Susi Yu on Affordable Housing: Innovation Is In Our DNA
Forest City Ratner EVP Susi Yu’s spearheaded some of the biggest affordable housing projects in NYC, with another 1,200 units in the pipeline. But how can affordable housing make both dollars—and sense? Susi and other experts will be hashing out the topic on Oct. 1 at Bisnow's NYC Affordable Housing Summit. Until then, here’s an exclusive pre-event Q&A with Susi Yu.
Bisnow: What got you interested in real estate?
Susi: I practiced architecture for 10 years initially. I studied architecture in undergrad and then I came to New York. I’ve always wanted to come to New York, that was sort of my "City of Dreams." As soon as I graduated, I came to New York and started working. For the last six years of my architectural profession, I worked for Robert A.M. Stern and did a lot of different projects, but mainly residential. I started working for a developer on a project and really liked the business aspect of development. So I went to Columbia University [for the master's in real estate]. I knew I wanted to do development—nothing else—and I was hired as an intern by MaryAnne Gilmartin, my current CEO, while I was at Columbia.
Forest City Ratner Co was really the first pioneer developer in Brooklyn, other than Two Trees.
Bisnow: Can you tell me a little bit about working at Forest City?
Susi: I have to tell you, it’s amazing being in an industry that’s dominated by men, and I go to work every day at Forest City Ratner Co, where my CEO is a woman who hired me, and who is not a relative of the chairman of the board. A lot of the key executives all across the different departments, they’re all women at high level and I think it speaks to Bruce’s ethos and MaryAnne’s ethos on giving opportunity to the best, those who strive the hardest no matter what the race, creed or ethnicity is—just the fact that I am a Korean-American immigrant with an architectural background who has been given the opportunity.
Bisnow: That must mean Forest City has a diverse pool of workers. Does that sense of innovation carry over to your projects?
Susi: If it’s not hard, if it’s not difficult, we won’t do it. It’s sort of in our DNA. Bruce is an innovator in how he looks at projects. We’re long-term holders and we look at projects in terms of how it transforms the city. [Like] Pacific Park, the next eight- to 10-year build-out, with such an amazing level of affordability. Pacific Park has 35% affordability blended across 40% to 160% AMI. I would say the city sort of caught up to it because we’re the first ones who did 30% affordability. And that’s where the new wave of entitlements that you see that’s occurring, that’s even in the mandatory inclusionary zoning and in the 421a legislation, where they’re upping the affordability to 25, 27, 30%.
Bisnow: What’s it like to be developing in Brooklyn?
Susi: I started on Pacific Park back in 2003 when Bruce started really envisioning what it could be. The world’s perception of Brooklyn is definitely not what it is now. We still had to convince people to come over the bridge, that Brooklyn was going to be the next desirable neighborhood, that it’s going to be the next "It" thing 12, 13 years ago. Now, I have to say that Brooklyn has really come into its own in the last five to seven years.
Bisnow: Can you tell us what it’s like working on a huge development like Pacific Park?
Susi: After we opened the Barclays Center, we decided that we needed to bring in a partner to go forward with the rest of the project. What’s interesting about Pacific Park is we’ve been doing work for about 10 years but it’s all been below grade; what people don’t see in order to prepare for what’s going on above that in Phase 2 when we finish all the yard work. In 2013, we went out and decided to look for a partner to bring into the project and we negotiated a 70/30 joint venture with Greenland USA, who is the largest developer in China, who were looking to invest in the US. They’re 70% owner, we’re 30% owner, but we manage the day-to-day activity of developing the project jointly.
We broke ground on two 100% affordable projects, each about 300 units. We also broke ground on a 100% market rate condominium. You know when you’re doing 6,430 units of housing, you have to do some affordable and some market rates to calibrate your return, because the reality of it is affordable housing is not a high investment. Right now, we have over 1,200 units under construction, over 780 of those units will be affordable.
550 Vanderbilt's superstructure is already up to the seventh floor and the two 100% affordable buildings will start going vertical in two months so it's unbelievably exciting, and we have three projects in the design phase.
Bisnow: I heard there’s a 2025 deadline?
Susi: We’re hoping that it’s really an eight-year timeline, but we’ll see. If we have another financial crisis, you just don’t know. If you can’t get a loan to go vertical then you can’t build your building. But we’re very bullish and we want to build as quickly as possible.
Bisnow: What do you think is the importance and the impact of Pacific Park on the community around it?
Susi: The site where Pacific Park is has long been, I would say, a gash in the neighborhood. I actually used to live in Prospect Heights and the rail yard on Atlantic Ave was a great divide between Prospect Heights and Fort Greene. It was like a physical barrier. Once Pacific Park is built, I do think it is going to knit Fort Greene to Prospect Heights as well as Park Slope and to Clinton Hill. I think the eight acres of open space are going to be an incredible public amenity. Brooklyn is all about trees and openness, parks and playgrounds.
We really think that eight acres of open space that we’re designing with Thomas Balsley is more like Millennium Park in Chicago, where we’re going to have a lot of activation that’s part of the park that sort of recognizes the fact that urban dwellers use open space and parks in a different way than it was designed in the 18th century.
And we’re building a public school at the base of one of the buildings. So we’re working with the School Construction Authority to build a 600-plus-seat public school. When you’re building 6,430 units of housing you know there’s going to be families, so one of the infrastructures that you’re going to have to create is to address the need for school.
Also we have 250k SF of retail, and we really do think that retail is going to be resident-based smaller retail. Brooklyn has such amazing food and art. I do think that as a master plan, the project has been carefully thought of.
Bisnow: What sort of challenges did you face with planning out Pacific Park?
Susi: It was a project that was in its incubation stage for a long time. I do think all of that is behind us and what we face is trying to build as quickly as possible, and also build the type of development that embraces the aesthetic of Brooklyn because I think building in Brooklyn is very different than building in Manhattan. So we can’t land a glass tower in Brooklyn in such a strong brownstone neighborhood. We’re very cognizant of building buildings that fit the aesthetic that really does exist in Brooklyn.
Bisnow: What is the most important thing about affordable housing that you think people should know?
Susi: I think that workforce housing has not really been created in the last 20 years in the city and I think the administration’s shift to create a more diverse income band in the mandatory and inclusionary 421a is the right step. Having a mixed-income with market rate is really important for the socioeconomic diversity of New York City. It’ll make the city a much more vibrant and richer place to live.
Bisnow: I’ve been reading that there is a shortage and an affordable housing crisis. Do you agree?
Susi: Absolutely. I keep reading about this oversupply of residential product in Brooklyn and in Manhattan. I think you would have to produce more than 100,000 units per year for the next 10 years to even put a dent in the housing crisis.
Bisnow: What are your goals for the future of Forest City?
Susi: I’m hoping that we could do something not as big as Pacific Park, but the type of project that changes the city and really enhances the environment that we’re living in. I think it’s a goal that I share with MaryAnne and Bruce, where we do projects that change the city that we live in for the better.
I think Brooklyn is so amazing. Like I said, being sensitive to what’s here already aesthetically and bringing the right product on is really important. As a Brooklyn resident, I’m very cognizant about that.
Learn more about the Pacific Park development and affordable housing in New York on Thursday, Oct. 1, at Bisnow’s NYC Affordable Housing event. Sign up here.