 8:13-cr-009 (N.D.N.Y. 2014)

By Rajendra Persaud 1

            Technological advances continue to confound already dense fourth amendment jurisprudence. As modern devices become more powerful, the information stored and accessed within raises new issues that did not exist only a few decades ago. As such, new technological devices have the potential to create cases of first impression upon the courts. Recently, in U.S. v. Alvarez, Judge McAvoy ruled warrantless searches of cell phones unconstitutional in the absence of exigent circumstances or a need to protect officer safety.2 The opinion compared cell phones to modern computers3 that house a wealth of private information within4 (akin to personal residences5). Thus, the smart phones were granted protection similar to computer hard drives6 and all information obtained from the seized phones was suppressed.7

Continue reading

Vol. 16.2

Explore the digital version of  Volume 16.2.

Public Interest Practitioners Section (PIPS)

The Continued Marginalization of People Living with HIV/AIDS in U.S. Immigration Law by Cristina Velez, Supervising Attorney of Immigration at the HIV Law Project, a non-profit based in New York City.

Challenging the Practice of Solitary  Confinement in Immigration Detention in Georgia and Beyond by Azadeh Shahshahani, director of the National Security/Immigrants’ Rights project at the American Civil Liberties Union Foundation of Georgia & Ayah Natasha El-Sergany, an attorney based in Seattle, Wash., and 2010 graduate of the University of North Carolina School of Law.

Executive Article

J. McIntyre and the Global Stream of Commerce by Frank Deale, Professor of Law, CUNY School of Law.

Notes & Comments 

Not Guilty By Reason of Gender Transgression: The Ethics of Gender Identity Disorder as Criminal Defense and the Case of Pfc. Chelsea Manning by Madeline Porta, J.D. 2013, City University of New York School of Law.

Because Parents Owe it to Them:Unaccompanied LGBTQ Youth Enforcing the Parental Duty of Support by Maria Roumiantseva, J.D. 2013, City University of New York School of Law and Staff Attorney, The Legal Aid Society, Juvenile Rights Practice.

Event

Work, Work, and More Work: Whose Economic Rights? A conversation between Professors Stanley Aronowitz, Distinguished Professor of Sociology in the Ph.D. Program in Sociology at the CUNY Graduate Center and Director of the Center for the Study of Culture, Technology, and Work & Shirley Lung, Professor of Law, CUNY School of Law and former Executive Director of the Center for Immigrants’ Rights. Moderated by Professor Ruthann Robson, Professor of Law and University Distinguished Professor, CUNY School of Law.

 

 

VAWA @ 20: Index

VAWA @ 20 – Index

Introduction – Nishan Bhaumik on the history of the Violence Against Women Act’s passage and reauthorization and the goals of the VAWA @ 20 series.

VAWA After the Party: Implementing Proposed Guidelines on Campus Sexual Assault Resolution – Mary P. Koss and Elise C. Lopez of the University of Arizona on the effect of existing and proposed VAWA guidelines on the process for sexual assault adjudication at institutions of higher education.

Roll Back “Prison Nation” – Donna Coker, Professor of Law at the University of Miami School of Law, on VAWA’s contribution to hyper-incarceration.

Raising the Visibility of the Margins and the Responsibility of Mainstream – Marcia Olivo, Sisterhood of Survivors/Miami Workers Center, and  Kelly Miller, Idaho Coalition Against Sexual & Domestic Violence, on the need to expand VAWA in order to guarantee protections for marginalized communities.

HIV, Violence Against Women, and Criminal Law Interventions – Aziza Ahmed, Associate Professor of Law at Northeastern University School of Law, on HIV/AIDS and the negative consequences of the criminal law approach to sex trafficking.

Art, Violence, and Women – Yxta Maya Murray, Professor at Loyola Law School, on how visual art can inform the feminist legal process.

The Politics of Pretext: VAWA Goes Global – Deborah M. Weissman, Reef C. Ivey II Distinguished Professor of Law, University of North Carolina School of Law, on VAWA International (I-VAWA), Congress’s attempt to expand U.S. influence in the realm of violence against women as a matter of foreign policy.

Building the Knowledge Base: Research Funding through VAWA – Claire M. Renzetti, of the University of Kentucky, Rebecca M. Campbell, of Michigan State University, and Allison Adair, of the University of Kentucky, on the substantial increase in empirical studies of the causes and consequences of violence against women, as well as research on responses to both victims and perpetrators.

Stalled at 20: VAWA, the Criminal Justice System, and the Possibilities of Restorative Justice – Leigh Goodmark, Professor Law at the University of the Maryland Francis King Carey School of Law, on restorative justice and the failure of VAWA to provide abuse survivors with alternative venues for seeking justice.

The Mainstreaming of the Criminalization Critique: Reflections on VAWA 20 Years Later – Mimi E. Kim, Assistant Professor, School of Social Work, California State University, Long Beach, on the troubling collaboration between feminists and the criminal justice system represented by VAWA’s attachment to the Crime Bill of 1994.

A Disappearing Act: The Dwindling Analysis of the Anti-Violence Movement – Kerry Toner on the failure of VAWA to address the complex social phenomenon of domestic violence and the complete experiences of survivors.

VAWA in the Lives of Battered South Asian Women in the United States – Shamita Das Dasgupta, Ph.D., DVS, Manavi, on the experiences of battered South Asian immigrant women under VAWA.

The Gender Justice Movement: The Fullest Expression of the former Battered Women’s Movement, and the Domestic Violence Movement – Tiloma Jayasinghe, J.D., Executive Director, Sakhi for South Asian Women, on the New York City Gender Justice Taskforce and her work leading the Sakhi for South Asian Women, an anti-domestic violence agency.

VAWA and Welfare Reform: Criminalizing the Most Marginalized Women – Ann Cammett, Professor at CUNY School of Law, on how national welfare reform legislation and the rising rate of female incarceration undermined VAWA’s goals for poor women.

Improving Civil Legal Assistance for Ending Gender Violence – Elizabeth L. MacDowell, Associate Professor of Law and Director of the Family Justice Clinic at the William S. Boyd School of Law, University of Nevada Las Vegas, on necessary reforms to VAWA to expand civil remedies for domestic abuse survivors.

Gender Violence and Civil Rights – Julie Goldscheid, Professor, CUNY Law School, on the need for a renewed civil rights initiative in light of Morrison striking down VAWA’s original civil rights remedy.