NYC Construction Goes Through the Roof | Rent-to-Own H​omes Make a Comeback

Photo credit: John Taggart for The Wall Street Journal

1. Construction in New York City Goes Through The Roof “New York City is entering what could be the biggest building boom in a generation, census figures show, as work gets under way on hundreds of residential projects in neighborhoods across the city. In the first six months of the year, developers received new residential building permits for 42,088 apartments and houses in the city, according to the U.S. Census Bureau, already more than in any full year since 1963, when nearly 50,000 permits were issued. The surge in permits this year followed a rush by developers to start foundation work on many residential projects by June 15, in time to qualify for a valuable property-tax abatement that was scheduled to expire.” [Wall Street Journal – 07/29/15]
2. Rent-to-Own Homes Make a Comeback “Wall Street firms have found a new way to profit from consumers with blemished credit who can’t qualify for a mortgage: let them rent a home first with the option to buy it later. Rent-to-own programs, once run mainly by small operators, were popular with cash-strapped consumers during the 1990s. They faded a decade later when easy lending made it possible for almost anyone to buy a home with no money down, but with lenders setting a higher bar, they are making a comeback. For investors, it is a chance to profit off the recovering housing market. Consumers get a chance to lock in a home before they have the money together for a down payment. But the price may be higher rent in the interim and a higher purchase price the longer they wait to move from renting to owning.” [Wall Street Journal – 07/28/15]
3. How the de Blasio Administration Spurred Record Affordable-Housing Gains “Not even halfway through his first term, New York’s populist mayor is surprising his many skeptics by making headway on his top—and likely toughest—policy goal. Having pledged to build or preserve affordable housing on the unprecedented scale and pace of 200,000 units over 10 years, Bill de Blasio strode to the podium at a Bronx housing project July 13 to announce he’d made a good start. He trumpeted a near-record total of 20,325 affordable units either built or preserved in the fiscal year that had ended two weeks earlier. Even better, that tally included 8,500 new apartments, the highest annual number since records started being kept nearly 40 years ago. Housing experts note that the gains came not from Mr. de Blasio’s famously high-minded rhetoric, but from nuts-and-bolts adjustments to the city’s housing machinery.” [Crain’s New York Business – 07/28/15]
4. Residents and Activists Rally For More Affordable Housing in Jamaica “As new developments start to change Jamaica, locals rallied Tuesday for more affordable housing and policies that would protect the local community. Roughly 150 residents, activists and faith leaders gathered at the Greater Allen AME Cathedral of New York, a congregation led by former Rep. Rev. Floyd Flake. They later marched along Merrick Boulevard to a crumbling garage used by the NYPD at 168th Street and Archer Avenue, which the city plans to replace with a mixed-use building. The project is one of several major developments planned for downtown Jamaica in the near future, after 368 blocks in the area had been rezoned in 2007 to allow developers to construct larger buildings.” [DNAinfo – 07/29/15]
5. Millennials Less Likely to Leave the Nest, a Pew Study Finds “During the recession near the end of the last decade, many young adults facing a dreadful job market moved in with their parents to save money. Now, jobs may be more plentiful and the economy has improved, but many members of the millennial generation have yet to leave the nest, according to a new study. In fact, even more of them are living at home now. An analysis of census data by the Pew Research Center has found that 18- to 34-year-olds are less likely to be living apart from family members than they were even during the depths of the recent recession, the worst economic downturn since the 1930s.” [New York Times – 07/29/15]
6. A Harlem Tenement Was Her Neighborhood “Sometime in the next year, my childhood home is going to disappear. The building where I was raised, 602 West 132nd Street, is being torn down to make room for Columbia University’s $6 billion Manhattanville campus expansion. The building may not look like much — it’s a lonely six-story brick tenement sandwiched between a U-Haul warehouse and what used to be the Madame Alexander doll factory, across the street from a bus depot. But to me and my childhood neighbors, it was our world.” [New York Times – 07/29/15]
7. New York Ranks Low with Millennials Aiming to Buy a Home: Survey “Big Apple millennials are less likely than those in most other U.S. cities to buy a home in the near future, a survey released Tuesday found. Apartment List, a San Francisco-based real estate group, ranked 34 cities based on the percentage of people between 18 and 34 who said they were looking to buy a home and the New York metro area came in at 26th. Although the national average for millennials is 74%, only 68% of New Yorkers in that age group plan on purchasing a home and 10% expect to always rent, according to the survey. Experts say this attitude could have long-term effects for the city as those young adults who pine for home ownership can take their talent and money to other places.” [amNewYork – 07/29/15]
8. Battle Brewing Over Proposed Changes to City Parking Rules “LiveOn in a recent report surveyed 191 parking lots associated with federally funded senior housing across the five boroughs and identified 39 parcels that are underused and could be turned into new apartments for the city’s growing gray population. The report cheers the efforts of the de Blasio administration to eliminate parking requirements that have long been imposed on new residential housing—a move that would permit they city’s senior housing operators to convert underused parking lots to residential use. According to LiveOn, the 39 sites it identified ‘could support an estimated 2,000 new affordable senior housing units.’” [CityLimits – 07/28/15]
9. Midtown East Officials Seek Limits on Residential Building “In an effort to prevent the once-glamorous office district dubbed Midtown East from going the way of pied-a-terre studded 57th Street, the committee tasked with charting its future is proposing measures that would restrict residential development there. Its rationale: Any sort of new housing built in one of the island’s priciest real estate markets would, of necessity, be affordable only to people who are outrageously wealthy. ‘Providing housing for Russian oligarchs is not what we were after here,’ said Dan Garodnick, the councilman who represents east Midtown and co-chairs the East Midtown Steering Committee. While the one of the committee’s principal recommendations is that owners of the neighorhood’s landmarked buildings be able to sell unused development rights district-wide, rather than just to the owners of adjacent parcels, the committee doesn’t want residential developers to be able to partake.” [Capital NY – 07/29/15]
10. Construction Underway on New Rockrose Tower as $270M Loan Closes “Rockrose Development Corp. has completed a $270 million construction financing for its 974-unit 80/20 rental apartment tower complex at 43-25 Hunter Street in the Court Square section of Long Island City, Queens. Rockrose negotiated directly with the lead bank lender, Wells Fargo, together with TD Bank and Capital One for the multi-bank loan. The loan was made possible through the sale directly to the banks of a mix of tax exempt and taxable bonds issued by the New York State Housing Finance Agency. 43-25 Hunter Street will comprise two adjoining towers, one 14 stories and one 50 stories.  Under the State’s 421a tax incentive program, 195 apartments (or 20 percent) will be set aside as affordable for a period of 30 years for renters earning up to 60 percent of the area median income (AMI). The balance will be rent-stabilized market rate units.” [Real Estate Weekly – 07/30/15]