5 World Trade Center’s Journey to Including Affordable Housing

About 33 percent of the 1,200 units — or 360 homes — approved in June by New York’s Public Authorities Control Board (PACB) are expected to be priced for low- to moderate-income residents, with 80 units reserved for survivors of the terrorist attack 22 years ago. Affordable would be defined as priced within the budget of an individual making less than $42,000 annually, and less than $59,000 for a family of four.

With 2024 in the offing, construction is set to begin on the 900-foot tower that could have been an office development if the office sector’s leasing market hadn’t limped so laggardly in its recovery from the pandemic.

Arden Sokolow, the executive vice president of real estate development and planning at Empire State Development, New York’s economic development arm, said the stakeholders are currently working through the due diligence phase of the project so construction can begin on time. Completion could take anywhere from four to six years.

While the state jumps through its hoops, the developers are putting together financing packages and defining the distribution of equity, according to Sokolow.

“When this project originally went out, it went out as a commercial [request for proposals], the original general project plan that we did was for a commercial building,” Sokolow told Commercial Observer. “Because of the change in [office market] conditions, even before the pandemic, we started thinking about this site as residential. We made a modification to the general project plan to turn this into a residential RFP.”

The housing element not only helped PANYNJ steer around the financial booby trap lying in the office market, but to the outside observer it also looked like a missing piece of the puzzle that would make the west side of Broadway in Lower Manhattan look more like the Financial District in its evolution.

“One of the big success stories of lower Manhattan is how it’s transformed from just a 9-to-5 office district into probably the best example of a mixed-use … where you have like a really strong commercial office market and then you also have a residential component that’s able to support a lot of the kind of local businesses,” Moses Gates, the Regional Plan Association’s vice president for housing and neighborhood planning, said in an interview. “They’re able to keep the businesses open later; it’s turned into a real 24/7 neighborhood.”

Officials have long debated whether the 5 WTC site would work best as office, residential or both.

“So if the residential development is not viable for economic or regulatory reasons, the Port Authority will be limited to developing an office tower,” Derek Utter, chief development officer at the Port Authority, told elected officials and Manhattan Community Board 1 at a December 2021 meeting. (PANYNJ deferred to Empire State Development for comment on the story.)

But even in 2021, the discourse was filled with the voices of activists pushing for a somewhat more extreme outcome for the housing prospects at 5 WTC, which could feature roughly 1.2 million square feet of living space. 

The site sits to the south of Liberty Park and near the Santiago Calatrava-designed St. Nicholas Greek Orthodox Church, a house of worship that was destroyed when the Twin Towers fell. The rebuild of the church was completed in 2022. 

How tenants applying for the affordable housing portion will be chosen is not clear. There have also been questions about whether  9/11 survivors — no doubt traumatized by the events that day — would be interested in living in an apartment overlooking the Infinity Pools that memorialize the attack, the New York Post reported in August.

A community group calling itself the Coalition for a 100% Affordable 5WTC said it saw the 25 percent share of affordable housing as a starting point in negotiations toward having all the housing in the tower designated affordable. 

The PANYNJ wasn’t so sure that was feasible, since lower rent collections would hurt its revenue stream.

Gov. Kathy Hochul was eventually able to force a slight increase in the share of affordable units with a $40 million contribution from her administration, $20 million from the New York State Legislature and $5 million from the Battery Park City Authority.

Leading up to the PACB vote in June, when agreement on over 30 percent of the units being affordable started looking like a reality, the Coalition for a 100% Affordable 5WTC gave one last push for policymakers to halt the project and find a way to restructure the plan for more low-income households.

That wasn’t necessarily a successful attempt, but activists weren’t disappointed with the decision, either.

Jeannine Kiely, a Lower Manhattan district leader and member of the Downtown Independent Democrats, lives north of Canal Street but has worked around the World Trade Center campus since before 9/11, and has seen the district evolve over the years.

While community leaders such as Kiely pitched the highest amount of affordable housing, the ultimate concession in affordability was still a positive development in the negotiations which she believes will still help create an economically diverse enclave.

“There’s all the different federal agencies and so forth who said come back, it’s safe. And now a lot of these people who rebuilt the neighborhood are sick. This is sort of a small way to recognize the sacrifices they’ve made,” Kiely said in an interview. “So I do think it’s fantastic to have a portion of this property affordable. I know it’s gone from 25 percent to one-third, and I’m hoping that there’s a little bit more that can be eked out in terms of affordable housing, but this is a high opportunity neighborhood.”

In the end, there will still be plenty of workspaces to fill at 5 WTC, with 190,000 square feet of offices, a 12,000-square-foot community facility space, 55,000 square feet of public amenity space and 7,000 square feet of retail space, according to Silverstein Properties.

Silverstein Properties and Brookfield declined to comment.

Mark Hallum can be reached at mhallum@commercialobserver.com.