Bad Optics, Good Result: Renegotiated Project Pencils Out

13 minutes read

A hound-dog journalist just reported that developer Eli Pariente pulled a fast one.

After getting new zoning from the City Council for two major Brooklyn projects, Pariente and a local Council member’s emissaries quietly renegotiated their affordability, Norman Oder wrote in City Limits.

Instead of a promised 35 percent of units set aside for lower-income tenants, the new buildings at 870-888 and 1034-1042 Atlantic Avenue have the standard 25 percent affordability. Pariente donated another lot, at 1001 Pacific Street, where 46 affordable units will be built, hitting the 35 percent target if you consider all three lots together.

If your priority is transparency, or seeing developers forced to “do more” for needy New Yorkers, this is scandalous. A bait-and-switch.

But if you care about the housing shortage, it’s fantastic. A triumph of practicality over grandstanding.

Council member Crystal Hudson didn’t broadcast the shift because the optics are bad, especially after she said in 2022 that her initial deal proved that “developers can and must offer more than required under the Mandatory Inclusionary Housing program.”

Reality check: Developers don’t decide what is possible. The market does.

The change in terms here has a simple explanation. A historic rise in interest rates beginning in March 2022 made the two projects impossible to finance — at least if more than 1 in 3 apartments had deeply discounted rent.

The developments didn’t pencil out with 153 units (out of 438) affordable to households earning, on average, 54 percent of the area median income. With borrowing costs having soared, market-rate rents in that part of Brooklyn were not high enough to subsidize so many low-rent units. Lenders wouldn’t give Pariente a dime.

Under the new terms, Oder reported, the two projects have a combined 517 units, 130 of them affordable at 59 percent of AMI. That’s a lot better than two holes in the ground.

I give Council member Hudson credit for being flexible, even if she delegated the negotiations to nonprofit housing groups IMPAACT Brooklyn and the Fifth Avenue Committee to avoid leaving her fingerprints on the deal.

There’s a valuable lesson here for the other 50 City Council members: You can’t build housing with a press release. A project is not a project until it gets a construction loan.

The tenor of Oder’s story is that Pariente got away with something. But a close reading shows that the developments meet the affordability mandates of the neighborhood rezoning known as AAMUP that Hudson and colleague Chi Ossé agreed to in May 2025.

Pariente could have waited for that rezoning. Hudson initially told him to. But Pariente couldn’t be sure it would happen, and Hudson realized that New Yorkers need housing as soon as possible — and here was a developer ready to put shovels in the ground.

So they agreed to 35 percent affordability, which would have held up had the Fed not jacked up interest rates 525 basis points, something no one anticipated.

Oder’s article claimed the 2022 deal gave Pariente a “first mover” advantage over other developers, and that this allowed him to buy land at a discount and rent units before there was any competition on Atlantic Avenue.

But being a “first mover” is risky. Most developers avoid being first in an untested market.

The Jay Group was a first mover in rezoned East New York, building what was supposed to be a luxury building at 2886 Atlantic Avenue. But it couldn’t fill units at $2,500 to $4,000. The developer salvaged what it could by selling the building to Camber Property Group and a nonprofit, which turned it into rentals for homeless shelter residents.

Pariente was developing a low-slung, underpopulated, industrial corridor filled with car washes, repair shops, and rubble-strewn lots. A men’s homeless shelter is just two blocks from his 1042 Atlantic Avenue site.

I walked the corridor before the rezoning. I didn’t see a single restaurant or anything else that would attract tenants to Pariente’s buildings. A shelter resident giving off a strange vibe prompted me to cross the street.

If Pariente paid less for his parcels than others cost later, it’s because they were worth less. Such prices were available for anyone buying on that desolate stretch. This was a gamble, not a sweetheart deal.

No one knew whether Hudson would agree to a spot rezoning or what conditions she would impose. Certainly no one could have predicted she would renegotiate if her terms proved unworkable.

Pariente, his investors and his lenders are taking a chance. If it pays off, others will put up similar buildings and this part of Atlantic Avenue will become a safe, thriving neighborhood. If it doesn’t, his projects could suffer the same fate as “early mover” Jay Group’s in East New York.

Either way, there are now 500-plus new homes in a city that desperately needs them.