Elected officials and housing advocates say Extell exploiting loophole with separate building entrances
Extell Development is facing a new round of criticism after its plan to include a separate entrance for low-income residents at its Upper West Side development project was approved by the city's Deptartment of Housing Preservation and Development.
Extell is building a 219-unit luxury condo building at 40 Riverside Boulevard. The project includes an additional 55 units of affordable housing that the company agreed to in exchange for tax abatements from the city.
It's outrageous that we give huge tax credits to developers for including affordable apartments in their buildings ? only to allow them to turn around and segregate entrances or block access to amenities for low-income tenants. I am profoundly disappointed that the developer of 40 Riverside has exploited this loophole in creating a 'poor door' in its building. We must do everything we can to end this discriminatory practice immediately."
Councilmember Mark Levine
Housing advocates and elected officials have likened the practice to segregation and claim separate entrances have a stigmatizing effect on low-income residents. That criticism was amplified after Extell founder Gary Barnett told WNYC radio that the separate entrance was necessary to comply with city zoning laws. He further drew the ire of activists and officials when he said drawing attention to the issue was political and silly.
"The two entrances is mandated actually in inclusionary housing, because that's permanently affordable and so they want to be able to - I think that's the logic behind it, I don't know for sure - they want to be able to manage it as a separate building," Barnett told WNYC. "We're in the political silly season, to be blunt. Would you rather not have the affordable housing? Ask any one of the thousands of people who are applying for that, and they don't give a damn [about the separate entrance]. They want to have a beautiful apartment, in a beautiful neighborhood, at a super price."
Officials quickly returned fire, claiming Extell and other companies are exploiting a loophole that was created when the state's 421-a tax abatement program was modified and the city's related Inclusionary Housing Program failed to keep pace.
The state requires developers who wish to take advantage of the tax breaks to include the affordable housing on site. The city requires those same developers to intersperse the affordable units with the market-rate units at a certain rate on every floor of their project. However, due to an oversight in the city's Inclusionary Housing Program ? which officials claim is a loophole - developers are allowed to put the affordable units in a separate building on the same site, which requires a separate entrance according to city code.
"Unfortunately the Inclusionary Housing Program currently allows for developers to build what are called 'segmented buildings,' freeing them of these distribution requirements," said Manhattan Borough President Gale Brewer. "To do this, developers essentially use the option of creating the affordable housing off-site, but place that 'off-site' housing on the same zoning lot."
Brewer called for immediate changes to the city's Inclusionary Housing Program, "to stop developers from segregating and segmenting buildings, separating affordable and market rate units, creating separate and unequal communities of tenants within a single building."
A spokesperson for Extell Development said there's a legitimate reason that zoning code allows companies to construct separate buildings for affordable units.
We're in the political silly season, to be blunt. Would you rather not have the affordable housing? Ask any one of the thousands of people who are applying for that, and they don't give a damn [about the separate entrance]. They want to have a beautiful apartment, in a beautiful neighborhood, at a super price."
Extell founder Gary Barnett
"The amendment was written by HPD and the City Planning Commission into the zoning code in 2009 and was scarcely a loophole or ambiguity of the law," said George Arzt. "Rather it was aimed at creating additional units of affordable housing on parcels too small to construct two buildings. It received final approval by the city council."
Because all of the affordable units at 40 Riverside Blvd. are contained in the separate building, the rationalization that a separate
building was built in this case for "additional units" of affordable housing to be built on a smaller parcel of land doesn't seem to apply.
Arzt did not respond to a request to elaborate.
According to Brewer, developers say banks won't finance market-rate development projects with affordable units sprinkled on every floor. But she claims other developers have told her that strict segregation of affordable units is not required for a project to receive financing.
"The assertion of some developers that they have no choice in the matter, that they are required to have poor doors in their buildings, is plainly false," said Brewer. "The law only requires a poor-door system if the developer chooses to segregate their residents."
Other elected officials have piled on, including City Councilman Mark Levine, who, along with Councilman Corey Johnson, is drafting legislation that would prevent development and management companies from excluding affordable housing tenants from amenities such as fitness centers and roof gardens.
According to Levine's office, 40 Riverside Boulevard will have a basketball court, fitness center and other amenities that will be off limits to tenants in the affordable units. As recently reported in the West Side Spirit and elsewhere, several buildings on the Upper West Side bar affordable housing and rent regulated tenants from using amenities.
"It's outrageous that we give huge tax credits to developers for including affordable apartments in their buildings ? only to allow them to turn around and segregate entrances or block access to amenities for low-income tenants," said Levine. "I am profoundly disappointed that the developer of 40 Riverside has exploited this loophole in creating a 'poor door' in its building. We must do everything we can to end this discriminatory practice immediately."
New York's Deputy Mayor Alicia Glen told WNYC that the administration is already looking to close the loophole that allows a separate building for affordable units, but that it could take up to a year or more.