I have been in parts of Brooklyn where there is a high demand for unattached houses to be torn down for redevelopment as apartment buildings for rent or for sale as condos. Yet, once the construction is done, few apartments appear to be occupied. One, with merely a few apartments left on the market, has a 421-a abatement. I can't help but think the owners are buying for tax shelter purposes only, and that they will likely never live there and will never rent them out.
Brooklyn can only go up so much before it goes out.
I was lucky enough to interview the Pulitzer-Prize-winning architecture critic Paul Goldberger on this topic a few years ago. He had some great things to say, including criticizing the "brittle sleekness" of these towers. Also:
“One thing that makes me sad is that Brooklyn architecture used to be so good. . . The best brownstone neighborhoods in New York are in Brooklyn, not Manhattan. So much of the greatest architecture in New York is in Brooklyn, not Manhattan. And yet, in terms of what’s happening now, that’s not the case. What’s being built in Brooklyn now is mostly real estate speculation, not super high quality building like there once was.”
here's the whole thing, if you're interested: http://www.bkmag.com/2015/11/30/all-the-brittle-towers-on-the-state-of-b...
I guess we should feel badly for these 'developers'. And by the way, those 'concessions' are pure marketing gimmick. 'Wow, I actually get one month free, for my new $3600 or whatever it is, One Bedroom apartment." Once that first 'bargain' year is over, not only will you be paying the full amount, but likely get an increase automatically, each and every year. And even IF such bldgs are rent-stabilized when first opening up, that doesn't mean the rent still can't go up $80 or so per month (once the city's Rent Stabil % has been approved for the year....)
These buildings are great on employing 'psychology', but anyone with a brain understands that you can rent a perfectly nice apartment in a 'normal' building or house, and still get packages delivered, food delivered, and you can pay for a basic gym membership nearby and even pay for laundry drop off/delivery service, and still spend way less per month than these 'luxury' buildings.
5
sorry but looking at the photos that accompany this article i begin to see why brooklyn is losing it’s soul. this is not the working class brooklyn i grew up in. a childhood living in a walkup over a pizza parlour in parl slope. change is good but not when it rips out your heart and soul. spent my whole life living and working here i wish i could get an subsidized apartment.
3
I'm glad I live in Atlanta, GA.
4
Water tunnel number 3 is not yet on line and operational for Brooklyn yet the city is allowing more and more people to be crammed into the borough -- a disaster waiting to happen.
3
28,400 rental units. How many new public school seats does that add up to? Having raised two children in Greenwich Village over the previous two decades, I witnessed that as the number of new units there exceeded 2,000, the two zoned elementary schools began to turn away students. Sent them out of district. A new middle school was fought for and won, but isn't ready yet. It's being housed in another school. And what of hospitals, firehouses, police? Are these just amenities? Concessions? How have we citizens blindly allowed rampant development of this kind without such consideration?
5
Emmy Lou, 28,400 rental units is a drop in the bucket for a growing city of 8.6 million.
2
As a longtime Park Slope resident, watching these towers go up has been interesting. I'm not surprised they're having trouble filling them--they're ugly. One of Brooklyn's biggest advantages is its neighborhood feel. Moving into one of these generic, institutional faux-luxury buildings is anathema to living in Brooklyn and I wonder how many of the Brooklyn-bound feel that way. I don't need to see them to know they ALL have bleached oak floors, stainless steel appliances, white marble kitchens, "reclaimed" wood somewhere and rainfall shower heads. *yawn* And the architectural laziness on the part of the developer will render this period of NYC development as a low point in NYC building history.
And can we please retire the word "luxury" from real estate? Having been in many of these "luxury" units I can tell you they are far from it. If your walls feel like they're made from styrofoam and the seams of the baseboards are already splitting, there's a good chance it's not "luxury".
