What’s Next for Blue Sea Development: Q&A with Les Bluestone
By Diana Mosher
Les Bluestone has been developing affordable housing in the New York Metro area since 1999 when he and his partner formed Blue Sea Development Company. Blue Sea was ahead of its time, not only in its chosen niche but also in its desire to build sustainable apartments for those who can’t afford market rate. Blue Sea’s LEED Platinum buildings include The Eltona (the subject of a Mt. Sinai School of Medicine study on the effects of living in a green building for families who suffer from asthma); The Melody (the first development to receive a LEED credit for its incorporation of Active Design Guidelines to help reduce obesity); and Arbor House (a low income rental building that integrates a 10,000 sq. ft. hydroponic rooftop farm producing fresh vegetables for sale to building residents and the community). I recently sat down with Les to find out what he’s working on now and hear his views on the challenges facing affordable development.
What is Blue Sea Development working on now?
Les Bluestone: We are working on three new affordable housing developments in NYC and on Long Island, of about 600 units in total, including very-low-income rentals, affordable home ownership, seniors housing and housing for those with developmental disabilities. In one of these developments, we are creating a cultural arts center that will house local organizations with missions in media arts, dance and music. The development will be providing a theatre for use by these groups as well as for outside community organizations.
What has been your most memorable/rewarding project? What would you like to be working on but haven’t been able to start yet?
Les Bluestone: The memorable parts of development for me tend to revolve around the number of hurdles and challenges we encountered. I’m generally happy with what we’ve accomplished (always wish we could do more), but the greatest rewards are not the buildings themselves, but come when people who live in them thank us for the change it has made in their lives since moving in. If I had to pick one development, it would probably be our Arbor House building in the Bronx. In this building, we pushed the envelope edge a bit in creating a hydroponic farm greenhouse on the building’s roof which presented several challenges in terms of meeting the NYC zoning and building codes. While we prepared lengthy arguments and backup materials ahead of asking for permission, I think in my 40 years of doing this work, I had never experienced the cooperation and positive “can do” problem solving energy from people in the NYC Planning and Building Departments as I did on this project. It really showed me what is possible, and that government can be a great partner.
What is active design and why is it so important?
Les Bluestone: Active Design is a set of design principles and guidelines based on historical evidence showing how the built environment can, and does, affect the physical, mental and social well-being of individuals and communities. The guidelines revolve around building, streetscape, and infrastructure design and was inspired by the great reduction of infectious disease achieved in 19th century New York through development in these areas. The importance of incorporating the Active Design Guidelines is ever increasing, especially as the prevalence of chronic illnesses such as heart disease, obesity and diabetes is on the rise.
Do you think the public is confused about the differences between affordable housing and low income housing? Can you help clarify—and do these terms have different meanings from state to state?
Les Bluestone: Definitely so, and that confusion has been further amplified by anti-development efforts around the country who look for any reason to stop housing production. The federal government (HUD) has identified “affordable” as a target where housing costs account for no more than 30% of a family’s income. “Low-income” housing (a subset of affordable housing), uses that same 30% of income calculation, but applies it to a figure that establishes annually called the Area Median Income (AMI). This calculation looks at the income data of a specific geographical area, applies it to a family size of four and through a prescribed formula, it arrives at the AMI. The definition of “low-income” as established by federal government agencies is an amount equal 60% of the AMI figure—or lower. It is almost impossible to reach low-income affordability levels in development without government assistance of some sort. And most, if not all, government programs from state to state use AMI figures to calculate how much assistance is required in their programs.
Affordable housing can include a range of income eligibility bands through the use of AMI multipliers, which typically run from 70% up to 165%. While these numbers might not seem affordable to some, often the goal of a municipality is to provide housing options for those vital to making a community run and thrive. These occupations include teachers, nurses, police, firefighters, government employees and many others who are often priced out of expensive housing markets near where they work, forcing them to sometimes commute great distances with increased transportation expenses.
Do we need to change how we design and build affordable housing? Is modular design finally taking off? What are pros and cons to modular?
Les Bluestone: Affordable housing design and construction has improved dramatically, and in many locations it has gone well beyond the market in terms of sustainability due to local government program requirements. Going back to the 1970s, affordable housing was only being built by the federal government and as a result, one can drive down the roads of many communities and easily identify affordable housing projects from years past. Today, a keener awareness of what makes for good design, even within budget constraints of affordable housing production, makes it more difficult to call out an affordable housing development from market rate developments in the area.
I have high hopes for modular in the affordable housing arena to be able to provide high quality construction at a quicker speed and lower cost, however government needs to adjust its process to take full advantage of the benefits. The use of modular housing requires most of the design work and manufacturing to occur before the construction financing is available. This places considerable pressure and much greater risk on the developer for financing a much larger amount prior to closing, without a real assurance that government will meet a scheduled closing date. There remains a considerable pre-closing financing burden, but this can be overcome through some innovative financing strategies that will add minimal expense.
What’s the biggest challenge facing affordable housing development today?
Les Bluestone: There are still many challenges that continue to hamper affordable housing development around the country, and the challenges come not only from those that oppose affordable housing but also from those who promote it. NIMBYism is still the number one challenge and it has become the expected reaction to not only affordable housing, but to market rate housing as well. The irony is that affordable housing developments typically go through a much more extensive environmental review process that includes consideration of light, noise, shadows, flora and fauna, and archaeological impacts because of government involvement than a privately financed market rate development.
In many municipalities, the development approval process can be arcane and surprisingly subjective and arbitrary, allowing for multiple legal and regulatory challenges, dragging out and sometimes ending prospective housing developments regardless of their merit, in the name of NIMBYism. Municipalities that create master plans with community visioning and input can create as-of-right development planning allowing for future housing developments to occur without the NIMBY pushback that is so detrimental to affordable housing production.
Do affordable projects run into more delays than market rate?
Les Bluestone: Yes, government bureaucracy, program restrictions and ever-increasing requirements often delay the start of a project for years as compared to a market rate development. Government administrations, along with their shifting priorities and personnel, change regularly on 2- , 4- , and 6-year schedules often leading to orphaned or further delayed pipelined development projects. The more successful programs throughout the country are ones where the government oversight is still present, but not burdensome or cost prohibitive.
The lack of cooperation and coordination within the various agencies of a given municipality can literally add years and millions in cost to larger affordable housing developments. It is very common, almost the norm, for government to supply subsidy funding to a development; but, at the same time, extract additional fees and refusing to waive existing agency related fees from that development, thereby driving up the overall project costs.
Government programs often require social service provisions in low income developments yet fail to provide funding attached to the development and require the service providers to apply for funding from a byzantine assortment of outside government programs. Wouldn’t tying social service dollars to the development being required to provide them make much more sense since the funds often come from the same municipality in the end? A simpler public/private partnership model needs to be developed allowing developers to do what they do best and government to provide assistance as it does best.
What’s next for affordable housing?
Les Bluestone: Affordable housing development is continuing to lead the way in sustainability design and integration, and I expect that it will continue to do so. This is especially important as the operating margins for affordable housing are considerably tighter than in market rate development. The integration of health-related programming and services in lower income buildings—ones where the residents are more vulnerable in many ways—will become a more common occurrence. There is a slowly creeping understanding amongst policy makers that funding for housing lower income families pays back dividends by reducing other municipality borne expenses related to this population. With any luck, there will be adjustments to programs and funding allocation in this direction.
