39 Apartments Planned For State Street

"New Haven is facing an affordable housing crisis," Downtown resident Johnny Shively said. "There's a dire need for families making less than 60 percent of the area median income to be able to afford housing. I personally consider any development that doesn't explicitly include below market-rate housing to be irresponsible in our neighborhood." What steps does the public have to voice concerns with this project? he asked.

It is frustrating when seemingly well intentioned people act in ways that have the opposite effect of what they claim to espouse. Why is any development that does not include below market rate housing irresponsible?

John, imagine this simplified scenario. There are 1,000 apartments in the city, and 1,100 people who need apartments. The 1,000 people who can afford apartments get housing while 100 go homeless. If 50 new units are built, then 1,050 people get apartments while only 50 are homeless. If you don't allow the construction then 100 people remain homeless. By encouraging ANY type of construction, development and additional unit count everyone wins. Yes, more units are available for wealthier people, but more units are available for poor people as well. Insisting on punishing market rate renters doesn't harm them much as they can afford to rent the highest tier of apartments. The people who end up getting hurt by refusal to allow construction are the people at the bottom for whom there are otherwise not units.

By preventing development, you are preventing housing for the poor. The rich can afford to live regardless. In fact, by constraining the supply, you displace more poor people.


"I'm a little confused," management team chair Caroline Smith said. How can MOD claim that its rents are competitive, even affordable, if this project does not include a dedicated set-aside for low-income tenants?"

A project does not have to have a dedicated set-aside for it to have rents that are affordable. I am interested in understanding the confusion.

This is good for New Haven and Downtown. More people living in the area and supporting area businesses, and it adds to the housing stock without displacing anyone. Let's make sure the property is properly appraised once it's up and running.

Dennis Serfilippi

Wooster Square resident Elsie Chapman asked Muccilli if the developers plan to include any kind of set-aside of affordable apartments for lower-income tenants.Muccilli said So no affordable set-aside? Chapman followed up.No, Muccilli replied.

In the words of the actor Laurence Fishburne
THERE IT IS.
https://youtu.be/FjheHtlVf7A

I told you all down town will be take over by the gentrification vampires.I have been trying to warn you all for years.But you all say.Threefifths,You are a trouble Maker,Stop it with the gentrification vampires.No body is going to be push out.Sorry to say a lot of you will be gone. New Haven is in the 4 Phases of Gentrification.

Phase 1 – Pioneering
New residents move in to abandoned or under-maintained buildings.
Banks will not lend so renovation is limited to the resources of the Pioneers.
No displacement of original residents, yet.

Phase 2 – Potential is Seen
Real estate agents promote the area's "potential." Vacancy rates drop.
Rents begin to rise. Banks begin to lend. Speculators buy distressed buildings.

Phase 3 – Safety and Media Hype
Gentrifiers create historic preservation, business and neighborhood associations.
Rents increase dramatically and displacement of the original residents fuels tensions.
Police adopt "broken windows" tactics and selectively enforce loitering and similar laws.
Media attention promotes the new safety and changes in the neighborhood.

Phase 4 – Peak
The first wave of Pioneers gets priced out.
Banks and investors create more high priced apartments and condos.
Buildings bought for speculation in Phase 2 get put back on the market.

Phase 5 – Post Peak
Vacancy rates increase as rents push above the limit.
Speculators take the money they made in Phase 4 and look for new opportunities in neighboring communities.
Landlords are absentee, including large banks and institutional investors.
Property values stagnate or fall from their peaks.

I cant' help but think that these "affordability" people are being paid to go to meetings because their statements don't help New Haven at all and definitely don't help create "affordable" living spaces for people.

It's fascinating to listen to all the do-gooders talk about building affordable housing, dedicating apartments on a small project to affordability - basically, low income families. But not one of them suggests there's any way to pay for it. Sources tell me there is zero state money and no local money to pay for affordable apartments. How are you going to pay for it?

Not every project has to cater to the low income crowd. If people want; they can rent a room in their homes to a low income family and see how that goes. Why aren't they crowding into town meetings in suburbia to demand low/moderate income housing? I am not in favor of saturating downtown with low /mod income folks .

In the long-term, sure, it could eventually lead to increase in affordable housing by driving prices down a bit.

But what about in the meantime? Those who can't afford the rent increases now?

Since there are many students, postdocs, and other Yale-affiliated folks in town who don't need permanent housing and will leave in a few years, how about building smaller-scale apartments with the bare essentials so that permanent residents have more housing opportunities at cheaper price?

@DwightandHowe

In the meantime the people you mentioned aren't hurt by new construction. They would, on the other hand, be hurt by the failure to do new construction if the people who would have moved into a new building instead move to Starr Street or Day Street because there isn't sufficient housing downtown.

