Brooklyn Breaks the Bank for Housing

Is that based on gross or net income?

Posted by: guest at September 13, 2007 9:11 AM

I don't think brooklyn should be worry at all. it probably only effects marginal nabes.

Posted by: guest at September 13, 2007 9:14 AM

I've heard the argument made that it's OK for New Yorkers to spend a higher percentage of their income on housing because unlike most of the rest of the country, we generally don't have the expense of a car and long daily commutes by car. (Although these days, I feel like I know more and more people, esp. in Brooklyn, who own cars...)

Posted by: guest at September 13, 2007 9:19 AM

Does income also include bonuses? It is my understanding that some lenders do not categorize bonuses as regular re-occurring income when assessing a borrowers debt capacity. If this is a prevelant policy that could explain some of the higher than average ratios here.

Posted by: guest at September 13, 2007 9:43 AM

The case of Ms. Solarzano, the single mother quoted in the article, makes me wonder. With the Dept. of Ed bleeding teachers and recruiting on an international level, why does Ms. Solarzano elect to teach on a part-time basis? Why not forego the second job and teach full-time in order to reap the benefits of being a city employee? Having to cancel cable is not the end of the world, as TV is a luxury, not a necessity. Plus, unless the father of her child is deceased, then he should be contributing to the kitty, as well. Often, a woman know the father's whereabout and that he is employed, but choose not to take him to court anyway out of a sense of pride. If Ms. Solarzano needs food, there are plenty of pantries and churches willing to help out.

Usually with these examples, one need not look too far to find missteps.

Posted by: guest at September 13, 2007 9:44 AM

If the percentages are accurate, how could it only be in "marginal" neighborhoods-- 1/3 of brooklynites are paying half their income in rent or mortgage!? and more than half are paying 30% That is not marginal.

I guess I am lucky though--my maint/mort costs are very low. We pay about 15% of our income for housing in Brooklyn.

Posted by: guest at September 13, 2007 9:48 AM

Im paying about 25% of my gross income to mortgage, maintenance, and taxes. Net is a different story, but the tax deduction at the end of the year kind of balances it out.

I would be interested if they are talking net or gross...

Posted by: guest at September 13, 2007 9:55 AM

I'd say the former. Since the 90's, prices have tripled while median/average incomes barely moved up.

Corcoran shows median/average incomes ($) for the following nabes: B.Stuy (27K/41K); C.Heights (29K/41K); C.Hill (33K/46K); F.Greene (33K/46K); P.Heights (44K/58K); P.Slope (60K/81K); B.Hill (49K/78K); C.Gardens (49K/78K); B.Heights (60K/81K).

Has Brooklyn always been immune to the traditional price/income ratio of 3:1? Not during the 90's. For condos, I would apply this figure directly. For brownstones, I would multiply this figure by the median/average number of families which is probably 3 (owners duplex plus 2 rentals).

One hell of a recipe.

Posted by: guest at September 13, 2007 10:19 AM

Seems to me that this is yet another canary in a housing coal mine knee deep in dead birds.

Posted by: guest at September 13, 2007 10:26 AM

10:19 here. I was responding to "A recipe for disaster or just the way it's always been?".

Posted by: guest at September 13, 2007 10:28 AM

Re 9:44 ...

Why does Ms. Solarzano elect to teach on a part-time basis? Why not forego the second job and teach full-time in order to reap the benefits of being a city employee?

from the article: "She would like to go back to school to get a master’s degree, but cannot afford the tuition." You can't be a fulltime city teacher without a master's degree. Yes, there are probably programs that could help with tuition, but finding them and trying to balance a kid, classes and work while also struggling financially is pretty damn challenging.

It's easy to criticize others' real or imagined "missteps," but the flat reality is that it's easy to fall down in this city and that without a strong social network of people with means, it can be daunting as hell to get back up.