37
Dear Lord, look at that picture. What a dumpster fire downtown Brooklyn has become. Perhaps one of the reasons these developers can't sell out their buildings is because they have created the ugliest neighborhood in all of New York. Who wants to live in building that looks like a campus dorm at Southwest Missouri State University--only 60 floors high? How can these developers look at themselves in the mirror knowing they have ruined the horizon for millions of Brooklynites? At least Stern and SHoP is creating something beautiful at the old bank site. Too little, too late
26
I'm always amazed how public transportation is almost universally ignored when discussing affordable housing. There are huge areas of Brooklyn and Queens (and even the Bronx) that are effectively isolated from public transportation (and therefore the city by anyone who can't afford a mortgage and a car payment). If they were connected to the subway system (BY TRAINS, not buses) these areas could profitably be redeveloped into affordable housing by increasing density to be more in line with what it is in other areas of the city. You wouldn't need much in the way of tax breaks or rent regulation; the market would largely take care of it.
13
No, it's the opposite. If they were near subways, the rents would be far higher. Rents have already gone up along the 2nd Avenue Subway route. Besides, the MTA is completely incompetent at building new subways and stations and as the Times has previously reported, we spend about 5x what it takes to build a subway anywhere else in the world. We've only built about four new stations in the last 30 years.
10
The vacancy rates in Ottawa, Toronto and Vancouver are hovering between 1-2%. Prices are nowhere near NYC levels, but you usually get about 12-24 hours to put in a rental request before the apartment is off the market.
6
It's great that the couple who bought the $3 million townhouse in Red Hook can enjoy the new ferry service, which is subsidized at 3x the rate of the subway.
The rationale for subsidizing luxury development through city-funded waterfront parks, city-funded ferries, and 30-year tax abatements is that eventually those building would start paying RE taxes which would help everyone. But RE taxes in older, less desirable neighborhoods continue to skyrocket, and the city does nothing in those neighborhoods with regard to transportation and parks. Not to mention the zoning-mandated parking garages in the new buildings that are flooding areas well-served by public transportation, bike paths, etc. with cars. Agreed that quality of life and sustainability are being thrown under the bus for development, the goods of which have not been shown.
23
Absolutely fair point, not to mention the effects of new high density on long term residents in vicinity of luxury towers.
1
Real estate developers putting up these new buildings in Brooklyn think they're special, and that ordinary rules of supply and demand don't apply to them. That's why they're shocked when they can't rent apartments at $3-5k per month. If they took a little time to speak to ordinary New Yorkers they'd realize the demand is for apartments in the $1-2k range.
Developers need to be like IKEA and build to a price point - they need to figure out how to build habitable code-conforming units/apartment houses in the $1k (studio) to $2k range (2-bedroom), at a modest profit. They will be able to quickly fill the buildings with reliable tenants. They can slowly build wealth by creating more and more successful, fully rented buildings.
It is lunacy to build tens of thousands of units geared for the top 1%, or to try to rent "affordable" apartments that rent for upwards of $3k per month. That's a mortgage payment, and more than the net monthly income of the average NYC resident. People won't jump through hoops to pay that kind of money to rent an apartment, especially in a building in which people down the hall or a few floors down pay far less for equivalent units.
30
This is not how it works. These new flats are not expensive because they have fancy flooring, modern appliances, a gym in the building or even a swimming pool. They are expensive because the general scarcity of housing: since even an old poor-quality apartment in Brooklyn is expensive, any kind of new-built will be out of reach of most people.
They are made luxurious because of your one-bedroom is worth in the millions anyway there is no point scrounging and not making it luxurious, especially since as this article explains, demand is actually not that strong and you are competing with other developments. Construction costs are small compared to the value of an apartment.
The only solution out of this is to build enough market-price new developments: once they can't find enough people to pay $3,000 a month for a glorified pile of bricks, they'll offer them at 2,500. Once they can't find enough people to pay 2,500, they'll offer 2,000. Once they can't find demand at 2,000, they'll offer 1,500. Once they'll offer 1,500, landlords in the rest of Brooklyn would have to price their non-luxurious (to say the least) apartments accordingly.
It might seem a long way off, but:
1) That's what you get for years of not building enough out of complacency and demagogy: lot of catch-up to do.
