A dramatic surge in sale prices and rents is causing change and displacement at a head-spinning pace in Crown Heights, Bed Stuy, Bushwick and other neighborhoods in Brooklyn, according to a story in Bloomberg. Buyers with more than a million to spend are choosing to buy whole houses in Crown Heights and similar neighborhoods rather than cramped apartments elsewhere. The story said:
Young buyers and renters who can no longer afford such established communities as Fort Greene, Park Slope and Williamsburg are moving to Crown Heights, Bedford Stuyvesant and Bushwick, bidding against investors for townhomes that have been neglected for decades. Longtime tenants too poor to afford the new rents in the predominantly black districts are moving out to less-well connected, more dangerous places.
We were particularly struck by this stark — and potentially depressing, depending on your situation — description of the wealth now required to buy in much of Brooklyn:
Families with children are increasingly choosing to stay in New York City and if they don’t have millions to spend, their options are limited, said Kathleen Perkins, a Realtor at Douglas Elliman Real Estate who helped the Katzes find their Crown Heights townhouse. “My cheapest house for sale in Fort Greene/Clinton Hill is $2,500,000,” Perkins said. “If you have $1,500,000 and you’re my client, I’m driving you to Bed Stuy or Crown Heights.”
The story is pitch-perfect, in our opinion, in its overview of what is happening here and why, even though none of it will be news to regular readers of Brownstoner. Does it ring true to you?
This weekend The New York Times real estate section looked at people who are finding themselves priced out of Brooklyn. No doubt this has been going on for ages, but the story points to some pricing trends that show that real estate in Brooklyn, or at least in the most expensive north and western neighborhoods (from Red Hook north to Greenpoint and Gowanus and Park Slope) is quickly accelerating towards Manhattan pricing, particularly since the financial crisis in 2008.
According to the story, in the second quarter of this year there were 107 sales over $2 million in these neighborhoods, more than any other quarter. Since 2008 the median sales price has inched 33 percent closer to the median sales price in Manhattan–now $575,000 in Brooklyn versus $910,000 in Manhattan. Five years ago median rental price in these parts of Brooklyn was $1,030 cheaper than in Manhattan. Now it is only $353 cheaper. (more…)
Longtime Brooklynite and Brownstoner reader Heather Murray recently moved from Clinton Hill to Washington, D.C., because of a job change. But the Brooklyn she misses was already history before she left. She writes:
I’ve always loved places with history — and Brooklyn used to be such a place. Old lived easily alongside the new. People had rent control and rent stabilization, which meant –- pretty much –- that if you stayed in one place for long enough, you could build a nice life there.
But Brooklyn has changed. I’m stating the obvious, but that’s what I do.
Brooklyn used to be a place where you could step back in time. Parts of the city seemed to be completely unchanged from the ’20s, the ’30s, the ’40s, the ’50s and so on. There was Italian Williamsburg, and Polish Greenpoint, and Prospect Lefferts Gardens (which I only remember being referred to as “Flatbush” back then) and the Dyno-mite Lounge. Pork stores and Wash-O-Matics. Century-old bakeries on residential streets, and the fresh bread smell in the morning.
What I find most depressing about the pace of Brooklyn’s change is the erosion of the communities that Chris Arnade celebrates in his article, “Some Things I Will Miss About Brooklyn.” Working class people in Brooklyn are now under siege. If they’re lucky, they might get a buyout, or a lottery slot for affordable housing. If they’re not, they’re displaced. I knew a family at our old school in Clinton Hill who commuted from Staten Island. STATEN ISLAND — so that their kids could stay with their friends and be near extended family for childcare. In Clinton Hill and elsewhere in Brooklyn, churches are closing. And the people — the people that spun the fabric of these amazing communities? Those people are leaving.
They leave for East New York, for Atlanta, for the Poconos, for Forest Hills, for Yonkers. They leave for Mamaroneck, for Montclair, for Austin, for Florida. And they are replaced with people who are never home (perhaps because they work all the time?). They are being replaced by investors, or relocated bankers from Europe on two-year assignments. New York City has always been a place where people come from elsewhere and move to — in that sense, none of this is new. But what’s being lost now is being replaced with a facade of itself. Behind that reclaimed barn wood is cheap drywall. And all the patina of old Brooklyn that the new Brooklyn loves — the Edison lights, the “hand-crafted” cocktails (as opposed to made by… robots?), the artisanal pickles –- all of that doesn’t make up for the real thing that’s gone forever.
