Real Estate

In a Supertall Tower, How Much Affordable Housing Is Enough?

More than 20 years after the Sept. 11 attacks, a 900-foot apartment tower could soon rise at the World Trade Center, making it the first and only residential project to be built on the 16-acre campus.

The 80-story project at 130 Liberty Street, a publicly owned property known as Site 5, would include 1,200 apartments — of which 25 percent, or 300 units, would be permanently rented at below-market value — as well as office, retail and community space. A team led by the developers Brookfield Properties and Silverstein Properties could begin construction in 2023, if approvals are met.

But a group of local residents and elected officials, frustrated by the dearth of affordable housing citywide, is pushing for more — a tower that could become the world’s tallest 100-percent-affordable housing project and a symbol of equity for the workers and families who rebuilt Lower Manhattan, even as they have been priced out of their homes. (The group hopes to include a tenant preference for 9/11 survivors and essential workers.)

It is an ideological battle being waged on one of the few sites in the city where these questions could seriously be posed: Can the city build sky-high towers for lower- and middle-income New Yorkers, when “supertall” — a term used to describe buildings just shy of 1,000 feet — has become synonymous with luxury condominiums? And would the political and symbolic significance of the site make it worth the expense, although three or four times as many affordable units could likely be built elsewhere for the same cost?

Supporters of the current plan, a 1.56 million-square-foot, glass-and-masonry tower designed by Kohn Pedersen Fox Associates, say it will create more affordable housing on a single site than has been built in Lower Manhattan in years. In fact, according to the Department of Housing Preservation and Development, since 2014 the city has financed 300 new affordable units in the district that includes the World Trade Center — the same number that will be included in the new tower and reserved for renters making up to 50 percent of the area median income, or about $53,000 annually for a family of three.

The opposition faces long odds. No fully affordable housing project has come close to being 900 feet tall, because of the steep construction and labor costs associated with skyscrapers, and those obstacles are only heightened at the World Trade Center, one of the most expensive places to build in the city, because of governmental oversight and other restrictions. But a recent surge of support from local and state politicians could influence the project, just as new sources of government funding may become available.

Mariama James, left, and Jill Goodkind, advocates for a fully affordable residential tower at the World Trade Center, in front of the future project. They are also pushing to include a tenant preference for 9/11 survivors and essential workers.  Credit…Katherine Marks for The New York Times

“The timing is like by divine design,” said Mariama James, a founder of the Coalition for a 100% Affordable 5WTC, formed in the spring. “The 20-year anniversary, the housing crisis, the pandemic — it’s like the perfect recipe for something like this to finally be achieved.”

Ms. James, 50, has lived near the World Trade Site since 1971, when her father, an Air Force veteran, bought a publicly subsidized apartment in a 27-story building in Southbridge Towers, then part of the middle-income Mitchell-Lama housing program. Her father died of 9/11-related illness in May, she said, and she, her mother and her children suffer from the lingering health effects of exposure to the pollutants released after the attacks.

“After 9/11 a lot of us, in a way, became activists,” said Jill Goodkind, 63, a member of the coalition and a 32-year resident of Gateway Plaza, where two-bedroom apartments can rent for as much as $6,245 a month. “This is a moment in time, an inflection point where something truly good could happen, from one of the most awful events in our country’s history.”

The Hunters Point South Commons development in Long Island City, built in 2015, is a below-market-rate apartment complex that peaks at 404 feet, less than half the height of the proposed tower at the World Trade Center.Credit…Courtesy of Related Companies

Could It Be Done?

There is some precedent for building tall, below-market-rate housing, and it could be done again, said Moses Gates, the vice president for housing and neighborhood planning at the Regional Plan Association, a nonprofit planning group not involved with the project.

“Everything can pencil out, with enough subsidy,” Mr. Gates said, referring to the need for additional government funding. “The question is, at what point does it become not a good investment anymore?”

The closest precedent — perhaps the tallest affordable housing project in the world — is the Pinnacle@Duxton, a 1,848-unit public housing complex built in 2009 in Singapore, said Daniel Safarik, the assistant director of research at the Council on Tall Buildings and Urban Habitat, a nonprofit that tracks high-rise construction. It peaked at 538 feet.

In New York, the closest model may be a 404-foot tower at Hunters Point South Commons, in Long Island City, built in 2015 by a joint venture including the developer Related. While it is part of a 925-unit, income-restricted apartment complex, the building has a wide income range: from 40 to 230 percent of the area median income, or about $43,000 to $247,000 for a family of three, according to the Department of Housing Preservation and Development. And it is less than half the height of the proposed World Trade Center tower.

And neither of those projects had to navigate the complexities of the World Trade Center site.