2) It might not be that far-off: the market is not that deep (as this article explains, it is already saturated). Once there is oversupply, prices go down quickly.
8
Most of the Brooklyn transplants would rather live in a charming brownstone walk up than a soulless glass tower anyway.
6
The developers are also unable to build cheaply in New York because it is impossible to do so.
In addition to the cost of acquiring land (or property and then demolishing it), all regulations bring added cost in terms of time and money, as well as the fact that 'affordable housing' is actually more expensive to build because of red-tape and higher building labor costs.
If a market rate new building would cost $300/sf to build, the affordable buildings cost $750/sf and more to build.
Who pays for this additional cost? Everybody of course. Because we, tax payers are subsidizing these so called 'affordable housing' that are actually affordable to only a negligible number of people.
4
Life lesson #1: You'll forever be dragged by the nose if you are a renter. For those who struggle to stay in the "it" neighborhood, move further afield, buy if you can. Who knows, in ten years' time, your once little loved neighborhood could become the next hot thing. Why pay a king's ransom to squeeze yourself in a shoebox with no future (but to pray that your landlord won't squeeze you out in the future)?
19
It is amazing that a lottery is able to provide a home to an actress. Hmm. If you cannot afford NYC, don’t live there. Those affordable apartments should be available to hard working folks or those that are unable to work, not hard working artists that want to be in NY, yet can’t afford to live here. That vignette highlights everything wrong with the “affordability” debate and the rent stabilization crowd.
13
What’s the distinction between hard working actor and hard working folks? Hard working actor having too much fun? What about stand up comic? Painter? Pianist? Rapper? How bout a lowly potter or glass blower,- too much art involved in their process? I’m curious to know who gets crossed off your list and why. Is creativity the problem? Or the lack of utility inherent in art?
24
The justification for taxpayer subsidized affordable housing is that the people who sell newspapers and coffee to, clean up the offices of, and show up to the office with a defibrillator for, the high paying taxpayer,
These people need a home if a city is to thrive.
15
Considering most actors are also moonlighting doing all the jobs you think are more "deserving" of affordable housing, your point is ultimately moot. However, saying one type of professional deserves affordable housing more than another type is basically reverse-socialism, which I imagine you're not a fan of. Either affordable housing exists for those who need it regardless of the job code on their 1040 or it doesn't exist at all. Thank goodness it's the former.
16
Boohoo. i am sick of luxury condos built with LLC money by people who could care less about the future of this city,and the mayors who keep enabling them. The whole feel of Manhattan and a lot of Brooklyn is being uglified by these souless cold glass buildings. How,about,some forward looking,planning about a livable city,before it is really too late ?
30
Yup, I am disgusted by our local reps who purport to represent and care about their constituents, but yet who are rubber-stamping all these development projects with nary a thought of the future.
2
I really wish you would write about how the City gives tax abatements for Downtown Brooklyn 80/20 buildings, but looks the other way when the developers use preferential rent loopholes to operate the “80” stabilized units like market rate units.
Say you move into an apartment listed at $3,400/month, rent stabilized. You expect that your rent will increase by 0-2% annually. But when your lease comes up for renewal, you notice that the landlord increases your rent to $3,600 because the max legal rent was set at $4,000. Never mind that the max legal rent bears no relation to reality.
Adding insult to injury, your building is posting comparable units to new renters at $3,400. They refuse to reduce your rent increase or give you any incentives that are available to new tenants.
You are now paying above market for your rent stabilized apartment. You can move to another building offering comparable apartments at $3,400; however, they are playing the same game with the effective vs full and/or preferential vs max legal rents. In one year’s time, you will be in the same boat. Realistically, rents are anything but stabilized and who wants to sign up for that?
I don’t feel sorry for these guys with high vacancy rates. It’s a problem of their own making and they need to stop playing around with the numbers. And the City needs to make sure it’s getting its money’s worth on tax abatements.
27
Desiree, I have understood the 80/20 program to require a building to keep 20% of units rented to low income tenants, while 80% remain market rate. What you're describing seems to be either a bait and switch, or the leasing office misleading potential renters into believing a renewed lease is protected from market rate increases.