Posted by: guest at September 13, 2007 10:30 AM

9:14, aren't "marginal nabes" still part of Brooklyn? What you are actually saying is that if it doesn't affect me or my immediate circle, than why worry? Gee, thanks for your concern.

Regarding the woman used as an example in the article - love how people can sit back and judge how other spend their time, or criticize the choices others make. Maybe she is only teaching part time because she can't get a full time job in her teaching field. Maybe she has to take care of her child. There may be plenty of reasons why she can't work at teaching full time, including the fact that she doesn't yet have a master's degree. And to casually say that she can get food at a pantry or church is the equivilent of the "let them eat cake" excuse. Have you ever tried to get food from a pantry or church? Do you know whether or not that is reliable, or even available? Sometimes the elitist judgementalism here is just overwhelming.

Posted by: guest at September 13, 2007 10:33 AM

"wait, who ever uses net income as a base for this kind of thing? if net income is gross income minus expenses, isn't housing factored into that?"

I'm sure they're talking gross income. Net income would be too complicating to estimate (some have 401k's, some don't).

The 'net' income YOU are referring to is actually called disposable income.

Posted by: guest at September 13, 2007 10:39 AM

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

Thomas Jefferson

Hey Assholes, Read this statement again and again. We are in the greatest asset bubble in history. If you think it's cool making the top 1% more wealthy, then America is a fucked up place to live.

New York is not different, just greedy fucking people live here. BTW any any who responds to my post, YES I OWN A FUCKING HOUSE!!!!!!!!!!!!!!!!!!!!!!!

Flame on Brainwashed Fucks.

The What

Posted by: guest at September 13, 2007 10:49 AM

Be easy What! They'll get it eventually. Speaking of the banking system, everybody should check this cartoon out...

http://video.google.com/videoplay?docid=-9050474362583451279

Posted by: guest at September 13, 2007 10:57 AM

If they are talking about gross, isn't 28% of gross generally considered a conservative estimate of what anyone should be spending on housing? So if people are in the 30% range that's not that far off...in the 50% range is a little dangerous. Even if those are people expecting bonuses, it's clear the economy is not at it's best right now and those "expected" bonuses might not materialize as planned.

Posted by: guest at September 13, 2007 11:17 AM

10:30AM,

Yes, you can become a full-time teacher without a master's degree. I have several friends who have done so. You are hired and then required to earn your master's degree in a certain time frame.

Re: trying to earn a degree while parenting, I am finishing my master's degree and there are women in my classes who are single employed mothers who have taken out loans and made huge sacrifices to get ahead in life. It's good that they didn't listen to people like you, telling them that they couldn't do it.

While I have not personally obtained food from pantries and churches, I know plenty of people who have. The places that I am familiar with are reliable, open at specific times, and staffed by caring people eager to help the less fortunate.

Posted by: guest at September 13, 2007 11:18 AM

Be easy What! They'll get it eventually. Speaking of the banking system, everybody should check this cartoon out...

Naw, they will never get it. Thats why we are in this mess.

The What

Posted by: guest at September 13, 2007 11:20 AM

Is it me or does the Queens rental bar seem much larger than the Bronx rental bar even though the percentage for the Bronx renters is higher. I can believe NYT can make such a simple mistake.

Posted by: guest at September 13, 2007 11:21 AM

To those that say that Brooklyn is unaffordable to all but the rich are spoiled brats. That is absolutely and completely untrue. Most of Brooklyn is quite affordable and you can find a condo for 100K quite easily.

It may not be in Park Slope or other Brownstone neighborhoods, but that doesn't mean they don't exist.

The affordable housing is out there, but if you think you're too good for it, that doesn't mean that it doesn't exist.

Posted by: guest at September 13, 2007 11:26 AM

Doesn't this just go hand in hand with why Black people are moving down south....

Posted by: guest at September 13, 2007 12:02 PM

The data used for this report are from the Census's American Community Survey. The information is based on what is reported by whoever in the household answers the survey. As in the decennial Census, the income data reported in the ACS is supposed to be gross income, from all sources.