All of that fake patina, replacing the real.
I’m a hypocrite. I enjoy a good restaurant with reclaimed barn wood and old timey wallpaper just as much as the rest of my herd. But, having left Brooklyn and most of that motif behind (we live now in a part of D.C. that doesn’t have much of it) — I’m not missing having three wood-burning pizza restaurants that make their own cheese within a five-block radius of my house. I’m not missing much, actually. Except the people. I miss the people terribly. And I hope that everyone who wants to can manage to stay.
The son of the man who used to be the caretaker for the storied Slave Theater at 1215 Fulton Street in Bed Stuy, who claims to be the rightful heir to the property but lost a court case contesting its ownership, has prevented the new owner, an LLC, from taking soil samples and plans to tear down any fence erected to keep him out, according to a story in the Brooklyn Eagle.
Meanwhile, the LLC has amassed two other sites adjacent to the Slave Theater, said another story in the Eagle. The developer has not said publicly what it plans to do with the sites, but a mixed-use apartment development seems likely. Most important, plans to restore and continue the Afrocentric theater’s mission in a new form are, surprisingly, not dead. (more…)
Rents are high all over Brooklyn, and the price gap between “prime” and “emerging” neighborhoods is narrowing.
Average rents increased 6.82 percent since June 2013, with rents in Crown Heights increasing the most of any Brooklyn neighborhood in the last year, according to a report out from MNS. Average rents in Brooklyn are now $2,741 a month, up from $2,566 a month in June 2013. (more…)
Brooklyn past and present are coexisting nicely, found a 44-year resident of the borough when he stayed overnight at the Wythe Hotel and wrote about the memories it prompted for The New York Times travel section over the weekend.
The forces behind the changes of the last 44 years are, of course, complex. Many have lost out, been pushed out, as others have thrived; not everyone from Brooklyn has benefited from the new Brooklyn. But coming here on vacation allows you to marvel at what the place has become, even as the forces behind it linger beneath the surface. When I visit a foreign city, my greatest joy is to just walk around. Park Slope is the perfect place for that, with its spectacular collection of 1880s neo-Grec rowhouses. The Plaza Hotel is now a fancy condominium, beautifully done; Prospect Park, a finely groomed sylvan escape rather than a netherworld of foreboding. This is a neighborhood where physical urban beauty is as easy to appreciate as it is in Paris or Edinburgh. Much remains as it was, even if there are an awful lot of bank branches and real estate offices. The sycamore trees on St. Johns Place still provide a cooling canopy in summer, three churches still stand sentry at the top of the block. The faux-oriental plastic letters of the San Toy Laundry on Seventh Avenue are as unintentionally comic today as they were then. The girls whom my 14-year-old son hangs around with look and dress almost exactly like the girls with whom I sat on stoops 30 years ago. They even listen to the same bands.
Other conclusions: The real estate prices are crazy, of course, but one can hear good music everywhere, and the borough is perhaps somewhat more racially harmonious and accepting than it once was. There are still murders and muggings. Do you think it’s a fair portrait?
Hot on the heels of the New York Times’ story about real estate and gentrification in Crown Heights comes a look at Bed Stuy, where whites have become a noticeable presence and prices of town houses have soared in the last year. (more…)
Once again, East New York is in the news as the ground zero for Mayor de Blasio’s housing plan. If we read this article in Crain’s correctly, the formula seems to be: Rezone Atlantic Avenue from Euclid Avenue to Pennsylvania Avenue. Inject public and private dollars into developing office, retail and manufacturing space around the Broadway Junction transit hub. This, the thinking goes, will spur development of 50-30-20 high-rise housing in East New York, which will help assuage the city’s affordability problem. (more…)
A story in The New York Times over the weekend described the rapid gentrification and changes happening in Crown Heights, as longtime residents and businesses move out and are replaced by newcomers. Many businesses have moved to Flatbush, and residents typically move to Flatbush, East New York and Brownsville, according to the story.
