Kingstonian Developers Fight Affordable Set-Aside

Ed.Note: In October 2019, the developers agreed to add 14 units with rents considered affordable for people earning between 60-110% AMI.

July 30, 2019

Kingston, NY – From long-standing problem cities such as Los Angeles to newer hot spots such as Brooklyn’s Bushwick, gentrification, displacement and homelessness are on everyone’s radar. The same holds true in the mid-Hudson Valley, including the city of Kingston.

The solution, obviously, is to build more affordable housing. With interest rates at a 500-year low and excess cash sloshing around in a post-QE world, this shouldn’t be a problem. But affordable housing construction in the United States has declined thanks to free market socio-economic policies that gained bipartisan favor.

In Kingston, the shortage is acute. A 2009 study entitled the “Three County Regional Assessment” predicted that by 2020 Kingston would need an extra 2,328 rental units, roughly half of them affordable. And a 2017 study by Hudson Valley Patterns for Progress showed that in Ulster County there is a $652 gap between monthly rent and monthly income.

It is against this backdrop that plans to build 129 market rate apartments at the Kingstonian have sparked outrage among Kingston’s community groups over the developers’ refusal to include even one affordable unit.

In the hour leading up to an April 10 hearing on the Kingstonian, activist groups — Kingston Tenants Union, Rise Up Kingston, Citizen Action of New York Hudson Valley Chapter, KingstonCitizens.org, Nobody Leaves Mid-Hudson, Kingston Midtown Rising and Mid-Hudson Valley DSA — demonstrated on the lawn at City Hall, shouting housing slogans through bullhorns.

Groups supporting the inclusion of affordable units have the law on their side.

Cognitive Dissonance: Kingston Code vs. Kingston Politicians.

The Kingstonian would be built in the Mixed Use Overlay District, which encompasses much of Uptown, and whose zoning is described in §405-27.1 of Kingston code. That section mentions the words “affordable housing” 22 times and calls for 20% of units to be dedicated to affordable housing – but this applies only to the reuse of commercial and industrial buildings into more than five apartments.

However, the code also calls for “mixed use, mixed income, walkable neighborhoods.”

Mixed use implies housing, and mixed income implies at least some affordable housing in new projects, right?

Not so fast.

Team Kingstonian and their allies in city government have turned the argument on its head, taking the position that since Uptown already contains a high number of affordable apartments, the mixed-income requirement is satisfied, and therefore exclusively market rate developments comport with the law. The other justification for market rate projects is that the code only seeks to “encourage” mixed income neighborhoods but does not “require” them.

Rennie Scott-Childress, Common Council Majority Leader and Ward 3 Alderman, explained this line of thinking during a May 10 interview at City Hall with Hillary Harvey for Kingston Radio.

“We already have a fair amount of affordable housing Uptown,” he said, such as The Stuyvesant, across the street from the proposed site, and apartments managed by local not-for-profits Gateway and Family of Woodstock.

To solve the affordable housing shortage, he said some advocates “want to have x percentage of every new development to have affordable housing in it. That’s a perfectly reputable way to do it, but we don’t know if it’s the best way to do it.”

Instead, he suggested that zoning be changed in single family home areas to allow for greater density.

The Kingstonian’s supporters say the project would ease the housing crunch by adding supply. However, scholarly studies, as well as recent history, show that the supply-demand curve simply doesn’t work for goods and services of unequal value.

It was not clear if Scott-Childress was implying that Kingston’s Uptown has a higher concentration of affordable units than the Midtown or Rondout neighborhoods. A RUPCO official said he knew of no studies, completed or underway, with such statistics. Affordable housing complexes that were built mid-century are located in Midtown and the Rondout, and the Lace Mill and Energy Square are in Midtown, making it unlikely that Uptown has the highest concentration of affordable apartments in Kingston.

Moreover, the Uptown Stockade area has become ground zero for an influx of real estate investment of late, with one prime commercial property owner confiding that his building has gone up six-fold in value in as many years. Dinner for two with a bottle of wine at the recently opened Kinsley hotel will set you back around $130, not including tip.

If promoting equity is the goal – “social equity” is mentioned seven times in the Kingston’s recently passed Comprehensive Plan 2025 — then the rapidly gentrifying Stockade District is precisely the neighborhood that ought to require an affordable carve-out for new construction.

The Comprehensive Plan, which carries the force of law and is supposed to inform the zoning code, doubles down on the zoning code’s affordability requirement. It notes, “Currently, affordable housing is only required for projects taking advantage of the mixed-use overlay district provisions” and suggests that an affordable housing requirement be expanded throughout the city.

In New York State, zoning codes are supposed to comport with the comprehensive plan.

The word “affordable” is used 14 times in conjunction with housing or rentals in the Comprehensive Plan. And the two words “affordable housing” are mentioned a whopping 99 times in the latest Community Development Block Grant Consolidated Strategy and Plan.

Say What? 

It was not immediately clear how Kingston managed to secure a $10 million grant, of which $3.8 million is earmarked for the exclusively high end Kingstonian, from a program that touts housing diversity as one of its goals. According to promotional literature, the Downtown Revitalization Initiative gives preference to “magnets for … diverse housing.”

Moreover, Kingston’s March 2018 DRI Plan acknowledges “affordable housing requirements” in the Stockade District and pledges to “ … Provide Additional Affordable Housing Opportunities” and “to determine best strategies for enhancing the supply of affordable housing.” The Kingston DRI plan mentions affordable housing or affordability 14 times.

