By ELIOT BROWN
The promise of more than 4,000 units of low- and middle-income housing was a significant selling point for two of the city’s largest new developments, Atlantic Yards in Brooklyn and Willets Point in Queens.
Today, they are moving forward, but the housing pieces have been pushed back for years behind other portions of the multibillion-dollar projects, as the boom-era visions are proving to be difficult to see through in a slowly recovering economy.
In recent weeks, the Bloomberg administration reached a tentative deal with the Related Cos. and Sterling Equities to redevelop a large industrial swath of land at Willets Point, in a plan that now calls for housing to be built as a third step with a groundbreaking by 2025, according to people familiar with the matter. The companies would first spend years building a hotel, and a large retail center in the area before moving on to constructing the housing in an unproven and polluted site near Citi Field.
At Atlantic Yards, the project’s centerpiece basketball arena is nearing completion. But developer Forest City Ratner Cos. has yet to begin any of the 6,400 units of housing it once anticipated being built by 2016—2,250 of which would be for low- and middle-income families. Forest City has cited higher than expected costs and an inclement market, although it plans to break ground this year on its first building with 175 below-market rate units.
The delays have frustrated officials and given fuel to critics of the project, which went through a contested public approval process before the recession.
“They should do the affordable housing up front, now,” said Assemblyman James Brennan of Brooklyn, who said the low- and middle-income housing aspects should be accelerated. “The only legitimate selling point for the entire project was the affordable housing.”
The delays speak to broader challenges of building housing that is affordable to low- and moderate-income families in New York, once the main focus of Mayor Michael Bloomberg’s housing agenda.
In 2005, Mr. Bloomberg called for building about 92,000 units of so-called affordable housing and preserving 73,000 units in which affordability programs were expiring.
But the city has shifted to preserving units—a tactic many housing advocates say is also needed. New construction is now likely to be roughly one-third of that total of 165,000 affordable units, said Mathew Wambua, the city’s housing commissioner.
The pivot comes as preservation is less expensive and housing development throughout the city has lagged, in large part because of a sluggish economy. The city has also seen specific complications at some of the larger developments with large levels of low-income housing.
“It’s a function of the market,” Mr. Wambua said. Still, he said the city still is putting considerable resources toward affordable development. “New construction is an inextricable part of our agenda—and it’s something that we continue to be committed to,” he said.
At Atlantic Yards and Willets Point, the challenges highlight a reality of large-scale real estate development in New York: The big projects rarely get developed as planned.
A report by the nonprofit Regional Plan Association released this month found that most large-scale projects over the past half-century “had several false starts and went through multiple plans before development was approved and construction started.”
To be sure, other large developments are proceeding, such as Hunter’s Point South, a project with more than 900 middle-income apartments on the waterfront near Long Island City. Developers have built more low-income housing than expected on Manhattan’s far West Side, which was rezoned in 2005.
But at Willets Point, the city has struggled with a challenging site in need of tens of millions of dollars to clean up lots currently used largely by auto repair shops. The developers told city officials they believed housing wouldn’t work until the site was more established as a destination, and they first plan to build a nearby hotel and a more than one million square-foot retail center, people familiar with the plans said.
At Atlantic Yards, the large number of affordable units—more than one-third—helped Forest City Ratner sell the project to elected officials and some community groups.
“That is of course what we’re committed to doing at Atlantic Yards,” MaryAnne Gilmartin, executive vice president at Forest City Ratner, said in an interview. “But it turns out not to be so easy.”
The company plans to break ground on its first building before the end of the year, a date that has been pushed repeatedly. If the company doesn’t start construction by May 2013, it must pay the city $5 million.
Unlike many low- and moderate-income housing developments, Atlantic Yards plans to use union labor, is being built in high rises, and has hundreds of millions of dollars in costs to acquire land, all of which make the development more expensive and challenging, Ms. Gilmartin said.
“We’re really trying to do something that isn’t something that’s been done on a large scale in the city before,” she said.
Write to Eliot Brown at [email protected]
A version of this article appeared May 29, 2012, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: Housing Pieces Delayed.
