The Brooklyn economy is doing great, thanks to increasing population and jobs, according to a sweeping economic report released last week by the Brooklyn Chamber of Commerce.
Brooklyn added thousands of jobs last year, an increase of 5.8 percent, and in just one or two years may have more residents than Chicago, the third-largest city in the U.S.
“We’re growing,” Brooklyn Chamber of Commerce President and CEO Carlo Scissura told Brownstoner. “In a year or two, we will have more population living here than in Chicago. The trends show a good future for our population.” (more…)
Federal Reserve Chairman Janet Yellen and Macon Street brownstones. Photo via Federal Reserve
The Federal Reserve Board this afternoon announced it will hold off taking action to raise short-term interest rates — so for now, expect the Brooklyn real estate boom to continue.
But when and if the Fed does raise the interest rate, it’s unlikely to put much of a damper on Brooklyn real estate, mortgage broker Adam Dahill told Brownstoner.
“People buying now in Brooklyn are well qualified and not that sensitive to interest rates,” he said. “I’m very bullish on Brooklyn.” The one big change he does see coming is that formerly “fringe” areas will continue to increase in value, while price appreciation in “prime” areas will slow. (more…)
Gabriel Koren’s story sounds all too familiar. The 68-year-old artist — lauded for making public sculptures of African American luminaries like Frederick Douglass and Malcolm X — has been priced out of her Dumbo workspace with nowhere else to go, according to an article in Sunday’s New York Times.
But for Brownstoner, Koren’s story hits close to home. The studio she’s kept for the past 28 years is just one floor above our office at 68 Jay Street. When we visited her yesterday afternoon, Koren was overwhelmed by the response to the Times article.
“So many people call. I am very thankful that so many people are calling,” she told Brownstoner. Koren is still listening to her many voicemail messages. She welcomed the possibility of help.
Are high levels of ownership good or bad for cities? Should the government push for more home ownership? What role do rental units play in the growth and vitality of cities?
Journalist and web developer, Ken Schwencke, who also works for The New York Times, has added to the discussion of some of those questions by creating a nation-wide interactive map that shows renters and owners across the country. To build the map, he spent some serious time with the US Census Bureau’s 2013 American Community Survey data, zeroing in on home ownership.
The red dots on his map represent renters, the blue dots, owners. Each dot represents 25 housing units, and they are placed randomly within a census tract — an area of about four to eight blocks in Brooklyn.
Despite the frenzied housing market in Brooklyn over the last decade, the rate of home ownership has changed little. New York is a city of renters and Brooklyn is a borough of renters, as is made clear by the vast swaths of red in the map above.
According to the New York Housing and Vacancy Survey of 2014 (PDF), Brooklyn’s home ownership rate is 29 percent, higher than Manhattan and the Bronx but lower than the city average and far below the national average of 63.4 percent. City-wide, the total number of owner-occupied units is up slightly from the previous year.
Today the national home ownership rate is at its lowest point since 1967. But for cities a low home ownership rate may not be a bad thing.
Cities in general have low levels of home ownership. And some of those that have seen the most economic growth recently have very low levels of home ownership.
As we all know, Brooklyn’s become a boomtown for creative dreamers and makers. Now, a study from the Center for an Urban Future has confirmed and quantified the artsy influx.
CUF is a think tank and master of urban stats (we’ve written abouttheir workbefore) so you can look forward to hearing these figures merrily repeated by pro-art policy makers in the months to come. The report was already cited at least twice at last week’s Make It In Brooklyn Summit, though not by Bruce Ratner.
The economists have spoken. If you don’t allow your 125-year-old brownstone to be torn down to make room for high-rise apartments, then you hate America.
Or that’s what you might think if you’d read recent stories by New York Magazine, WNYC, and The Real Deal. According to them, a new study by economists Chang-Tai Hsieh of University of Chicago and Enrico Moretti of University of California, Berkeley can be boiled down to one sentence: “Brownstones cost the economy billions.”
The argument is that the entire U.S. economy would be 9.5 percent bigger if just three cities — New York, San Francisco, and San Jose — increased their housing stocks by knocking down their Brooklyn brownstones and historic San Francisco Victorians, and putting up high-rise condos in their places.