1
Does that happen often? Our rent stab unit in a newer building is a solid grand below legal rent but we have a two year lease so don't have to worry for 23 more months. They don't disclose any of this of course but I know how to read a lease. But if the market is soft why push out tenants if you'll have vacant units?
2
A $3400 apartment wouldn't be rent stabilized as the threshold for de-stabilization is much lower than that.
https://ag.ny.gov/sites/default/files/tenants_rights.pdf
4
I'm with commenter Carmen -- look elsewhere, folks. Life is a grand adventure. I have a two-bedroom in Istanbul, pay less than 600 USD/month in rent, public transport is great, the food is much healthier here, and I have a view of old Constantinople from my balcony. Plus I save half of my salary. My neighbors are kind, and a delicious meal in the local kebapci costs less than ten bucks. And the sunshine, oh the sunshine....
My family is working-class, and most of them back in the States are struggling. I don't regret my choices. Lots to love about NYC and the U.S., but the world is a big place, and if your skills are transferrable....
32
I had a completely different experience in Turkey, and noted that many from the middle class dreamed of living in the US - at a minimum, they would try to get their children into US universities to improve their future. I also don't see how an American, with no family in Turkey and no fluency of the language, could just up and move there - what kind of job would you be able to get as a foreigner?
6
What "working class" person can just pick up and move to a foreign country?
17
I'm a high school teacher and come from a factory/health care working family. They made sure I had an education, and english-speaking teachers are in demand all over the world. I was terribly house-poor for two years, trying to achieve that American dream... It's too hard as a single person. I'm doing what my immigrant great-grandparents did - finding a better life.
3
The view that some of these apartments have are incredible but the prices are just as unreal.
14
The view is incredible, that is, until it isn't. I experienced a bit of schadenfreude a couple of years ago as I walk by a development known as "The Edge", in North Williamsburg. Several glass towers went up, presenting enviable skyline views and when those condos were fully tenanted, a much larger structure, by the same developer, went up right along the East River, obscuring everyone's upscale bragging rights with a view of someone even wealthier's kitchen. Hardee har har!
6
The commenters are right; tendy Brooklyn neighborhoods are so yesterday—way overpriced, overcrowded and lacking the quality of life that makes life enjoyable.
We woke up to that fact 12 years ago, sold our condo in Park Slope and moved north. Not to overcrowded and overpriced Westchester county or topographically bizarre, expensive and crowded Putnam county, but to beautiful, umcrowded, relatively affordable Dutchess county, where the skies and rolling, pastoral countryside open up mountain vistas and orange and purple sunsets.
In the Mid-Hudson Valley, this exurb Of NYC is the the northernmost county served by Metro-North and has all the shopping malls, commercial corridors with big box stores, culture and entertainment, conveniences, highways and interstates, airports and recreational amenities one could ask for. Add to that charming shops, historic towns and villages, area colleges and close proximity to NYC.
We live in central, southern Dutchess county and often take the 75 minute drive to Midtown to enjoy all that The Big Apple offers. When we first moved here we found ex-NYC folks galore, and the exodus of former residents of Park Slope, Greenpoint, Brooklyn Heights, Dumbo, et al, has continued unabated. The trend has been publicized extensively by media, including the NYT.
13
It is a shame that for once there is a very interesting article in the Real Estate part of this newspaper (usually used as barely-disguised advertising for the property business), but everything is crammed in with not much analysis.
You could write many articles digging in so many interesting elements of this article that are not discussed enough:
1) How landlords “cheat” with rental prices to disguise slumps in demand in statistics.
2) How tax breaks are offered to developers to benefit people that are richer than half the population.
3) How tax breaks allowing people to live in $3,000-a-month apartments for $500 (ie $2,500 per month of taxpayer money) are maybe not very sound economically.
4) Similarly: is subsidizing the cost of Dawn’s apartment from $3,000 to $895 a good use of public money since she could actually rent a room for that price? Taxpayers are in effect paying (a lot) to improve her comfort.
