De Blasio housing strategy faces test in East New York

Mayor Bill de Blasio is eyeing East New York as a frontier for his plan to restore and build 200,000 affordable housing units in 10 years.

The neighborhood has high crime and poverty rates, but also a major transit hub and the room to build taller and denser. City planning director Carl Weisbrod has said he believes it could contribute thousands of low- and middle-income homes toward de Blasio's goal.

De Blasio intends to require developers citywide to include lower-rent units with market-rate ones, making mandatory what Mayor Michael Bloomberg had made optional. Bloomberg began the process of redeveloping East New York two years ago with community meetings -- a dialogue that de Blasio officials said has informed their planning.

The neighborhood will be a "template" for building elsewhere, in part because mandatory inclusionary zoning would "cushion the impact of gentrification" for current neighborhood residents, Weisbrod said.

Some developers, however, are skeptical about industry buy-in, saying the East New York market is too weak to attract builders, let alone support mandatory zoning.

"Right now, the rents don't support the cost of new construction, so you need subsidies to be able to build at all," said Martin Dunn, an affordable housing developer. Mandatory zoning "makes sense" in areas with higher land values because developers can still profit, he said.

Purnima Kapur, executive director of city planning, said the approach will be tailored to each neighborhood. "One size doesn't fit all," she said.

For East New York, officials said they're considering subsidies from a menu that includes city or federal cash, city-backed bond financing and incentives such as tax credits to entice developers.

Longtime residents are welcoming the city-proposed construction, mixed-income developments and infrastructure, but they're still wary of being pushed or priced out.

"Community groups, churches, people are coming together to say, yes, we embrace development, but it has to be for people in the neighborhood who've endured the really hard times," said Michelle Neugebauer, executive director of the nonprofit Cypress Hills Local Development Corp., which has been consulting with the city. Cypress Hills, a northern subsection of East New York, is part of the redevelopment plan.

This fall, a zoning proposal specific to East New York is to be presented to community leaders, and results are due from a study into mandatory affordable housing citywide, planning officials said.

Taller apartment buildings with first-floor retail space may eventually replace the one- or two-stories businesses -- including auto-repair shops and fast-food restaurants -- after the zoning changes, Kapur said.

De Blasio seeks to include homes for extremely-low-income and middle-income families -- two bookend segments of the affordable housing spectrum that Bloomberg overlooked, she said. Mixed-income development that entices new residents with more disposable income is essential to improving services and amenities for current residents, she said.

"When you are a community that is only low-income people, it is not a community that is attractive to retailers," Kapur said. "They cannot sustain themselves."

De Blasio's citywide initiative has called for apartments for household incomes ranging from less than $25,150 to as much as $138,435 and with rents ranging from less than $629 to as much as $3,461.

The typical East New York resident falls on the lower end of that scale. Nearly half of households there make less than $25,000 annually, according to a city planning report released last month.