Rich Door - Poor Door - Middle Door?

By
Real Estate Agent with Compass
https://activerain.com/droplet/4zLK

You've heard the media and political brou·ha-ha about “rich door, poor door.” 

 40 Riverside Boulevard AKA 470 West 62nd Street

 

55 newly constructed affordable housing rental units (20%) monthly rents from $833 - $1082 located at 470 West 62nd Street (so-called poor door) - 219 luxury condominium units overlooking the Hudson (80%) priced from $3M to $25 Million located at 40 Riverside Boulevard (rich door)

 

470 West 62nd Street40 Riverside BoulevardSo-called "Poor Door" - 470 West 62nd Street                                                                          So-called "Rich Door" - 40 Riverside Boulevard

 

New York city and state give out tax incentives to developers in exchange for building affordable housing units, parks even subways stations.

 

The 421A-tax-abatement bestows property tax breaks for up to 25 years on new multifamily buildings.  It was put in place in the 1970s to spur development. The idea was that developers received a tax abatement passed on to owners in new developments in exchange the developers gave back to the city by building a public space and/or affordable housing units.

 

To be eligible for 421-A in prime Manhattan neighborhoods, developers had to include affordable housing, at least 20%. The 80/20 model has been used by developers primarily on rental buildings for decades.  In 2007 421-A was amended. Developers could no longer build affordable housing in outer boroughs but had to build in same community as the luxury building.

 

The inclusionary housing mandates that the affordable units be in a separate building, in the same community or they can be clustered in what the city calls a building “segment,” which then has to have a separate entrance. A common practice in New York, and in my opinion a non-issue. 

 

The way to get affordable units built now, in quantity, for low- and middle-income families is by inducing the private market to supply it. And that means cutting tax deals with developers. The rich may get richer, but the poor will get apartments.

 

Brou-ha-ha, politics and every New Yorkers opinion aside, as a transparent public service, for those that actually need affordable housing and qualify for newly constructed affordable housing rental units, I'm posting the application for 55 units at 470 West 62nd Street (so-called "poor door.")

 

Applications due April 20, 2015. Good luck.

55 units at 470 West 62nd Street

The definition of Affordable housing in NYC by the Area Median Income (AMI) as follows:
 

The New York AMI is approximately $60,0000


Extremely Low Income (0-30% of AMI) 
Very Low Income (31-50% of AMI) 
Low Income (51-80% of AMI)
Moderate Income (81-120% of AMI) 
Middle Income (121-165% of AMI)
 

 

I'm an advocate for affordable housing and have extensive experience successfully representing sellers and buyers of affordable housing. Primarily as an HDFC coop and HDC Condo expert specialist, a little known market niche. I've successfully represented sellers and buyers with moderate and middle incomes acheive their housing dreams. 

 

A 2009 study by the Center for an Urban Future looked at the strain that housing costs were putting on middle class New Yorkers and argued that it was imperative for New York City to maintain a strong middle class.

 

We need affordable housing for the firefighters, the police officers, teachers, nurses, — people who start small businesses, which employ many New Yorkers the people who might not be at the lowest income levels but are still priced out of the market.

 

I would like to see more "affordable housing" for middle and moderate New Yorkers. Call it a "Middle Door."

 

In 2015 there will be many new residential developments including "luxury" and " affordable luxury" both ground-up construction and the conversion of existing structures for qualified buyers looking for luxury new developments.

 

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Rainmaker
845,955
Marco Giancola
Beachfront Realty - Miami Beach, FL
Realtor (305)608-1922, Miami Beach Florida

Good morning Mitchell, I read about this some time ago and it really stood out. It is great for the affordable group but to me the stigma attached to the "poor door/rich door" building would keep me away from buying there.

Mar 14, 2015 08:49 PM #1
Rainmaker
2,346,102
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

Actually, I think I hate the terms rich door/poor door, but a very interesting post.

Mar 14, 2015 09:45 PM #2
Rainmaker
596,551
Mitchell J Hall
Compass - Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Good morning Marco, 

In my opinion the only stigma attached to "poor/rich door"was created by politicians and NY Post. They claim moral high ground rather than living in economic diverse communities. NIMBY. Only private developers through tax incentives can build affordable housing in the most desirable parts of town.

