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Housing Starts: Rent Up, Income Down | Banking on Gentrification | Local Real Estate, Foreign Money

Housing Starts | July 3rd 2014

One57, on West 57th Street, where a penthouse is reportedly in contract for $90 million.  (Photo: New York Magazine)

  1. How Rising Rents, Falling Incomes Crush Communities. “Garrado Odigie sat sobbing in his chair. He’d gotten the most important thing to him in his life, and it meant his life was falling apart. Four months earlier his long, drawn out, international custody battle for his children had finally ended. After several years of separation, his children had been returned to him. All of them, ages 5 to 14. To his one bedroom apartment in Flushing. Odigie says he’s been looking for a two or three bedroom in his area of Brooklyn, but most places ask for around $2,000. ‘I cannot afford that right now.’ In fact, he can’t afford his current rent either now. The rent is a little over $1,000 a month, half of his annual income. A single father accustomed to working two to three jobs late into the evening when his children weren’t with him, Odigie found he needed to quit one job and reduce his hours at the other if he was to take them to therapy, go with them to the doctor’s, or to simply spend time with them.” [Marketplace – 06/30/14]
  2. Sources: de Blasio Aide Pushed Rent Increase. “In the weeks prior to the June 23 vote, one of Mayor de Blasio’s top aides was urging the board’s members to reject a freeze and approve a historically low increase, according to half a dozen sources, including several board members. Deputy Mayor Alicia Glen, who had been publicly skeptical of a freeze, spoke to at least two board members about an increase, but reversed course after Mr. de Blasio made clear late in the process that he opposed one, these sources said.” [Crain’s New York Business – 07/02/14]
  3. Banking on Gentrification: Small-Time Investors Seek to Profit From Rising Rents. “CityShares, a new investment platform, buys up multifamily properties in ‘appreciating,’ neighborhoods, and any accredited investor can try to get in on the always-rising rental prices in New York City. Now those who’ve recently received a salary over $200,000 per annuum, or have more than $1 million at their disposal outside of the value of a primary residence (parameters decided upon by the Feds), can capitalize further on those poor pitiful wage slaves who became social workers, teachers, civil servants, academics and journalists.” [New York Observer – 07/01/14]
  4. Stash Pad: The New York Real-Estate Market is Now the Premier Destination for Wealthy Foreigners with Rubles, Yuan, and Dollars to Hide. “According to data compiled by the firm PropertyShark, since 2008, roughly 30 percent of condo sales in large-scale Manhattan developments have been to purchasers who either listed an overseas address or bought through an entity like a limited-liability corporation, a tactic rarely employed by local homebuyers but favored by foreign investors. Similarly, the firm Corcoran Sunshine, which markets luxury buildings, estimates that 35 percent of its sales since 2013 have been to international buyers, half from Asia, with the remainder roughly evenly split among Latin America, Europe, and the rest of the world. ‘The global elite,’ says developer Michael Stern, ‘is basically looking for a safe-deposit box.’” [New York Magazine – 06/29/14]
  5. Bargains with a ‘But’: Affordable New York Apartments With a Catch. “In this extremely tight real estate market, when practically any listing is snapped up instantly, why are some of the city’s most affordable apartments struggling to find buyers? It’s because they belong to a small and quirky breed of co-op that requires buyers to meet income caps, yet have significant assets on hand — a tall order for most.”  [New York Times – 06/27/14]
  6. Buffalo’s Housing Market Ranked Most Stable in Nation “According to a new analysis by a national housing research firm done for Bloomberg.com, Buffalo has the most stable housing market in the nation over the last 35 years, with virtually no chance of loss for homeowners overall during that time.The study of average home price data by Zillow found Buffalo beat out the 49 other largest metropolitan areas in the country for having the least risky real estate market since 1979. That’s based on an examination of over 117 rolling five-year periods since then, with Buffalo tallying the lowest percentage – estimated at zero – of those periods with negative returns.” [Buffalo News – 06/30/14]
  7. Landlord-Tenant Battles Hit Pause. “The annual battle over regulated rents for a million tenants in New York City highlights what seems to be a permanent state of war: Tenants want rent reductions, while landlords say they won’t be able to pay their bills.But data collected by the staff of city’s rent-setting agency, the Rent Guidelines Board, show that day-to-day landlord-tenant conflicts may be cooling. The number of tenant complaints filed against landlords with the state are down 19% in the 12 months ended March 31 from the number filed in the 12 months ended four years earlier, and down 9% from complaints filed in the 12 months ended March 31, 2013.” [Wall Street Journal – 07/01/14]
  8. New York’s Shadow Transit. “In 1980, when a transit strike halted buses and subway trains throughout New York’s five boroughs, residents in some of the most marooned parts of the city started using their own cars and vans to pick people up, charging a dollar to shuttle them to their destinations. Eleven days later, the strike ended, but the cars and vans drove on, finding huge demand in neighborhoods that weren’t well served by public transit even when buses and trains were running. The drivers eventually expanded their businesses, using thirteen-seat vans to create routes in places like Flatbush, Jamaica, Far Rockaway, and downtown Brooklyn. Today, dollar vans and other unofficial shuttles make up a thriving shadow transportation system that operates where subways and buses don’t—mostly in peripheral, low-income neighborhoods that contain large immigrant communities and lack robust public transit. The informal transportation networks fill that void with frequent departures and dependable schedules, but they lack service maps, posted timetables, and official stations or stops. There is no Web site or kiosk to help you navigate them. Instead, riders come to know these networks through conversations with friends and neighbors, or from happening upon the vans in the street.” [The New Yorker – 07/01/14]
  9. Can Atlantic Ave Become a Great Street? “Atlantic Avenue is one of the most prominent streets in Brooklyn, but it’s also one of the most dangerous. The major thoroughfare, paralleled by the LIRR and a subway line just two blocks away, remains a barrier between neighborhoods, plagued by speeding traffic and lined with auto body shops. Can it become an urban street that welcomes people instead of repelling them? The Department of City Planning is going to look at the possibilities along 2.4 miles of Atlantic Avenue.” [Streetsblog – 07/01/14]
  10. Working With Grassroots Organizing Groups, Ras Baraka, Newark’s Mayor-Elect, Takes Steps To Help Homeowners. “Newark’s mayor-elect Ras Baraka has taken a bold step to address one of the city’s and nation’s most serious crises. On May 20th, Baraka persuaded his city council colleagues to adopt a resolution that will help an estimated one thousand homeowners save their homes from foreclosure. It would give the city legal authority to protect homeowners trapped in underwater mortgages—where their payment balances are higher than the fair market value of the property.” [Huffington Post – 06/30/14]
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