Bureaucrats Equivocate While Tens of Millions That Could Fund Downtown Affordable Housing Remain in Limbo
Lower Manhattan community leaders are pushing to allocate federal funds left over from the rebuilding of the community after the terrorist attacks of September 11, 2001 to additional affordable homes in the residential tower planned for Five World Trade Center.
In the wake of September 11, 2001, it was clear that an avalanche of federal funds would soon cascade into New York. It was also widely assumed that the upcoming mayoral election would be won by Democratic candidate Mark Green. For this reason, two Republican office holders — then-Mayor Rudy Giuliani and then-Governor George Pataki — created the Lower Manhattan Development Corporation (LMDC), a City-State agency that became the conduit for almost three billion dollars in aid from Washington. This would have effectively boxed Mr. Green out of decisions about rebuilding Lower Manhattan, but in the event, the election was won by the Republican candidate, Michael Bloomberg, in the closest race in modern City history.
After disbursing the bulk of these funds over the next two decades, the LMDC announced in late 2023 that it was winding down operations. But approximately $30 million in leftover funds remain uncommitted.
One possible use for this money would be to fund additional affordable apartments at the residential tower planned for the last remaining development site within the World Trade Center complex, known as Five World Trade Center (5WTC). The 80-story, 910-foot building planned for the site (which is bounded by Greenwich, Albany, and Washington Streets, and Liberty Park) is currently slated to include 400 rent-protected dwellings, out of a total of 1,200 homes. This total was bumped up from 300 last year, when the Coalition for 100 Percent Affordable Housing at Five World Trade Center, succeeded in lobbying elected officials to set aside one-third (rather than one quarter) of the apartments for tenants with incomes that make it impossible to pay market-rate rents. (This increase was made possible, in part, by a commitment from the Battery Park City Authority to allocate $5 million from its Joint-Purpose Fund, along with an additional $55 million from other government funding streams.) But, as its name implies, this grassroots organization is seeking maximum affordability at the site, since the development plan was announced in February 2021.
In July, the Coalition wrote to the Empire State Development Corporation (of which LMDC is a part), “we understand that [the federal Department of Housing and Urban Development] has approved the remaining unencumbered $30 million from September 11 LMDC funds to affordable housing at Five World Trade Center,” adding, “to the best of our knowledge, the Empire State Development Corporation and Lower Manhattan Development Corporation have not finalized the process by which these funds will be assigned to 5WTC. With project planning underway, it is essential that these funds be formally authorized and assigned to fund additional affordable housing at 5WTC as soon as possible. Time is of the essence.”
A spokesman for the federal Department of Housing and Urban Development (HUD) replied, “HUD continues to work with the Lower Manhattan Development Corporation to complete the final recovery activities, including the proposed affordable housing planned for a portion of the World Trade Center’s site. The Department has reviewed proposed funding options with the Lower Manhattan Development Corporation and offered options to provide affordable housing at the site — a key final component of this critical redevelopment plan.”
A representative of the ESDC added, “”Empire State Development is actively working with HUD regarding Five World Trade Center. We recognize the critical importance of affordable housing in New York City and remain firmly committed to allocating the remaining Lower Manhattan Development Corporation funds toward this vital need.”
Vittoria Fariello, one of the leaders of the Coalition for 100 Percent Affordable Housing at Five World Trade Center, responded, “while it is encouraging to hear that HUD is considering the use of the $30 million remaining in LMDC funds for affordable housing, it is confusing to read that they are ‘discussing options.’ It was my understanding that the funds would be used to increase the number of permanently affordable units at 5WTC and that these funds would be used to ‘purchase’ such units. Of course, a delay in an agreement risks an increase in the costs of construction, and thus the fewer units we’ll be able to get for the funds. The delay is frustrating as we continue to face a massive housing crisis.”
One roadblock to creating additional affordable homes at 5WTC is a policy axiom dictating that any use of the site must generate as much — or more — revenue on a per-square-foot basis as the office developments that have been erected elsewhere within the complex. This arbitrary requirement effectively renders it administratively impossible that 5WTC be dedicated to any public service purpose that does not maximize financial return.
Such a policy is contradicted by multiple other nearby uses. The leases granted by the Port Authority and LMDC to the National September 11 Memorial & Museum, the Ronald O. Perelman Performing Arts Center, and the St. Nicholas Greek Orthodox Church and National Shrine, all located within the World Trade Center complex, rent many acres of publicly owned land worth many hundreds of millions of dollars at a price of one dollar per year to each of the non-profit organizations that operate those facilities.
The site that 5WTC will occupy has a troubled history. It was previously the location of the Deutsche Bank headquarters, but that building was largely wrecked by falling debris on September 11, 2001, and never reopened. As the tower was being demolished in August 2007, a fire broke out on the 17th floor. Firefighters became lost in a maze of polyethylene sheets, which had been installed to prevent the spread of asbestos as the hazardous substance was being removed, but had the effect of trapping smoke. When firefighters tried to activate the building’s standpipe (a form of indoor fire hydrant), they found it had been illegally cut. Two firefighters died inside the building, while 105 others were injured, and the contractor that was handling the demolition project was later investigated for ties to organized crime.