Developers such as Realty Within Reach, Hello Living and Brookland Capital, of course, discovered the neighborhood a few years ago, and “more than 1,250 units in about two dozen residential projects” are in the works, mostly west of Nostrand and north of Eastern Parkway, according to the story. While very few are “affordable,” Brookland Capital’s Boaz Gilad explains the appeal of a condo:
“Most of our buyers are people in their late 20s and early 30s who live in the neighborhood already, paying, say, $2,400 a month in a free-market building,” he told the Times. “With an F.H.A. loan or some help from parents or money they’ve saved, the cost of buying the apartment will be maybe $2,600 or $2,700 a month. So there will be no change in monthly costs, but they’re going to own an asset.” (more…)
As prices of brownstones in “emerging” areas push past the $2,000,000 mark, some flippers are changing how they do business. Out are the low-end, Home Depot-style renovations with 12-inch tan floor tile, country-style wood cabinets, and fake granite counters. In are $30,000 appliance packages, rear walls of windows, and central air.
“As the market changed, the clientele changed. Everything demanded a much higher grade rehab, higher grade finishes, and higher grade bells and whistles. If you’re dealing with $2,000,000 houses, it’s gotta look like $2,000,000 house,” said developer Adam Cohen of Stuyvesant Group. His company has about 20 projects in various stages, including rehabs in Brooklyn and rentals in Harlem.
It was Stuyvesant Group that renovated the narrow but detailed Amzi Hill house at 22 Arlington that reset the record for a townhouse sale in Bed Stuy when it closed at $2,250,000 earlier this month. As noted, the buyer was Australian investment firm Dixon.
One of the agents on the deal, Ban Leow of Halstead, said he expects prices in the area to climb even higher soon, because a group of bigger and renovated properties are about to come on the market. This was a premium house in terms of its details and renovation, but was less than 16 feet wide. Other houses that have recently closed at high prices for what they were in Bed Stuy and Crown Heights were full size with tremendous details but unrenovated. Three of those properties were also purchased by Dixon, as reported.
In Fort Greene, where renovated townhouses generally fetch $3,000,000 and up, Stuyvesant Group is renovating a brownstone to standards more typically seen in high-end custom renovations, including radiant heat on all floors that can be controlled from an iPad, a high-efficiency boiler, and replacing the back wall with glass and steel.
In Bed Stuy or Crown Heights, that renovation would be too expensive, but developers are still taking a high end approach vs. several years ago. “We never did the cheap stuff, it was always custom cabinets, better tile and hardwood flooring,” said Cohen. “We used to give a standard package of stainless steel appliances, and maybe now it’s [a more expensive] appliance package. It used to be quartz counters, now it’s Carrara marble.”
At 22 Arlington, for example, a new kitchen in the rear of the parlor floor, pictured above, has an Italian marble backsplash and center island, Sub Zero refrigerator, Wolf range and vent hood, Bosch dishwasher, a microwave in a drawer and custom made radiator covers. Wall-mounted split A/C units were chosen instead of central air conditioning to avoid unsightly ductwork in the detail-laden house, though Stuyvesant Group does install central air in the houses it gut renovates, said Cohen.
They also repaired all the plasterwork that could be fixed. The arch above where the stove now sits “was cracked into nine different pieces, and we fixed it,” said Cohen. The interior doors are original to the house, but not necessarily in the same places, since the layout was reconfigured. In Fort Greene, there was nothing to save, since the house had a fire so it was a full gut job, but they purchased three vintage pier mirrors and restored the front door (since the house is landmarked). “We try to give it that brownstone look, we don’t want it to have that condo look,” as Cohen put it. “I feel like in this market, if you give buyers something good, they are happy to pay for it. They don’t want to pay for garbage.”
Stuyvesant Group is already in contract on two other nearly finished houses it never even put on the market but struck a deal with buyers who were among the bidders at 22 Arlington, he said.
