Last year, New York City announced a lofty goal of 200,000 new affordable units over a decade, and we’re excited to explore the horizon at our NYC Affordable Housing event at the Roosevelt Hotel on Oct. 1. The Hudson Cos has 2,000 of these units in the pipeline, with many in Brooklyn—but three external trends are making it difficult to pursue affordable housing in the borough, says principal Aaron Koffman, a panelist.
The biggest impact is the price of land, whether coming from speculators or longtime owners, even though the city’s term sheets are set up to account for some of these costs, Aaron says. (For instance, he’s seeing costs between $45/SF and $75/SF in East New York.) That financial hit is coupled with the impact of both prevailing and non-prevailing wages on the cost of construction—he’s seen as much as a 20% to 30% increase in wages over the past 18 months. And the city’s building boom across all sectors has spread utility companies thinner; its experts are needed during the engineering, design and installation phases, Aaron says, so it’s significantly impacting affordable housing project timelines and budgets.
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Hudson Cos has been partnering with landowners to help bring down some associated development costs, Aaron says. And given land prices, the firm has its eyes on doing more preservation projects. Hudson is about to close on its first affordable preservation deal, which will recapitalize and extend the regulation period by another 30 years for 212 units in 13 buildings in Brooklyn, mostly Bed-Stuy (a rooftop shot of the neighborhood above). It’s the first of a two-phase transaction with the same nonprofit owner, which will eventually total 550 units in 47 buildings. Hudson will be responsible for capital repairs, fixing roofs, upgrading life safety systems and adding new features to the buildings. “We’re excited about moving more into this field, especially as more buildings are in need of preservation services,” he notes.
Hudson Cos is also diversifying into combining housing types into its affordable projects. In Crown Heights, it’s partnering with a church to build 160 units of affordable housing. Half of the units will be for seniors, 15% will be for residents within 90% of the area median income (AMI) and 35% will be low-income. “It’s quite possibly the wave of the future,” he predicts. “Here, we have three boxes checked on one development, all of which are in critical demand in Crown Heights.” At 280 Cadman Plaza West in Brooklyn Heights, it won an RFP to redevelop the public library and build 139 market rate condo units; as part of the agreement, it will build 114 units of inclusionary housing off-site in Clinton Hill (above), which is currently in land-use review. “It’s a neighborhood in desperate need of affordable housing."
In East New York, Hudson Cos is completing the 287-unit Gateway Elton Phase 3 project (above), which targets residents with 40% to 60% AMI and has 27 units sponsored by the NYS Office of Mental Health. (The entire project will comprise 659 units with 66k SF of retail and community space, with up to 1 million watts of PV solar power installed along Elton Street.) This isn't its first foray into supportive housing; the developer participated in New York/New York III, the city-state initiative to place supportive housing in low-income projects, and hopes to participate in New York/New York IV should it come to fruition, he says. Outside of work, Aaron is an avid cyclist, volunteer and gardener who is always seeking more time to get outdoors with his dog, Scooter. Hear more at our NYC Affordable Housing event starting at 7:30am at the Roosevelt. Sign up here!
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