5) How even the fancy developments, even in Brooklyn (two categories for which people think there is an infinite demand), do not simply find takers after a week.
6) Or more polemic: how subsidized housing is cannibalizing market supply and hence is an obstacle to prices falling (taxpayers paying inflated rents being hence hit twice, hard): if developers are already struggling to find demand and are slashing their prices, what would it be if you added the 20-30% of total apartments to their stock of empty properties?
47
Excellent comments
NYC housing subsidies are absurdly costly inefficient inequitable and unfair
15
Wait - a slide show where every-other image is an ad?? Too much of a bad thing and makes it unwatchable.
23
Great- a housing lottery is won by someone living in Atlanta
24
FYI: Georgia & North Carolina offer big financial incentives to Film & TV production companies, drawing away work from NY. (Note the numerous appearances of the Georgia peach icon at credits' end.) The person you mention is "a 45-year-old actor," who's "wrapping up a job in Atlanta." Sounds like she's among the many NYC actors & crew who prefer working here, but must go "on location" for jobs. Sadly, the rapid & reckless over-development of Brooklyn counts among its negative consequences the loss of middle class jobs in Film & Television production.
17
Renting in Brooklyn is now a far better option than buying.
5
i moved to Ipanema in Rio de Janeiro from San Francisco. i am paying $900 a month for a two bedroom apartment, two blocks from the beach. enjoy your $4000 a month condo in "Brooklyn".
13
I’ll take Brooklyn/NYC any day over Rio - Rio has high crime rate, corrupt government, and poor infrastructure. My cousin who lives there got robbed - by a cop. No thanks!
19
People are waking up to the fact that there is inadequate public transportation in these new hot neighborhoods in Brooklyn. Lack of adequate infrastructure is driving prices down in Brooklyn.
11
I know someone who owns in the Prospect Park area but is so fed up with the commute into Manhattan he is considering renting out his place and moving to Westchester, where he can rent a whole house, have the same 40-min commute to Manhattan (but in nicer surroundings and with probably fewer excuses), plus access to the outdoors and a car he can park for free.
20
Ft. Greene and Downtown Brooklyn have tons of transit options.
5
Why do you think de Blasio proposed his "streetcar to nowhere", which thankfully seems to have died a quiet death. The people who moved to luxury towers in North Williamsburg and Greenpoint have made a choice. They knew that they were a schlep from the nearest G train station, no thrill in itself. They already have ferry lines, literally right at their doorstep, but that wasn't enough. With the subways falling apart, a group promoting the "Brooklyn Queens Connector" was formed, with a shadowy cabal of developers at its helm and de Blasio as its eager stooge. Aside from being able to list it as one more "amenity", it would have served no one except the wealthy along the river and even then, its only function would have been to transport their nannies more expeditiously. The group even had the nerve to claim that they were doing it to help the people in the Redhook Projects, people to whom they never gave a thought in their lives. Disgusting.
8
Red Hook is along the East River? Sounds like some luxury rebranding of Red Hook Channel.
The explosion of luxury developments at the expense of market rate housing has been the worst thing to happen to New York since the Great Depression, in terms of quality of life. With any luck the greedy and short sighted people responsible with come around to that reality.
39
Not only is Red Hook suddenly on the East River, it is where one goes to get a "suburban" feel. The world upside down!
Brooklyn is a perfectly affordable and reasonable place to live if you stop caring about things like Williamsburg, the “art” community, and having a small batch brewery nearby.
Forget north Brooklyn entirely— settle in one of the vibrant, safe, well groomed immigrant/working class communities deeper into the borough. Dyker heights, midwood, bay ridge, Bensonhurst. Why are those never covered in the NYT?
So tired of clueless people from the Midwest thinking they belong in BK cause they have an ankle tattoo and majored in art history.
58
1) These neighbourhoods are only affordable if you compare them to Brooklyn (or Manhattan). They are not cheap. Not just a detail: it actually matters.
2) Many people live in Williamsburg because it it is an easy commute to Manhattan. Not because, unlike you, they think their ankle tattoo matters.