Only that’s not at all what the study said. (more…)
The Fed Reserve has been warning for years it plans to raise interest rates, but never follows through on the plan. It gets scared because the economy doesn’t look good, and then backs off. The Fed warned yesterday that it could raise rates in June.
Just the warning could send folks running to brokers to refinance (again) or buy something asap. If the Fed were really to do it, it could depress home prices — or more.
Brooklyn is the “least affordable” home market in the country, followed by San Francisco and Manhattan, in that order. “A resident would need to devote 98 percent of the median income to afford the payment on a median-priced home of $615,000,” reported Bloomberg News.
The story made headlines and confirmed what many of us living here already suspected.
The affordability problem is part of a bigger trend where “one in five U.S. housing markets are now less affordable than their historic average,” said Bloomberg, as housing prices keep climbing even while income stagnates.
Real estate investors and foreign buyers have been fueling the price gains in parts of the country where housing costs are already high, locking locals into high-priced rentals because they can’t afford to buy, in a vicious cycle, said the story.
Across the country, housing prices are up 25 percent since their February 2012 nadir, according to the S&P/Case-Shiller index.
“Incomes have not grown nearly as fast as home prices,” the story quoted an exec from RealtyTrac as saying. “That disconnected home-price growth has been driven by investors and other cash buyers who aren’t as constrained by income.”
Rents have risen significantly in Brooklyn, where the median rent was $2,858 as of October. That’s an increase of nearly 6 percent vs. the same month a year ago, according to data from Miller Samuel and Douglas Elliman cited in the story.
Of course, comparing the median income of a region to the median house price is only one way to measure affordability. It reflects the variability of incomes in an area as well as home prices.
But even as home prices climb in Brooklyn, across the U.S. they have cooled off slightly in recent months, according to published reports, and quite a few REITS — investor backed real estate investment firms — have in the past year said they are pulling back from buying rental properties or getting out of the rental business in the U.S. altogether.
Not big Brooklyn buyer Dixon though! We just heard from Dixon Advisory USA Managing Director and CEO Alan Dixon this morning. He is off to Australia tomorrow to raise another round of funding for company’s next investments here in the tri-state area.
As for prices of townhouses in Brooklyn specifically, they continue to rise, according to the most recently recorded sales. New records were set in both Park Slope and Bed Stuy in recent weeks, as we reported yesterday. We have heard scattered reports of fewer people attending open houses and noticed fewer desirable properties on the market but we guess that’s just the usual seasonal slowdown. So far we’ve seen no sign of actual closed sale prices declining.
Hey, look, here on October 25, 2004, we predicted the coming crash! OK, well, the post, titled “It’s All About the Interest Rates, Stupid,” was actually a reblog of a New York Times story that predicted the coming crash. Still.
The real problem lurking below the surface of the real estate market, according to The New York Times, is the large number of the adjustable rate mortgages (ARMs) and interest-only loans that people have taken over the past couple of years to enable them to afford the monthly payments on the increasingly expensive homes they are buying. If rates do rise a few percentage points over the next couple of years, a lot of these folks could find themselves unable to make their payments. But The Donald isn’t too worried: “I just don’t think that the politicians can allow the rates to go up because then the economy beyond real estate will tank.”
This week we have received notice of not one but two panels on gentrification and real estate in Brooklyn. After a year of rapid price escalation in Brooklyn, “housing matters are on the minds of all Brooklyn residents,” said the Rev. John E. Denaro, Rector of St. Ann & the Holy Trinity Church, which is hosting one of the events. “We are pleased to explore this urgent topic with guests who are asking the hard questions about the future of our beloved borough.”
The first event, hosted by two Corcoran agents, is specifically focused on Bed Stuy and has some very heavy hitters planned for the lineup. Brooklyn Borough President Eric Adams will speak. Columbia professor of Urban Planning Lance Freeman will keynote. If you have read anything about gentrification, you will know Freeman has published what may be the definitive work on the topic, “There Goes the Hood: Views of Gentrification from the Ground Up,” an ethnographic study of gentrification in Clinton Hill and Harlem that outlines the good and the bad effects of gentrification through interviews with long-term residents of both neighborhoods. He is most famous for a study that showed people move in and out of poor neighborhoods as often as they do in gentrifying ones.
