Why This Brooklyn Multifamily Development Site Sits Dormant

Walk around New York and you might wonder why some blocks have little or no housing despite tremendous demand for it.

You have to connect the dots.

At the Arrow Linen site, a Brooklyn Council member is seeking applicants for a task force to monitor construction of 250 apartments. Um, what construction?

Apex Development received approval 17 months ago for its project at 441 and 467 Prospect Avenue but still has no timeline to break ground. Although Apex steered the project past frenetic local opposition and through a political gauntlet, there’s no guarantee it will ever happen.

Apex principal Andrew Esposito said lining up financing has been challenging, given elevated interest rates and the high level of affordability he’d promised in order to get Council member Shahana Hanif to rezone.

Esposito also agreed to include a child care center and space for domestic violence victims. Those are not lucrative uses. Another factor is the high wage scale required for large 485x projects.

I warned about these issues when the deal was struck in February 2025.

Hanif had helped pioneer progressives’ new playbook for development by not reducing the proposed unit count — until then an unthinkable result in negotiations with Council members, who habitually shrunk projects — while maximizing the percentage of apartments set aside as affordable.

Her decision was a defeat for NIMBYs, who were demanding the project be shortened by a third, and a win for YIMBYs, who drooled at the prospect of new units in gentrified Park Slope and Windsor Terrace.

As my colleague Elizabeth Cryan reported, the agreement between Hanif and Esposito called for 40 percent of units to be set aside for tenants making an average 60 percent of the area median income. The Council member declared this a great outcome. On paper, it was.

I won’t crucify Hanif for pushing the envelope. After all, Esposito agreed to the terms.

He was under some pressure: Had the rezoning clock run out without a deal, the developer would have wasted the money it takes to go through the process, which can be $1 million or more. But he knew that going in.

Besides, the deal seemed plausible at the time. Everyone expected interest rates would come down and lenders would loosen up.

Instead, President Donald Trump went on a tariff crusade and launched a war against Iraq, reversing the decline of inflation and interest rates. Rates are now expected to get worse before they get better.

“Inflation still remains too high,” the Mortgage Bankers Association recently said in a release. “MBA expects the Federal Reserve will keep the federal funds rate unchanged through the remainder of this year, but anticipates that their next move will be a hike in early 2027.”

Meanwhile, socialists won a bunch of Democratic primaries, dashing hopes that Albany will undo the 485x wage mandate. Construction unions, in fact, are said to be mulling a lawsuit to prevent developers from clustering 99-unit projects to circumvent it.

Local politics, organized labor, presidential elections, overseas conflicts — these are the dots that, when connected, reveal why a dormant site in a prosperous neighborhood just sits there.

That said, Hanif’s vision might eventually be borne out. At some point the war will end, the tariffs will be rolled back, inflation will recede, interest rates will fall and rents will be high enough for 150 market-rate units to subsidize 100 affordable ones — even if the 485x wage scale remains. Esposito is hunting for debt and hopes to have news to report in the fall.

The family behind Arrow Linen, which has owned the site for generations and consolidated its commercial laundry operations at a more efficient plant, is Esposito’s partner on the housing project. They don’t have the same time pressure faced by developers paying interest on a large acquisition loan.

Until the stars align, a hulking relic will remain at 441 and 467 Prospect Avenue, where homes should be.