3) Don't think disparaging people from the Midwest (or from outside New York) makes you cool.
10
Dyker Heights, Midwood, Bay Ridge and Bensonhurst are not working class neighborhoods. They are at the high end of middle class.
6
No ankle tattoo, no art history degree. But I coulnd't agree more that I don't belong in Brooklyn. My condo in beautiful Portland, according to the article, with lots of space, mountain views, is cheaper than a one bedroom there. Hey, come on out. We have real artists, musicians, technologists and few snow storms.
1
When the L train goes down next year it will get even worse for the landlords here in Williamsburg where more vacant storefronts appear each month, and I couldn't be happier. Especially since these developers have foisted the most charmless dreck on us. I trust they won't only lose their shirts but their pants as well!
45
If landlords have trouble filling these rentals, it's because they demand the same documentation one would provide for buying a house. And in addition, tenants need a near-spotless credit record. How many people meet these stringent requirements? And the rents are too high.
30
and your income needs to be 40 times the rent. That is the formula. so if an apartment rents for $4,000, your income needs to be $160,000 or you do not get to first base.
15
In my experience, most large developers don't stick to that 40 times rent rule -- they will take a couple extra months security deposit or a guarantee from your parents. I know that's what they do in my large, but old, Manhattan building because it is getting really difficult for these buildings to find tenants with all the new buildings offering so many more amenities.
8
I had no issue renting in a development like the ones featured here (albeit 9 years old) and the paperwork was pretty standard.
2
There are a lot of vacant units in these new towers but landlords will not lower rents. they will offer a month free or offer an upgrade of kitchen appliances but the rent remains sky-high. The units are for the most part small but in the New York market are considered "luxury". You have to make a lot of money to live in one of these. you can also win an apartment lottery for one of the few "affordable" apartments but to be eligible your income has to be below a set number. Trouble is that for many people, income is too high to qualify for affordable units but not nearly high enough to rent one of the "luxury" units upstairs.
26
Most of the "affordable" units that are being built are for low income people (like under $30k or so for a one person household).Although there is provision in the law for them, practically no "affordable" units are being made available for "middle" income people with maybe $60-$70k incomes. There is no housing being built for middle income seniors. And there are no more Mitchell-Lama co-ops being built for middle income families
5
“There are a lot of vacant units in these new towers but landlords will not lower rents. they will offer a month free or offer an upgrade of kitchen appliances but the rent remains sky-high.”
You did not understand that part of the article: free rent for a month, free parking, free washing machines or free Taco Bell is the exact same thing as lowering rents. They only do that rather than directly decreasing the rent to hide (from statistics notably) the fact that demand is not very strong for that level of price. This is a very common practice in commercial real estate.
3
@Bob that is not exactly the same thing as lowering the rent. The future rent increase will be based on the rent amount without deducting for the incentive.
7
Area Median Income. I love how the real estate people and de Blasio can insist that renting apartments to people that make 130% or more of the Area Median Income somehow makes it affordable. You are renting to people that make MORE money not less! Doesn't that make it UNAFFORDABLE??
35
AMI is irrelevant when the cost of living is so high.
2
It would seem to me that the lottery process is a trove of information that should inform our Mayor on what real New York workers can really afford and what we need him incentivize the construction industry to build. We don't need lotteries. We need entire complexes built with the intention that will be and will remain affordable middle class housing. We did it with Stuvensant Town, Parkchester, Rochdale Village etc. Why can't we do that now when the need has never been so great?
71
I couldn't agree more. I had hoped this mayor would have, or would find someone who had, the vision to perhaps create something along the lines of cities within cities that would attract many types of people to pleasant, thoughtfully planned, surroundings. They've done it in other countries. They can't even add some urgency to add a couple more Metro North stops in the northeast Bronx to make that area more appealing to developers.
15
That's called public housing. We tried that and both parties abandoned it for the neoliberal inclusionary housing scam.
2
Not just public housing. We had a great Mitchell-Lama housing program in the 1960's and 70's that created tens of thousands of affordable apartments. In return for tax abatements, landlords agreed to charge reasonable rents and one couldn't earn more than 7x their annual rent.
