A workforce housing plan hashed out between the Kingston mayor Steve Noble and Aker Companies, owner of the 267-unit Stony Run apartment complex, went over like a lead balloon at the Kingston Common Council meeting on March 7.
The mayor’s plan, already approved by the Laws and Rules Committee, would have converted all units in the housing complex from market rate into workforce housing. It failed by a single vote.
The terminology is important. Workforce housing and affordable housing are two different concepts.
According to an announcement released by the mayor on February 17, all new rents in the complex going forward would be capped at 20 percent above the Average Median Income (AMI), or $82, 828 a year. It would be a well-compensated workforce indeed that could afford $2,733 a month for a three bedroom.
Affordable housing is commonly understood to be a rental rate or mortgage which eats up no more than a third of one’s income. Using United States Census data, the AMI for a Kingston resident would be a maximum of $1618 a month to be considered affordable.
That is a lower-middle-class definition of affordable. For many Kingston residents, $1618 a month would account for much more than a third of their income.
Mayor Noble asserts that a ceiling of 120 percent of the local AMI qualifies as affordable.
“Workforce is housing that is affordable for those earning between 80 percent and 120 percent of area median income (AMI),” says Noble. “This agreement ensures that Stony Run does not turn into market rate/luxury housing for the next 40 years.”
All Stony Run tenants currently enjoy rent stabilization protections conferred by the Emergency Tenant Protection Act (ETPA). The agreement reached by the mayor extends those protections for 40 years to current tenants and family members.
“This regulatory agreement would protect affordable housing at Stony Run if ETPA were to end,” says Noble. “In the event that Kingston was no longer in a housing emergency, with the regulatory agreement, Stony Run would remain workforce housing for the next 40 years, ensuring that this does not turn into market rate/luxury housing.”
The announced agreement does not mention those benefits applying to new tenants.
Stark differences of opinion
Alder Rennie Scott-Childress introduced legislation to revisit the issue of housing vacancy every three years. The housing emergency declaration would expire if rental vacancy were shown to be five percent or above, as measured by the tri-annual housing survey. This commitment by the council to triannual review is the only law of its kind adopted in any municipality which has declared a housing emergency
Members of the tenants union at Stony Run attended the council meeting to disparage what they called a back-door agreement reached without their input. Particular ire was reserved for a statement released by the mayor, which they said falsely claimed that their union supported the plan.
Speaker after speaker, outraged, disappointed, sarcastic and/or sincere, said their piece before a group of about 40 spectators. Their overwhelming sentiment was that the mayor’s agreement, known as Resolution 58, should be sent back to the Laws and Rules Committee in order to buy time for the tenants to go over the agreement with lawyers.
Several speakers emphasized that they were making their own decisions independently of coaching from For the Many, an activist group engaged for the last couple of years in pitched battles throughout the Hudson Valley wherever progressive housing policies and the hearts and minds of the public intersect.
“It’s not unusual [that] tenants wanted to make their self-autonomy clear to the common council before they voted,” noted Aaron Narraph Fernando, communications lead of For the Many. “The tenants’ union makes decisions separately from us. For the Many only advises and provides support as requested by tenants.”
An undercurrent in the speakers’ comments dealt with a perceived betrayal by Barbara Hill, alder for the ward where the Stony Run complex is located. Hill was quoted in the mayor’s announcement as saying. “The tenants union at Stony Run are very pleased with the progress they have made to create a more cohesive and interactive relationship with the owners over the past few months.”
“I personally, and also the residents of Stony Run — we feel disenfranchised from this whole process, “ said Eric Jarmon, “It is a shock that our own alderperson actually agreed to this resolution without even consulting us.”
Resolution 58
After the public-speaking portion of the event finished, city business took solemn precedence, an interesting ritual to watch while the spectators in the room were waiting on the edge of their seats. And the council members knew it.
Lined up widthwise, their backs to the vast room, all nine alders sat at their desks with the green glass bankers lamps lighting their paperwork while each resolution was introduced for their consideration.
Because the numbered resolutions are introduced consecutively, the arrival of Resolution 58 was predictable the suspense built. Hearts beat faster, palms grew sweaty, spectators yawned in anxiety, fingers tapped, people sighed.
It was like buying a ticket to watch a rocket launch and then sitting in the stands listening to the countdown before blastoff.
When the big number came up, the momentum of the evening splintered into bureaucratic gridlock. Ward 4 alder Rita Worthington called for the rules to be suspended and language inserted into the resolution to more clearly reflect the intent of the council. Ward 3 alder Rennie Scott-Childress urged speedy passage. Ward 9 alder Michelle Hirsch wanted to send the resolution back to the Laws and Rules Committee entirely.
With the beginning of the speeches, the positions of the individual alders became clearer.
