Rampant Gentrification Was The Main Real Estate Trend For NYC In 2016
No neighborhood seems to be left untouched by rising house prices and an influx of people who could afford them.
For most New Yorkers, real estate was about one thing in 2016—gentrification. It was impossible to escape. Every working class or once blighted neighborhood from the South Bronx to Coney Island, Corona to Newark was on the developer’s radar. Prices around the Tri-State area continued to their ascent into the clouds—while artisanal coffee shops and yoga studios sprouted like bacteria on room temperature Canadian beef. How did it happen and is it likely to end?
Foreign investors, hedge fund titans, and just plain old rich folk (business CEO’s and the like) are in part to blame—as they continued to pay silly money for posh pads in Manhattan. That played a major role in keeping New York City’s prices at a place that mere mortals could hardly imagine, let afford. Manhattanites funneled out of the city, looking for cheaper rents and purchase prices, and spread their wings into Brooklyn, Queens, The Bronx and beyond.
The result was some of the most dramatic price increases we’ve seen in recent years. Two townhouses on the same Dean Street block between Nostrand and New York Avenues sold for $2 million or more, breaking the once violence-ridden neighborhood’s glass ceiling of sales and putting it in the flight path as a first choice landing strip for those wishing to escape the city.
“The net effect of the 2013-2014 high end condominium market boom in Manhattan has created a surge in the niche townhouse market where the purchase of a million dollar property plus renovation is the name of the game,” said Doug Bowen, the Douglas Elliman broker who sold 1201 Dean Street for $2.16 million in July.
Corcoran broker Jessica Buchman concurred: “Wealthy people from Manhattan buy the brownstone townhouses as status symbols. I’ve seen it. They’re the couple with the labradoodle, the fancy car, two children,” she said. “They have good jobs. Both parents are making well into the six figures and the house is like something on their checklist.”
Part of the appeal of a brownstone is their limited availability. For others who prefer to buy something new rather than old for million dollar or more, Long Island City in Queens has emerged as a glistening mini Dubai with tower upon tower, hotels, and office spaces reaching into the heavens.
“I think a lot of people are surprised to find out how close Long Island City is from Manhattan.” agent Mary Beth McGill with Modern Paces stated. “You can be at Grand Central in three minutes. The next stop is Bryant Park, and then you’re in Times Square. But then there’s also the quiet neighborhood feel of it. When I walk buyers down to the park on the waterfront I love looking at their expressions.”
One of the most contentious gentrification issues was de Blasio’s rezoning agenda. Touted as a way to create affordable housing poorer areas like East New York and East Harlem, opponents claimed that is was, in fact, a way to speed up gentrification in those neighborhoods. Developers and city workers disagreed.
“If you did nothing, gentrification would actually accelerate in East New York,” said Meredith Marshall, co-founder of the development firm BRP Companies at a council meeting in March.
Legal Services NYC Deputy Housing Director Luis Henriquez, who overseas tenant lawyers concurred. “We have spoken about gentrification in East New York as a future thing, but it’s something we are seeing now as housing lawyers,” he said.
And lest we forget the Bronx, Somerset Partners and the Chetrit Group bought old warehouses along an industrial stretch of the Harlem River Water Front and came under fire for branding the area The Piano District, which it has since backed away from. They do, however, have plans for six residential towers and various restaurants. With numerous other developments on the docket the South Bronx, and a small Hudson Yards type project in the works, the gritty birthplace of hip-hop may one day be unrecognizable
Gentrification will continue to be an issue for New Yorkers in 2017. An increase in interest rates could slow it a little—but the new government’s looser restrictions on lending could put us in a similar position we were in eight years ago, when the interest rates were still higher than they are now. Whatever the outcome, one thing will be certain, “affordable” and “housing” in the same sentence will remain a fantasy for most New Yorkers.
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