The Pinnacle@Duxton, in Singapore, is the tallest public housing complex in the world, at 538 feet, according to the Council on Tall Buildings and Urban Habitat, a nonprofit that tracks high-rise construction.Credit…Reuters

The developers of the World Trade Center tower said in a statement that, to increase the number of below-market-rate apartments to 1,200 from 300, they would need at least an additional $500 million, which would likely come from a shared pool of government funding. With that money, they said, the state could subsidize approximately four times as many units — 3,600, rather than 900 — in a less expensive market, with less costly development.

“The construction costs for 900-foot towers are exorbitant and only going up,” said Alicia Glen, a former deputy mayor of housing and economic development, and a board member of the Lower Manhattan Development Corporation, which owns the site and supports the current project. “This project already has very deep affordability in it, so I don’t think that’s on the table,” she said about making the tower 100 percent affordable.

How exorbitant are those costs? Holly Leicht, the board chair of the Lower Manhattan Development Corporation, estimated that, as currently planned, each unit in the tower will cost about $1 million to build, or twice as much as a unit in a typical affordable project, an estimate that developers not involved with the project agreed was plausible.

Not all of that money is going to fancy finishes. Other reasons for the wide cost disparity have to do with the construction method: Most affordable buildings are no taller than 12 to 15 stories, the maximum height for block-and-plank construction, a simpler way to build that doesn’t require tower cranes or more costly foundation work, said Mark Ginsberg, a partner at Curtis + Ginsberg Architects, which has designed several affordable residential buildings but is not involved in the project. A building this tall would also likely require a union work force, because of the specialized work and regulations at this site, and that could drive up overall construction costs by 20 to 40 percent, Mr. Ginsberg said.

There are also complicated stakeholder considerations. In 2004, the Lower Manhattan Development Corporation, a subsidiary of the state-controlled agency Empire State Development, bought the property, which includes the site of the former Deutsche Bank building damaged in the terror attacks; the building was demolished in 2011, four years after a massive fire there killed two firefighters. In 2006, the L.M.D.C. agreed to a land swap with the Port Authority of New York and New Jersey that made way for the construction of the 9/11 Memorial & Museum and a performing arts center. Through a long-term lease that was part of that deal, proceeds from the development of the site will go to the Port Authority, which is counting on the funds for various projects.

What Comes Next?

There may be a mix of financing mechanisms that could shore up funding for a more affordable, if not fully below-market-rate tower, said Carol Lamberg, the former executive director of the nonprofit Settlement Housing Fund.

One option could be Project-Based Section 8, a renewable federal subsidy typically for those making less than 50 percent of the area median income, although that would likely apply only to some tenants. Another approach could involve tax-exempt bonds, including 501(c)(3) bonds, a rarely used financing tool, Ms. Lamberg said, or a new allocation of so-called Liberty Bonds, similar to the billions spent mostly on commercial development around World Trade Center. Or there could be a program to siphon excess revenue from the land lease at nearby Battery Park City. Some of these proposals could use public funding that would not be available to other affordable housing projects, she said.

There may also be ways to drive down the cost of the project through redesign, said Todd Fine, a member of the coalition, although some financial details, including the size of the payments to the Port Authority, have not been disclosed.

Some of these proposals, however, are contingent on a robust federal housing investment surviving in the final version of the Build Back Better plan now stuck in Congress.

There is value to building affordable housing in high-rent neighborhoods, said Jolie A. Milstein, the chief executive and president of the New York State Association for Affordable Housing. But given the costs of construction and the complicated negotiations involved, she said, subsidizing additional affordable units there might not be the best use of limited resources.

Still, the push for more affordable housing in the tower has found support from a number of elected officials, including Councilmen Ben Kallos and Mark Levine; New York State Senator Brian P. Kavanagh; United States Representatives Carolyn B. Maloney and Jerrold Nadler; and Assemblywoman Yuh-Line Niou.

But the most important endorsement would come from Kathy Hochul, New York’s new governor, who has broad influence over the government agencies that own the site. Hazel Crampton-Hays, the governor’s press secretary, said in a statement that “Governor Hochul is committed to continuing to take bold action to protect tenants and help solve the housing affordability crisis — not just in one neighborhood or one building, but across the state, and we are monitoring the development of this project in that context.”

One way or another, the approval process is likely to take at least another year, in part because the site was originally slated for a commercial tower, and residential use will require a change to the General Project Plan for Lower Manhattan established after the attacks. There is also the possibility that a protracted fight over the tower could push the Lower Manhattan Development Corporation to return to a commercial plan that wouldn’t require additional approvals.

But Ms. James, of the Coalition for a 100% Affordable 5WTC, isn’t deterred.

“I leave my apartment and look at empty buildings every day,” she said, noting the glut of commercial and luxury residential property surrounding her. “We can fill a building, if it’s affordable.”

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