Posted by: guest at September 13, 2007 12:03 PM

This doesn't happen in other cities.

In Los Angeles, no one think they deserve to live in Beverly Hills or Bel Air or Holmby Hills. That's how the whole inland empire of Riverside came to be. Those that couldn't afford the exclusive sections of LA, moved to the west and south. In San Francisco, people have been priced to Oakland, a far less desireable area.

Here in New York, you people are so caught up with materialism that if you can't live in Manhattan or a select handful of Brooklyn neighborhoods, you think the world has come to an end.

There are places in Queens, Brooklyn etc that are perfectly lovely places to live where you can get a 2 bedroom apartment for 250k-300k.

Most of you would consider that horrific.

That's fine, but please don't exclaim that these places don't exist and that New York is only a place where rich people can live.

If you have a modest income, you get a modest place to live. You don't get to make 60K and year and live in a loft in Tribeca.

Sorry.

Posted by: guest at September 13, 2007 12:16 PM

Midwood
Ditmas Park
Kensington
Brighton Beach
Coney Island
Flatbush
Bushwick
Jackson Heights
Sunnyside

To just get you started....

Posted by: guest at September 13, 2007 12:37 PM

There's an article in today's amNY that features Woodhaven, Queens. I think that this is a classic example of the type of neighborhoods that 12:37 is referring to. It may not be Park Slope, Astoria, or Williamsburg, but it exists and the rents there are more affordable.

http://www.amny.com/news/local/am-cityliving0913,0,292054.story

I do agree that peoples commonly (and perhaps unknowingly) define Brooklyn as the tiny northwest portion near Manhattan. Brooklyn is a huge place and not all areas are as expensive as Brooklyn Heights.

Posted by: guest at September 13, 2007 12:50 PM

To just get you started, there are no $100K condos to be found in:

Midwood
Ditmas Park
Kensington

The minimum asking price in those areas seems to be about $150-200K these days. Alas.

Posted by: guest at September 13, 2007 2:40 PM

"Usually with these examples, one need not look too far to find missteps."

Spoken by a true rich fucker who most likely works in finance or some other occupation without true labor but simply shuffling other peoples money around.

Posted by: guest at September 13, 2007 2:43 PM

For most people, 150-200K is pretty affordable still.

You're splitting hairs now.

Looking for anything less than 150K in ANY city would be a more difficult task these days. This is still New York, afterall. To be able to find something for 200K in the city and within a half hour of Manhattan is a doable thing.

That's all I was saying.

Posted by: guest at September 13, 2007 2:45 PM

The whole NYC market will fart down to 3X income within five years and stay that way for at least another five years. Why overpay (even if cheaper) at the top for a less desireable location and face trouble selling at the bottom? Wait and see what's affordable in your desired areas when the smoke clears. In the mean time, save cash (or gold) to offset higher interest rates. Before prices fall, many of these new developments are going to dump their non-selling inventory on the rental market if they don't go belly-up. Look for rents to drop first, then prices. You'll be able to get a deal on a 2-year lease. Good things come to those who wait.

Posted by: guest at September 13, 2007 3:02 PM

Its so refreshing to see all these predictions of gloom and doom in the real estate markets. Reminds me of all of the negative "hype" on the message boards for stocks from people shorting and trying to create self fulfilling prophecies...

3X income is a pipe dream - maybe in Florida or Iowa, but not here.

The amount of foreign capital flowing into NYC will never allow it to happen, and the falling dollar will only escalate that effect.

Posted by: guest at September 13, 2007 3:18 PM

"The amount of foreign capital flowing into NYC will never allow it to happen" is a pipe dream. Capital was a flowin' in the mid 90's and guess what, most of these apartments and brownstones (per family unit) were asking 3X income. But I guess the economy is very healthy right now, right?