My parent moved into one such building and a 3-bedroom apartment, including gas, electricity, parking and a swimming pool rented for the equivalent of $1635/mo in current dollars. There were many co-ops that one could buy for around $5000 back in the 60's and that could not be sold for a huge profit.
The problem is that the State permitted landlords to buy their way out of the program and all those formerly affordable apartments are now market rate condos, co-ops and rental apartments, squeezing out the working- and middle-classes.
3
No mention of how all this development affects the quality of life of those already living here. Brooklyn is already too crowded. We don’t need any more new development, especially high rises. Why is everything approved. The 3 story brownstone next to mine is squeezing 6 apartments into it. How is this possible?
Enough already.
37
You live in a major city, not Kansas.
11
I'm with you Eric..Brooklyn is now a joke, everyone and their dog is being shoe horned into the borough. You can't even walk down the street it's so crowded with people from other places who want to be hip "Brooklynites". The noise and pollution from construction is nauseating. Make Brooklyn great again, no more people.
20
It would be nice you spoke about 20 year tax abatements that most of these developers enjoy. They forever change the face of existing neighborhoods - blocking sky and light... displace residents who have lived through the bad ol' years, and don't even pay into our tax base, let alone participate in upgrading infrastructure to accommodate adding so many more thousands more people into an already strained system.
98
I was recently shocked when reading something about a new and very very expensive condo development in Manhattan that it had these abatements and was using them as a marketing tool.
8
Tax breaks are stupid and in this case clearly end up helping the wrong people.
However opposing new developments and the ol’ timers is stupid: ten stories of studios costing $3,000 a month to rent, that’s ten stories of people who won’t spend these $3,000 outpricing the ol’ timers elsewhere. That is clearly positive for prices elsewhere in the area (meaning it is pushing them down).
The article is actually explaining that when enough of these new developments are built, prices actually start to decline (landlords offer rebates), and that places that are supposed to be below market price actually don’t find takes. Now is actually the time to encourage more of these developments, to flood the market and make sure prices fall.
1
Readers would be well served if there were a chart or 2 - because more "specifics" would probably make the numeric part even more opaque.
When it is written that apartments are reserved for people making 130% of the area median income, they might as well say that the apts. cost however many million rupees per month. What, say, CAN a family of 4 with 2 earners bringing in $80K/year AFFORD? How does that compare to what diBlasio's program is producing?
Ms. Bellafante's fine articles about "affordable housing" - one of which points out that sleazy developers are now listing units on AirBNB - are a step in the right direction.
It's great that we learn of an actor who "won the lottery," but when 90,000 people apply (and there now appear to be sherpas making this something more than buying a lottery ticket) for a handful of apartments, common sense says that there's not a shortage - there's a crisis.
London is thinking about going after the kleptocrat billionaires who have bought up real estate there. Isn't it high time that NYC reconsiders the "open door" policy to LLC's. How come our Mayor - not bashful when running for the job the first time to pander to everyone "middle class" or lower - doesn't target people who may be loved by restaurants and real estate brokers, but who are central to the growing disparity between rich and poor? (Answer - he's bought and paid for by REBNY.) The city is helping create a bubble, sacrificing current and future revenues for PR porridge.
53
Actually, my understanding is that most of the "affordable" units coming on the market are not for people making 130% of area median income, but those making substantially less. Although there is provision for apts for middle/moderate income people, most of the units coming on the market are for low and very low income people
1
Actually, this phenomenon is really problematic in desirable cities where foreign investors have bought and driven up real estate prices as a place to park their ill-gotten gains. London has so many absentee owners Mayfair was described by one long time resident as nearly a ghost town in the off season. Also, worth noting that the lack of affordable housing is an issue everywhere. The luxury market is booming, increasing prices of new construction, and I anticipate another meltdown as we regular humans run out of money. I'm guessing 90% of new building is for the top 20%. Wonder how much longer millennials (and boomers) will be willing to sacrifice a life for a place to live?
12