Buyers are “looking for well-configured homes,” said Leow. A triplex over a garden rental is ideal. They don’t like small galley kitchens but prefer a “very nice open space with lots of countertops where a family can actually enjoy their home and cook for friends.” As for gut jobs vs. preserving original detail, “every buyer who buys a brownstone wants a house full of period details,” said Leow. “If there are details, it would be shameful if someone comes in and rips everything out and throws it in a Dumpster. But sometimes investors buy a shell and there is nothing to salvage.” In that case, buyers “would rather see a high end renovation that will work” for a family, he said.
Problem properties that developers were picking up for $250,000 to $350,000 at the height of the bust and selling for $500,000 to $625,000 once they were renovated are now about $800,000 just for a shell — maybe 5 percent more if they are close to Nostrand Avenue. “Today we would buy them for more than what we sold them for even after rehab,” said Cohen. Another thing that has changed is buyers were highly leveraged before and now they are putting down at least 50 percent cash if not 100 percent. (more…)
Brooklyn author and journalist Neil deMause has launched a survey asking Brooklynites what drew them to the borough and why they’ve stayed despite rapidly rising housing costs. The questionnaire is part of deMause’s research for an upcoming crowdfunded book, “Brooklyn Wars,” about Brooklyn’s gentrification and redevelopment boom.
The idea came to him while he was wondering why rents have increased even as local poverty rates have risen. “I was discussing this with a housing economist friend, and while we both had theories, none of them were convincing,” he said in a press release. “While web surveys are inherently anecdotal and unscientific, even a self-selected sample should give some hints as to how Brooklynites view their reasons for remaining in a borough that charges $3,000 a month to live in a closet an hour’s subway ride from their job.”
So far, leading early responses include “it’s cheaper than Manhattan,” “diversity” and “boyfriend.”
Brooklyn Borough President Eric Adams called for 50-30-20 buildings or senior housing along an upzoned Broadway running from Williamsburg to East New York, where 30 percent of the apartments would be aimed at the middle class, at a Corcoran-sponsored event, “Future Opportunities in the New Bedford Stuyvesant,” held at a Bed Stuy church Saturday morning.
“We need housing for middle class people in Brooklyn,” he said. “That 30 percent is the anchor of the community.” He gave an example of a program that enables police officers to purchase houses in Brooklyn and said it has helped stabilize neighborhoods because drug dealers stop dealing on blocks where the officers live.
“We can be creative in our upzoning,” he continued. “Broadway can be upzoned without destroying inner communities,” he said, referring to the upzoning of 4th Avenue as a good example to emulate. In exchange for upzoning on 4th Avenue, height limits on interior blocks were preserved — although not the blocks that touch 4th Avenue — and most of buildings on 4th Avenue are market rate. “I’m an investor over there,” he said, meaning Broadway, “because I know that area is going to change and be a place of beauty.”
Adams first floated the idea of upzoning to 10 stories on Broadway in exchange for 50-30-20 buildings in a memo about The Henry Apartments affordable housing development on Decatur and Broadway in Ocean Hill in May.
Adams also called for bank fines for misdeeds leading to the fiscal crisis to be earmarked for affordable housing and tenant protection. Churches should sell unused lands and air rights for affordable and senior housing, he said, and his team is mapping those potential development sites.
Several hundred people attended the event Saturday morning at Nazarene Congregational Church at MacDonough and Patchen. (Above, Corcoran agent Al Florant speaks.) Author and professor Lance Freeman gave an overview of the gentrification process, and panelists spoke of the need for community service and to support small business.
As the event was wrapping up, a young man in the back of the auditorium shouted out criticism of the event for being profit oriented and sponsored by Corcoran, but he was quickly ejected. Outside, he carried a sign that said “Community, Not Capital,” and spoke with attendees. A six-year-resident of Bed Stuy, he said he plans to hold protests outside “Brokeland Capital’s” headquarters on Malcolm X through the summer. “In 10 years, Bed Stuy is going to be just like Park Slope,” he said.
In the part of Bed Stuy where the event took place, housing prices have doubled in two years, from about $600,000 to about $1,200,000 for a renovated house with details. (more…)