Panelists include President and CEO of Bridge Street Development Corp. Emilio Dorcely, Community Board 3 Chair Tremaine Wright, Council Member Robert Cornegy, Richard Flateau of Flateau Realty Corp. and Brownstoners of Bedford-Stuyvesant President Ava Barnett. The event will “explore current trends and future growth possibilities” in Bed Stuy “and how the public can benefit from these new opportunities,” said the email.
It will take place Saturday, June 21, from 9 am to noon at the Nazarene Congregational Church at 506 MacDonough Street. Breakfast will be served. Seating is limited so please RSVP to 718-765-3732 or email@example.com before June 19.
The second panel, “Brooklyn Housing Matters: Tackling Affordability,” is billed as a “public forum on housing issues, initiatives and prospects.” Hosted by The Forum @ St. Ann’s, the panel will be moderated by New York Public Radio urban policy reporter Cindy Rodriguez. Panelists include Council Member Stephen Levin; Caitlyn Brazil, VP of Strategic Partnerships of CAMBA, a housing nonprofit; and Aaron Koffman, Director of Affordable Housing for developer Hudson Companies.
The panel will explore how Brooklyn “can preserve the qualities and diversity that make it distinct, as the borough develops as an epicenter of world culture,” said the email we received. “Brooklyn’s special character, cultural vibrancy, and quality of life have attracted global attention. With it has come dramatic and rapid change. Residents are seeing their neighborhoods change so fast that they hardly recognize their surroundings, often cannot benefit from improvements and feel shut out or alienated on their own turf. What are we losing in the process? The key to it all is housing. As New York’s new mayor and developers pursue common ground on conflicting housing priorities, retaining the rich flavor and uniqueness of Brooklyn will be challenging.”
Panelists will cover “the definition of affordability…the housing needs and prospects of those who are evicted, foreclosed, displaced, unemployed, elderly or disabled, how to honor the character of neighborhoods marked for development, and how to retain community cohesion while gentrification significantly alters the traditional resident profile.”
The community forum takes place Thursday, June 24 at 7 pm at St. Ann’s the Holy Trinity Church in Brooklyn Heights. For more information, check out St. Ann’s event page.
The Mayor, Brooklyn Borough President Eric Adams and a bunch of other pols gathered at Brooklyn Brewery for a press conference this morning about the economic success of Brooklyn. The borough leads New York City in economic growth, according to a report out today from the office of the comptroller. Since 2003, the number of businesses in the borough has grown by 21 percent, a much faster pace than in the rest of New York City.
While health care and social assistance employ the most, accounting for one-third of all Brooklyn jobs in 2012, leisure and hospitality are growing the most quickly, increasing 36 percent between 2008 and 2012 — or nearly 10,000 jobs, most of them in restaurants and bars.
“Educated young people have been pouring into Brooklyn for the past two decades, and they responded to the 2008 recession by starting businesses in the food, beverage, media and tech sectors,” said Brooklyn Brewery cofounder Steve Hindy at the press conference. “There now is a vibrant economy in Brooklyn and an educated workforce finding new opportunities.”
Manufacturing in the borough is on the rebound, thanks mostly to the food business. In 2012, “for the first time in decades,” according to a press release, the number of manufacturing jobs in the borough rose rather than fell. The number increased by 2.5 percent, or 19,910 jobs.
Young people, immigrants and others are flocking here, drawn by “world-class cultural and academic institutions…many restaurants, growing nightlife and diverse neighborhoods,” said the report. Challenges include recovery from Hurricane Sandy, unemployment and the high cost of housing.
The report also singled out four significant developments in the borough: The Downtown Brooklyn Cultural District, the redevelopment of the Domino Sugar factory, the Livonia Commons Project in East New York and the redevelopment of the Loew’s Kings Theater on Flatbush Avenue.