Affordable housing is a very complex issue and has little to do with the front doors.

Mar 14, 2015 10:05 PM #3
Rainmaker
596,551
Mitchell J Hall
Compass - Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Roger, The term was coined by the NY Post. The Madame Defarge of NYC.

BTW: The owner of the NY Post Rupert Murdoch is a billionaire. He recently purchased a $58 million penthouse that has a separate private "ultra rich" elevator that segregates the "ultra rich" from the "ordinary rich."

Economic segregation. Segregated owner vs renter. It's not new except now thanks to the NY Post and local politicians who believe what they read in the NY Post have decided affordable housing must also be ultra luxury housing.

Mar 14, 2015 10:10 PM #4
Rainmaker
3,490,785
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Mitchell. I never really understood this but your post clears up much of the confusion. Middle door appeals to me too.

Mar 14, 2015 10:31 PM #5
Rainmaker
4,796,419
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

You are going to be overwhelmed with applications for this building, Mitchell.  How will you choose the tenants?

Mar 14, 2015 10:42 PM #6
Rainmaker
596,551
Mitchell J Hall
Compass - Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Hi Sheila, the fact is there is no need for separate entrances in most Manhattan buildings because the main entrance is only for rich people and the typical Manhattan neighborhood, increasingly is only for reach people. 

In my opinion affordable housing is needed for the middle class.

 

Mar 14, 2015 10:43 PM #7
Rainmaker
596,551
Mitchell J Hall
Compass - Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Gabe, I don't have anything to do with picking the lucky tenants. It's through a lottery managed by NYC and developer/landlord. No brokers.

I posted it as a public service since there has been a lot of media coverage and a lot of opinions about so-called "poor door" but no mention how to qualify and apply for one of the 55 coveted apartments. So I did, in an effort to help inform those who need an affordable apartment.

I can sell the luxury condos though.

Mar 14, 2015 10:50 PM #8
Ambassador
3,671,830
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Mitch, I wouldn't mind using the "Poor Door" to live in that building.  What happens if you income goes up?

Mar 20, 2015 01:23 PM #9
Ambassador
3,671,830
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Gabe, If Mitch chose the tenants, I hope he'd choose me!  I could move back to Manhattan! 

Mar 20, 2015 01:25 PM #10
Rainmaker
596,551
Mitchell J Hall
Compass - Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Pat, I actually prefer the poor door because in my opinion it's more convenient having an entrance on West 62nd Street. Easier to get to transportation and shopping  -  it's closer to West End Avenue.  The front entrance on Riverside Boulevard is direcly opposite the Hudson River and the West Side Highway. 

Great question about what happens if income goes up. Their incomes will be verified prior to renewing lease in affordable rental housing.

However, when you purchase "affordable housing" such as an HDFC coop or HDC condo income is only verified during the purchasing process. Once you close your income can double and triple, you can become a millionaire. The only restriction is when you re-sell you need to sell to a buyer that meets the income eligibility requirement.

Mar 21, 2015 12:31 AM #11
Rainer
508,670
S. Leanne Paynter ☼ Broward County, FL
United Realty Group, Inc. - Davie, FL
Davie, Plantation, Cooper City & Weston Specialist

Mitch, back when I was growing up in Fort Lee (70's & 80's), I recall regularly hearing something on the news about NYC's rent control issues.  The largest cities are always going to have issues.  I recently heard about a NYC landlord that figured out how to push the long-time tenant out by converting the 1st floor to commercial space (or something along those lines) so that the building is not considered residential anymore.  I wonder if NYC will close that loophole.  I think Chicago has some of those "segment" types you mentioned but I don't think they have to use a separate entrance.

Apr 08, 2015 02:35 AM #12
Rainmaker
596,551
Mitchell J Hall
Compass - Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Hi Leanne,

This isn't about rent control. That's another issue altogether. This is an 80/20. It's for brand new buildings. Builders of luxury buildings and their purchaser's get a 25 year tax abatement if builder builds 20% of building "affordable" In order to get one of the 20% "affordable" apartments you need to fit the low income requirement plus win a lottery. 

Apr 08, 2015 11:58 PM #13
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Rainmaker
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Mitchell J Hall

Lic Associate RE Broker - Manhattan & Brooklyn
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