We are all (not just real estate developers) responsible for housing the people you mentioned. Those whose income simply will not pay for a habitable, safe, code-compliant unit (the baseline rent) ought to be entitled to rental assistance -- just like food stamps and Medicaid -- paid for by our state and federal tax dollars. Everyone else ought to benefit from abundant supply facilitated by the removal of unnecessary regulatory requirements, particularly exclusionary zoning in our region's well-resourced high-income suburbs.

@CityYankee

While I disagree with your characterization of "saturating downtown" I do think it's really important to ask the question you ask: "Why aren't they crowding into town meetings in suburbia to demand low/moderate income housing?"

The affordability crisis has been caused by government leaders who are constraining housing supply, by prohibiting or delaying construction, requiring zoning reviews, charging too much for building permits, and requiring parking spaces. When there are 10,000 more people who need housing but only 2,000 new units built, as has happened recently in New Haven, you see skyrocketing prices. (Many management team and government leaders are small-time landlords so you can't fault them with wanting to see this continue to happen).

It's ironic that residents who want affordable rents would want to delay a project like this by trying to require them to put in more parking spaces (making people pay for homes for cars instead of homes for people) and/or refusing to allow them to put in apartments on the first floor.

I work in a building owned by MOD and it's a complete dump. As in - unreliable heating and A/C, windows that are so old they fall down from the top, no soap in ladies room for three weeks, restrooms not up to code and not accessible for people with disabilities, all sorts of mice and cockroaches, questionable security at front desk. They never fix things and the work is sloppy when they try. If this building is sold I hope it goes to a more responsible owner.

The thing that stands out to me is the giveaway of publicly owned property - presumably the parking supply controlled by the authority is finite. I don't hear that they are somehow acquiring more land, or building more parking. Generally I hear about how garages are too expensive to maintain, etc..

While I'm sure someone next will post a nonsense comment contradicting what I'm saying on the basis of semantics, the bottom line is that - Its too soon in the development of that area to give away the finite number of parking spaces.

How the re-development of that corridor, which is just starting, goes will be determining of many things, and to give away public goods or even to sell them is not proper at this stage. It would frankly be better to just RELEASE them from the parking requirement and see how that goes, than to encumber or permanently dispose of a public asset.

With SO MUCH CHANGE on the way, hold that public asset powder dry, folks. My two cents.

People like to talk about low income housing in the suburbs. Well, the battle has started in East Haven where a developer is trying to change zoning up off of Foxen Rd to gain the right to build up to 500 units, including low income units. all the folks running for mayor and most of the other politicians have come out against the zoning change. A vocal % of the public is against the project as well for all the same old reasons. i would suggest that all the activists in favor of low income housing get involved in the battle of East Haven for a higher chance of success.

Hmmm. "Not interested in saturating downtown with low/mod income folks". Pray tell who should saturate downtown? This is nothing more than a way to continually violate the federal housing discrimination policy. No one says "you can't live here". Instead make the rents and mortgages so high certain people simply can't afford to live there.Some things change while others remain the same. Another thing, I suggest we stop supporting greedy land owners with city and state grants and there might be a lot more money to support affordable housing for the needy.

Caroline affordable is a relative term. To some this project is an affordable alternative to other locations or projects in town.

That said, MOD is not a developer. They are a NYC based RE Investment firm.

If approved this will just sit vacant like the Harolds building.....

brownetowne - Great insight. If anyone thinks this through, the only winners when new housing is blocked are those who are already landlords in town. It would not surprise me at all if those landlords are 'incenting' folks to come to these meetings and ask questions about 'affordable' housing.

Noteworthy - Spot on. Someone has to pay if rents are going to be artificially held below market value. Unfortunately, the concept of providing benefits without any idea of how to pay for them is popular at the local, state, and federal levels.

manofthepeople - thank you for the demo. Anyone who has taken a basic economics class or been in any type of business realizes that prices go up when supply is constrained and prices go down when supply is increased. Many need to be reminded in these cases.

This building is in good shape but apparently cant sustain commercial renters. So, do we let them build affordable market rate apartments or deny it and let the building fall into disrepair. I don't see a lot of people clamoring to buy property so they can build below market rate apartments. I didn't hear anyone at the meeting jump up and offer to step up to the plate.
Don't let this property fall apart.

If the Feldmans are looking to build what current zoning allows as-of-right, then the City cannot/should not demand an affordable housing set aside.

If the Feldmans want something more than current zoning allows, such as variances or density enchancements, then the City should negotiate an affordable housing set aside in return for allowing something more than zoning allows.

Property owners should look to maximize their real estate. The City should not give away zoning enhancements without some benefit to the community. Yes, a renovated property will pay more in real estate taxes, which will help the City. But, that's not enough for significant zoning bonuses.

manofthepeople,

Do you have any evidence to back up this claim? Boston, Brooklyn, and Oakland seem to prove that costs increase for everyone, and people who can't afford to live in the city they were raised in have to kick rocks. Would love to see an unbiased study that supports your theory with real life examples. Otherwise, the theory is as invalid as trickle down economics.

tmctague, you may be interested in this research review:

"building more supply may be the only effective way to reduce the pressure that is driving up rents and producing displacement."

