Why Is the City Allowing Luxury Condos on Public Land in Crown Heights?

Earlier this week, Slate Property Group backed out of a deal that would transform the Bedford-Union Armory in Crown Heights into a mix of affordable and market-rate housing, retail space, and a recreation center. City Hall had essentially pushed the developer out of the project after it was revealed that Slate misled city officials in its pursuit to turn a nursing home on the Lower East Side into luxury condos. Now, the developer’s exit has led many community activists to revisit their initial complaint about the redevelopment of the city-owned property: Why was this luxury housing developer involved in the project in the first place? And why isn’t a residential development built on city-owned land made up of 100 percent, desperately needed affordable housing?

The armory project included a total of 300 apartments, half of which were supposed to be affordable. Several townhouses that Slate and its partner, BFC, would add to the structure would be market rate as well, and Slate would also receive the profit from the retail spaces. “I feel that we will be getting all that we asked for,” councilmember Laurie Cumbo said when the parameters were announced last December.

But immediately following the news that Slate had dropped out, New York Communities for Change launched a petition addressed to the city’s Department of Housing Preservation and Development to try to get the city to change course on the project and make the armory 100 percent affordable.

“The city should be working with not-for-profit developers to turn the Bedford-Union Armory into apartments that are 100% affordable for local Crown Heights residents, and low-income New Yorkers,” the petition reads.

So far the de Blasio administration has shown very little interest in doing business with not-for-profit developers. Instead, it has handed out city land to for-profit developers, who almost always pair affordable housing with high numbers of market-rate units, the kind that often drive area rents up and essentially perpetuate the problem that the affordable housing is trying to combat.

“City-owned land is extremely limited in New York City,” Benjamin Dulchin, the executive director of Association for Neighborhood and Housing Development, told the Voice. “The truth is for those types of projects you don’t need a private developer to make these projects happen. The city often likes to work with private developers, because, well, we don’t know why. From Bloomberg on there’s been this knee-jerk decision that private developers should be a mainstay of the city’s housing program.”

Dulchin points out that when it comes to financing affordable housing projects, all developers fund construction through the same low-cost public financing anyway.

“A site like this, the city totally controls the land and the terms, so it’s all about maximizing the public benefit. Honestly, I can’t think of what a private developer brings to the table that would be more meaningful that a not-for-profit one,” Dulchin said.

One reason why the city would hand prime real estate to a luxury housing developer is the quasi-city agency in charge of handling the project, the NYC Economic Development Corporation. The NYCEDC, a not-for-profit organization that handles several of the city’s more entrepreneurial projects, has a board that’s stacked with veterans of New York City’s real estate sector, and since expanding its role during the Bloomberg administration, has wielded an outsize amount of influence on the redevelopment of several city-owned properties. Not-for-profit developers simply didn’t have a shot.

BFC, the remaining developer on the armory project, has decided to go ahead alone. New York Communities for Change is not encouraged by their record. In their petition, they note while “BFC purports to be an ‘affordable’ housing developer” they believe the company has fueled gentrification “at every turn.”

Austin Finan, a spokesperson for City Hall, gave the Voice this statement: “The RFP was open to both for- and non-profit developers. The developers were chosen because they presented the best overall plan that delivered what the community called for, including affordable housing and community recreational space.”