John Petro

Fixing Community Benefits Agreements

Despite the recession, a number of large development projects are still in the works in New York City. Plans are under way for two large housing developments on the Williamsburg waterfront and the city is also working on plans to develop new, mixed-use projects in Willets Point, Coney Island, and Flushing Commons, just to name a few.

Construction cranes will once again dot the city's skyline and these new developments will create both positive and negative impacts for the city and its residents. On the one hand, new housing will be built, jobs created, and new tax revenue will flow to city coffers. On the other hand, development puts strains on existing infrastructure, from schools to subways.

And when a developer is aided with city subsidies, there is a need to ensure that the surrounding community benefits from the use of scarce public funds. This means creating good-paying jobs and meeting other community needs like recreation centers and affordable housing.

Because of these concerns the use of Community Benefits Agreements has become increasingly common in New York and around the country. A CBA is an agreement between a developer and the community. These agreements cover a wide range of community needs, from local hiring agreements to the construction of day care centers.

These agreements are helpful not just for the community receiving benefits, but for developers as well. Developers are able to secure community support for a project and avoid delays, litigation, and aggravation.

But there is widespread agreement that the CBA process, if you can call it a process, is broken in New York City. Today's New York Times highlights a recent report that outlines some of the problems with how CBA's are negotiated, implemented, and enforced in New York City.

After all, the Atlantic Yards development had a CBA attached to it. But there were questions about whether the community was truly involved in the negotiation process. Clearly the resistance and lawsuits did not stop after the CBA was signed. Clearly some communities felt left out of the process.

There are questions of accountability, especially when grant payments are made by the developer to community groups. And what if a developer does not deliver on the promised benefits? Who has the power to enforce the CBA? Remember that CBAs are private agreements between the developer and the community--the city is not officially involved in these negotiations--and that CBA's do not carry the power of law.

To address these concerns, City Comptroller John Liu has put together a task force to examine the process and to look for ways to improve it. Comptroller Liu stated back in February:

From Atlantic Yards to Yankee Stadium to the Columbia University expansion, the public has seen a string of broken promises to communities and questionable involvement by some government officials. Furthermore, an additional layer of unpredictability confronts developers when they engage in private negotiations over benefits associated with their projects. In fact, studies have singled out New York City's community benefit agreements as examples of what not to do.

One option is to create a more formalized role for the city in the negotiation, implementation, and enforcement of CBA's. But a recent report by the New York City Bar Association suggests that this is the wrong way to go. "It is our recommendation that the city announce that it will not consider C.B.A.'s in making its determinations in the land-use process," except in some cases when the city is providing subsidies to a developer.

But perhaps the best route is to create uniform standards for development projects. Other cities address the impacts of new development through "development impact fees" or "linkage fees" that go to improve and upgrade infrastructure like parks, schools, or transportation. Standards could be set for housing developments that require the construction of affordable housing. And in the case of city-subsidized commercial projects, the creation of living wage jobs should be the citywide standard.

While you may think that developers would be opposed to this idea--we are talking about adding requirements that will cost developers money--it is likely that developers will be glad to have a level of certainty when beginning a project. By setting standards, developers will know at the outset how much their costs will be and they can plan accordingly.

If we can set the right standards for new large developments, then we can ensure that everyone, including community residents and developers, will benefit.

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Posted at 9:46 AM, Apr 29, 2010 in Urban Affairs
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