Even more curious, in the August 7, 2018 press release announcing the award, New York State’s Home and Community Renewal commissioner RuthAnne Visnauskas praised the combination of DRI and HCR funding to create affordable housing. “Through governor Cuomo’s Downtown Revitalization Initiative, these community-led, targeted investments will combine with HCR’s $591 million investment in the Mid-Hudson Valley over the last seven years that has created affordable housing for about 20,000 residents to help ensure that as Kingston’s economy grows, all New Yorkers have the opportunity to take part. In New York State, we are lucky to have a governor who understands how to build inclusive, long-term economic success.”

Darren Scott, Upstate East Director of Development at HCR, would not confirm that he had been involved in talks with the developers during the DRI process to help them obtain funding for affordable units. However, he said he was in talks with several groups at present. He declined to elaborate.

Local Committee as Window Dressing

One Kingston resident tapped to provide input on how to allocate the grant money said questions about affordable housing were brushed aside.

Micah Blumenthal was part of a local committee that was supposed to represent community opinion on how the $10 million DRI grant was to be spent.

Appearing on Hillary Harvey’s Kingston Radio show The Source on May 24, Blumenthal said an affordability carve-out was “important to many of us,” but they were told the grant money could only be spent on public amenities, not private, and therefore the Kingstonian’s $3.8 million would go toward the parking garage and promenade, not the housing.

When people on the committee asked about an affordable component, “the pushback was, that’s not determined and that’s not actually what you’re here to determine,” he said.

“I had always been told about the Kingstonian project that it would include some percentage of affordable housing. And as the project has moved along, now it somehow doesn’t any more.” (For more on the gamed DRI handouts, see )

Planning Board Turns Blind Eye to Public Comment on Affordability

At the June 3 meeting on the Kingstonian, the Planning Board discussed studies underway, recommendations from involved state agencies, and a letter from Kingston’s Transition group asking for environmentally friendly construction. (See Physical Properties sidebar.) There was no mention of Kingston’s code or affordable housing, even though they were perhaps the number one topic of public comment, both written and spoken.

Asked why the Planning Board failed to address the MUOD requirements for affordable housing, Chairman Wayne Platte replied, “No comment.”

Fact check: Various claims about affordable housing.  

The claim: Building more housing will increase supply, and Economics 101 supply demand curves show that this will ease the housing shortage.

Yeah, but: This shibboleth has been disproved time and again, both in studies and a quick look at the reality around us. Take any U.S. city, and the evidence is overwhelming that when market rate construction comes in, the pre-existing population is displaced — even when they’re living in adjoining areas. It works this way: the higher value of the new market rate housing increases the perceived value of the neighborhood, which fuels turnover of nearby real estate to well-heeled investors, who in turn empty the buildings for rehabbing, or raise rents and evict tenants who cannot pay. Presidential candidate Elizabeth Warren notes that banks are eager to lend to developers, because it’s straightforward to seize a building in the event of a default. That eagerness lends itself to asset inflation, strengthening a cycle that is either vicious or virtuous, depending on your point of view.

The claim: Kingston has little to no new market rate housing, whereas the affordable housing not-for-profit RUPCO recently built the Lace Mill, home to 55 artists and their families, and has another 57 affordable units under construction in Midtown’s net-zero Energy Square. To even things out, Kingston needs market rate construction.

Yeah, but: If even ten percent of the Kingstonian’s planned 129 or 131 apartments were allocated to affordable units, that still would leave 117 new market rate apartments, more than the 112 affordable units at the Lace Mill and Energy Square combined.

The claim: One elected official, speaking off the record, said local people will upscale into the Kingstonian, thereby vacating lower priced rental units, i.e. freeing up more affordable housing. In general, this is a supply-demand argument, but this official specifically said local people will vacate local units, leaving local vacant housing with lower rents for locals.

Yeah, but: Developer Joe Bonura Jr. said the idea was to attract new residents to Kingston. In that case, the vacated housing will be too far away to count.

Bonura has also said his project will attract an educated workforce.

In this video recorded on Jan. 22, Bonura told Kingston’s Planning Board, “You need to attract the people to live here that meet the criteria to bring new businesses in.” No analysis was immediately available on whether Kingston’s workforce is truly as uneducated as Bonura seems to think, or how the new apartments would bring business in its wake. Even if the new tenants somehow induced businesses to set up shop in Kingston — please, someone, anyone, feel free to prove this point; usually it’s the other way around, with businesses attracting workers — would they be able to afford commercial rents? As it stands now, storefronts remain empty on Wall Street with asking prices upwards of $9,000 a month. Rather than putting the cart before the horse, perhaps local and state government would do better to expend energy on creating organic economic growth that produces true goods and services.

Bonura’s other target market is empty nesters wishing to downsize. If local empty nesters sell their homes, will those homes magically become affordable housing, or are they more likely to be snapped up by investors who will raise rents to justify a high mortgage/purchase price?

The claim: When separate entrances are built for affordable housing customers, the effects of segregation are even worse. (Asked why he/she opposed an affordable carve-out at the Kingstonian, one Common Council member actually trotted out this objection. It was in private conversation, not for attribution, so the person will remain unidentified.)

Yeah, but: That’s easy. Don’t build separate entrances.

This was the subject of a lawsuit in New York City, where ritzy buildings on the West Side Highway were found to segregate affordable renters by forcing them into a separate side entrance. The “poor doors” were banned, but not before comics had a field day.

In addition, the point of affordability IS to integrate various economic levels. Not only does it make for fewer entrance construction costs, it also makes for less segregation. A win-win all around.

Conclusion:

In light of calls for affordable housing in the Comprehensive Plan, the CDBG housing report, Kingston’s DRI application and the DRI promotional literature, plus public comment — a community character issue that if not addressed could be a violation of SEQRA’s “hard look” requirement — it seems that in refusing to consider an affordable set-aside the developers and local officials are hanging their case on a loophole too tenuous to withstand scrutiny and one that in any event clearly violates the spirit of the law and the will of the community.

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