"affordable housing advocates acknowledge more supply matters"

"Building more market rate housing isn't so much about "trickle down" as it is building enough new housing to keep higher income households from moving down-market and bidding up the price of older housing that would otherwise be affordable to moderate and lower income households."

http://cityobservatory.org/the-end-of-the-housing-supply-debate-maybe/

Which means that blocking or slowing new housing supply, like some people quoted here seem to want to do, is the most effective way to keep driving up housing costs for working people and ensure continued gentrification.

Perhaps they are small-time landlords and want prices to keep going up by a significant amount every year? Or in the case of a group like legal aid, perhaps their board members and donors are lawyers who have a self-interest in delaying stuff and seeing more frequent lawsuits?

In case you missed it: "building more supply may be the ONLY EFFECTIVE WAY to reduce the pressure that is driving up rents and producing displacement." The federal and state governments are not adding billions of dollars to their housing budgets at the moment, in fact, they are cutting subsidies.

@tmctague and manofthepeople:

MOTP oversimplifies but is generally correct. The process is caused filtering. Units don't filter one-for-one (in other words, even over the long haul one additional unit of luxury housing does not result in one unit of affordable housing) but filtering does occur. Here's a link to a recent study:

https://www.dropbox.com/s/zuzxvupdbqcvhql/Mast Luxury Housing.pdf?dl=0

The author tracks where occupants of new luxury housing lived before they moved to that luxury housing (and then who moved into the units they vacated and so and so forth) in order to ascertain housing market effects of new construction. He summarized his research at a recent panel at the Minneapolis Fed, video and Powerpoint available here: https://www.minneapolisfed.org/institute/conference-series/fall-2019-institute-conference

Perhaps more importantly, people who live in new luxury units don't go homeless if those new units aren't built. They live somewhere. And when they compete on the open market with low-income people, guess what, wealthier people win. That's what causes gentrification -- filtering in the wrong direction. Just as low-income people sometimes come to occupy housing that used to be occupied by wealthy people, when supply is tight, the opposite happens. That's gentrification: wealthy people buying housing in poor neighborhoods and displacing poor people -- you may have heard it referred to as "brownstoning" or "Brooklynification." What's worse than building lots of new market rate housing downtown? NOT building lots of new housing downtown.

And in fact Boston, Brooklyn, and Oakland prove that brownstoning and gentrification happen when you don't build new market rate housing. The rate of new market rate construction in those jurisdictions pales in comparison to the growth in the number of households (all three places are experiencing both population growth and decrease in household size leading to significant increase in number of households).

Rents in East Rock are as high as they are because taxes are what they are. Will taxes go down for landlords when there are more developed properties paying taxes? I can't afford to lower my rents because of my $14,000. annual tax bill.

M Short, you're not wrong on the semantics, you're wrong on the facts. As the article states, the developer would lease spaces from the Parking Authority, i.e., pay money for them. Clearly, the deal would need to be reviewed to make sure it makes sense. But this is not a giveaway.

OutofTown, it's a bit more complicated than that. Using the upper floors for residences is allowed as of right but putting residences on the ground floor requires a special permit. The requirements for obtaining a special permit are easier than for getting a variance. But for either type of authorization, the city cannot require the provision of affordable housing as a quid pro quo. The Board of Alders could amend the zoning ordinance to require affordable housing. But unless and until it does, the city cannot condition the approval of the project on the developer providing affordable housing.

Manofthepeople and Dennis Serf I am right with you It's classic supply and demand that determines rent prices. The more supply, the less demand, this overall rent prices go down. The only thing I would like to see Remson is the ground floor retail That is needed to activate the street.

Budman, ground floor retail is great when it works, but having store fronts be empty for very long periods of time benefits no one. Brick and mortar retail is breathing slowly across the country due to the rise of e-commerce and other factors. There are numerous store fronts in New Haven, in both existing and new buildings, that have been empty for years. Most of the retail space on Audubon Street has been empty for the last 25 years. Same thing for the retail space at The Novella since its opening. The Corsair was supposed to have a retail space in its ground floor on Mechanic Street. The developer converted the space to apartments when it couldn't find a tenant. The owner of the English Building is going to face competition from the retail spaces being built in the new Audubon Square complex a couple of blocks away.

@Kevin McCarthy

Agreed. Its always more complicated. In other developments, the City allowed a density of 11 FAR when zoning stated 6 as-of-right. That's an extreme example but there are many others when the City gave away too much for to too little in return. The City should be pro-business, as that's good for the City as a whole (more jobs, higher grand list, rejuvenated neighborhoods). But, it should also realize the value of the zoning enhancements requested and obtain something reasonable from the property owners in return.