“For the City of Kingston broadly, it will make a real dent in our affordable-housing crisis,” said alder Carl Frankel. “In short, the risk of delaying, even for two weeks outweighs the risk of doing it now. I wish this wasn’t the actual situation, but these are the facts on the ground as I understand them.”
Frankel paused, becoming aware of hostile murmurs from the public.
“Feel free to laugh and scoff all you want,” offered Frankel. “Check the facts. Find out more, and I think you’ll agree with me.”
While Scott-Childress pushed for passage, he noted problems with the way the agreement had been put together. “I think this needs to be a test of the mayor’s supposed promises of transparency,” he said. “When he ran for mayor last time he claimed he was going to have a transparent government. We have seen numerous instances where this has not been the case, and this is one of them.”
Alders Barbara Hill and Steve Schabot expressed support for the mayor’s deal. But it was not to be. Alders Hirsch, Worthington, Davis, Muhammad and Olivieri voted to send the measure back to the Laws and Rules Committee, which will meet on the Ides of March. The next full council meeting will be held on April 4.
After the meeting, Ward 1 alder Barbara Hill did speak on the record, addressing the claims of her betrayal.
“It’s been a very challenging two weeks for me. The Daily Freeman printed that I had said that the tenants of Stony Run were in support of the agreement,” said Hill, “which I had never said. It took me days to correct it. They hadn’t interviewed me. They surmised it from a discussion in Laws and Rules. Theresa, who is on the [Stony Run] organizing committee, provided a letter of support, which I had read, in motion.”
Alder Hill said that she had provided the mayor with a quote in which she expressed that the agreement seemed to her like a win-win.
“I love these people,” said Hill. “This is heartbreaking for me. Yes, they were not included in discussions. I wasn’t. The aldermen weren’t. So it’s unfortunate that engagement didn’t happen. But I think it’s a good agreement.”
Why the rush?
Why had there been such a rush to push the resolution through? Scott-Childress pointed out that the building owners of Stony Run found themselves in a difficult position in regard to loans.
“I believe Aker has said the issues stems from the loss of a construction loan they have depended on to make improvements for the property,” he said. “By turning this into a workforce housing property, they will qualify for HUD-backed loans, so that further improvements can continue to be made.
“The ETPA requirements have put the Aker owners in a bind. They’re trying to raise loans that will allow them to continue with the redevelopment of the project,” he continued. “That’s why you got 120 percent AMI in there, because that amount allows them to borrow what they need to go forward. And then the other thing is, they are in technical default at this moment on some of their loans. They could get a citation any time now, and then they would only have 15 days in which to cure that citation. If they can’t get the loans, that puts them in a very difficult place.”
And that seems to be why some of the alders spoke in terms of missing out on a great opportunity or of fear that the owners would simply sell the property and move on to greener pastures. Higher-than-usual turnover among the building owners is of some concern.
The current owner, Aker Companies, purchased the Stony Run apartment complex on December 31 2020, for a reported $38 million. Just 18 months previously, the buildings had been sold for $13.3 million.
With the resolution kicked back to committee, the pressures facing the building owner were unclear.
Words and deeds
A man pointed out as an actual owner of Stony Run, who was there in the city hall in the flesh, did not wish to be interviewed. He seemed despondent at the outcome and shook his head. “What’s the point?” he asked.
The Aker Companies are headquartered at 20 Kent Street in Beacon, Both its principals, Will Brocker and Mike Amato, live in Beacon. Both have MBAs from The Wharton School and have previously worked at prestigious investment firms.
The Aker Companies website shows activity in Hudson Valley sites but includes glossy stock photos from many other states, likely indicating a broader scope of ambition. “We focus on the cities in between the big cities,” says the Aker website about its business strategy. “The urban communities that sit at the edge of outdoor recreation.” Aker claims to be inspired by trends toward work-from-anywhere, a renewed passion for the outdoors, and a desire for human connectivity.
The website encourages potential investors to contact Aker.
Having purchased four substantial Ulster County properties two years ago – Stony Run and Kingston Village Apartments (in the Rondout) in Kingston and Lakeshore Villas and Black Creek Apartments in Esopus — Aker promised substantial investment to revive them. Aker was the epitome of long-term investors, Brocker and Amato said, in it for the long haul. They were operators as well as investors.
Two years later, Aker’s words are being measured against their deeds. They are not the first landlords to have to tell their tenants that further improvements await their obtaining an expected loan. Nor will they be the last.
Investors are interested in the likely return on their capital. Prior to investing, they examine the track records of operators, and all things being equal pick the ones with the highest returns. That simple fact can cause high-minded but ambitious operators to delay improvements in order temporarily to boost their bottom lines.
And their tenants wait. Or protest.
— Geddy Sveikauskas contributed to the last section of this story.
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