The Community Growth Corporation, Jesse M. Keenan, MAS Summit 2014

As part of its research for the Uneven Growth project, SITU worked with Jesse Keenan of the Center for Urban Real Estate (CURE.) to propose an ownership and development model focused on capturing the value of unused air rights in the service of funding affordable housing.  In addition to working closely with Jesse, the Furman Center’s guidance and work on Transferable Development Rights was an essential component of this research.  This post focuses on SITU’s strategy for unlocking development rights as one approach to addressing the affordability crisis in New York on a localized level.  The CGC proposes a scenario where underutilized urban spaces could be opened up to a new type of incremental growth facilitated through neighborhood based organizations called Community Growth Corporations. In the below video, Jesse Keenan explains the principles and mechanics of the CGC at this year’s annual Municipal Art Society Summit.

 

CGC1. Redistribution of FAR in the outer boroughs.

The Community Growth Corporation (CGC) is a hypothetical development model meant to align social and financial capital in a way that allows for the preservation of affordable housing and the creation of community-driven neighborhood projects. The mechanism for capitalization is a public auction of excess floor area ratio (FAR) within a community that would otherwise go unused, or where the cost to build to the FAR outweighs the benefit of added interior space. Excess FAR is then exchanged for a share of the CGC. Altering the existing regulations so that FAR is no longer restricted to contiguous properties, but instead can be aggregated – forming new kinds of development– both low-rise affordable housing or higher rise mixed-income developments in adjacent neighborhoods that are suited for denser development (Image 2).

 

20141114_CGC44. Intra-borough Receiving and Donating Zones.

“Receiving Zones” are identified as areas that are capable of accepting increased density due to the availability of space as well as existing access to transportation infrastructure. “Donating Zones” are identified as areas that are currently over-populated and are severely rent-burdened, meaning that on average households spend more than 50% of their income on housing. The transfer of FAR between the two zones can only occur if they are adjacent.

 

20141114_CGC33. FAR Bank and redistribution of FAR

By exchanging excess FAR for shares in the CGC, landowners of properties with affordable housing receive modest investments returns that must be used to renovate or further develop the property. These returns are attached to the property itself rather than its owner in order to ensure that investment in affordable housing is continual, especially in neighborhoods that are already over populated and rent-burdened. All residents are able to gain shares in the CGC, regardless of whether or not they are landowners, through “sweat equity” – participating in street and public space improvements, engaging in senior care activities, coordinating transit pools, etc. Returns for these CGC shareholders come in the form of unit renovations or as rent credits, ensuring the advancement and quality of affordable housing.

 

20141114_CGC64. Participation in the CGC.

A CGC web interface would allow shareholders and community members to manage how their returns are both distributed, personally and within the larger community. A portion of yearly returns would be allocated to community developments ranging from schools to bike lanes and the interface would allow community members to participate in the decision-making process.

The CGC is predicated upon the commodification and a redistribution of the public asset of the right to build to ensure another right – a right to housing.