Brooklyn Luxury Housing Paved With Taxpayers’ Gold

Protesters at Avalon Fort Greene, which got $22 million in tax breaks.“Built from the ground up to surpass any expectations of what rental living should be,” the “Bklyn Gold” building Web site advertises. The cheapest studio apartments available are $2,100 a month, and two-bedrooms go for around $3,500.

In the last decade, luxury development has transformed the stretch of downtown Brooklyn along Flatbush Avenue by the Manhattan Bridge into a forest of pricey high-rises the real-estate industry has dubbed “DoBro.” Much of this development was publicly subsidized through the 421(a) tax-abatement program, says “Luxuriou$ Loophole: How Developer$ Use Taxpayer$ to $ubsidize Housing for the Rich,” a report released Apr. 3 by the Real Affordability for All Campaign. 

Bklyn Gold, at 277 Gold St., was “built from the ground up” with more than $8.8 million in 421(a) tax breaks—and not one of its 268 units is remotely affordable for most New Yorkers. Down the block, the 372-unit building at 235 Gold St. got $12.6 million in tax breaks. Across Tillary Street to the south, 306 Gold St. got $13.9 million for its 303 units, and the 42-story, 631-unit Avalon Fort Greene at 343 Gold St. got more than $22 million. None of the apartments in those buildings are affordable either; the Avalon’s studios start at $2,660, and two-bedroom units surpass $4,000. 

“This is heavily subsidized housing even though the units are only affordable to wealthiest residents of the city,” the report says. 

In the area surrounding downtown Brooklyn, from Dumbo to Prospect Heights and Park Slope, there were 61 buildings constructed from 2008 to 2012 that are slated to receive $158 million in 421(a) tax breaks, according to information the Real Affordability for All Campaign acquired from the Department of Buildings’ Web site. Less than 6 percent of the 4,395 apartments in them are below market rate, and only about 30 rent for less than $1,000 a month. 

This development has dramatically gentrified the area, the report added: Its median income jumped from $53,000 to $86,000 a year between 2000 and 2011, and its white population increased more than 20 percent, while the number of black and Latino residents fell by a similar proportion. 

On April 3, about 100 people turned out for a protest organized by Real Affordability for All, an umbrella group of housing and community organizations that includes Met Council, New York Communities for Change, Make the Road New York, VOCAL NY, Families United for Racial and Economic Equality, and the Fifth Avenue Committee. About 20 construction workers from Local 79 of the Laborers Union joined, as much development in the area is being built with nonunion labor.

“This was my home and now I can’t afford to live here,” Local 79 member LeCarl Ellison, who grew up in nearby Fort Greene, told the crowd as they assembled in front of the Avalon Fort Greene building. “All these buildings are being put up nonunion, and we still can’t afford it.”

Keisha Jacobs of the Crown Heights Tenants Union called the combination of gentrification and nonunion construction a “double whammy—they take away your housing and then they take away your job.” 

Under heavy police guard, the protesters snaked under the scaffolds of buildings under construction on Flatbush Avenue; looped around Gold Street, where a few tried to slip into Bklyn Gold; crossed the foot of the Manhattan Bridge—where some briefly blocked traffic—and concluded at the former Jehovah’s Witnesses “Watchtower” complex in Dumbo, which was sold last year for $240 million. 

“Because developers receiving the 421a tax abatement are not required to provide any substantial affordable housing in exchange for the subsidy, many of these developments, while generating ‘new housing units’ for the marketplace, do not generate new affordable housing units,” the report said. 

Only five of the 61 buildings it covered included below-market-rate units, and four of them received other government subsidies. The 421(a) law was changed in 2008 to require buildings getting 25-year tax abatements to include “affordable” apartments, the report said, but developers in the area either took 15-year abatements, which don’t carry that requirement, or got their permits in before the change went into effect. 

With Mayor Bill de Blasio preparing an affordable-housing program set to be released May 1, Real Affordability for All recommends that it require that at least half the apartments in tax-subsidized new buildings be affordable. In higher-cost areas, particularly Manhattan, half could be reserved for low-income households; by the current definition, those with incomes ranging from $24,000 to $48,000 for a family of four. In the outer boroughs and upper Manhattan, it urged, all apartments would be affordable, split 50-50 between low-income households and those making up to around $80,000. 

This, the report said, could “achieve a much greater level of real affordability across the city” than former mayor Michael Bloomberg’s policies did, and it would also “give city taxpayers a much better return on their investment” while “still enabling real-estate developers to reap significant profits.”  

“No more words, no more promises,” Leandra Requena of Make the Road New York told the crowd in Spanish as the march concluded. The city’s current policy of loose requirements for developers to include affordable housing and a definition of “affordable” well above what most New Yorkers earn, she said afterwards, “is not reality.” Even if the minimum wage were raised to $10 an hour, “it’s never enough.”