You think the dollar will fall forever? Study the concept of deflation my friend.

Posted by: guest at September 13, 2007 3:41 PM

Was it NOT a "self fulfilling prophec[y]" for real estate on the way up? It most definitely WAS. Now it's a debt-fuelling catastrophy.

Posted by: guest at September 13, 2007 3:48 PM

3:41 - Sucks for you to not own something in NY by now. Sounds like your frustration over being priced out of the market will ulitmately lead you being forced to leave NY.

This is a very expensive place to live, just like London, Tokyo, Paris, etc. If you cant afford now, you will be waiting forever for NYC to become a cheap place to live.

Posted by: guest at September 13, 2007 3:50 PM

Its so refreshing to see all these predictions of gloom and doom in the real estate markets. Reminds me of all of the negative "hype" on the message boards for stocks from people shorting and trying to create self fulfilling prophecies...

3X income is a pipe dream - maybe in Florida or Iowa, but not here.

The amount of foreign capital flowing into NYC will never allow it to happen, and the falling dollar will only escalate that effect.

Posted by: guest at September 13, 2007 3:18 PM

3:41 - Sucks for you to not own something in NY by now. Sounds like your frustration over being priced out of the market will ulitmately lead you being forced to leave NY.

This is a very expensive place to live, just like London, Tokyo, Paris, etc. If you cant afford now, you will be waiting forever for NYC to become a cheap place to live.

Everyone wants to live here *rolls eyes*
Real estate is on life support people.

The What

Posted by: guest at September 13, 2007 4:11 PM

Actually it's great. I can grow my gold/cash stash by day and sleep at night. And in five years I'll save you from foreclosure.

Posted by: guest at September 13, 2007 4:13 PM

Even if prices come down, NYC's prime neighborhoods, even the not so prime ones, will never be cheap or even affordable to blue collar workers looking to buy. To think otherwise is naive. If the economy gets that bad, do you really think that the blue collar workers are going to somehow retain their jobs and have excess capital to put into housing. Come on. It's called a property ladder for a reason, you have to start at the bottom if you don't have a large amount to pony up on first place.

Posted by: guest at September 13, 2007 4:16 PM

What about white collar workers (doctors, lawyers, engineers), 4:16? They've been locked out too. It would be naive to think that this could last. When the economy gets bad, we're all at risk of losing our jobs AND our houses. It's those who have saved and are fortunate enough to hold onto their jobs, whether blue collar or white collar, that will benefit from cheaper prices. Even in prime nabes for some.

Posted by: guest at September 13, 2007 4:32 PM

Actually 4:13 - You'll be handing over all that gold and cash to me as my tenant.

I will be raising the rent every year and plan on using your treasure for a vacation home - I think there will still be good deals in Panama for a while.

Posted by: guest at September 13, 2007 4:33 PM

Not sure how many doctors loose their jobs - Even the really bad ones will always be in some demand. As for lawyers - there is way too many already so when the "Lawyer Bubble" bubble burst, perhaps the engineers will be needed to creatw low cost housing for them somewhere outside of the city.

So you see - problem takes care of itself!

Cheers!

Posted by: guest at September 13, 2007 4:43 PM

If you are a laywer, doctor or engineer and can't find a place to live in one of the prime neighborhoods of New York, you are a complete and total loser.

Quit hitting the whores and slot machines, then you might have a chance.

Posted by: guest at September 13, 2007 5:43 PM

Just a general gripe:

Why can't Internet posters spell the word "lose"? It's not just this site, but to almost every site I go. It's really annoying!

-Supergirl

Posted by: guest at September 13, 2007 5:50 PM

Actually, guest from 5:43, ever check out the salaries that NYC pays its starting engineers? Roughly $37-45k. But I guess if all those "losers" stopped working for the City and started chasing money so they could live in "prime" neighborhoods, then YOU and others like you would go out and design, build and maintain the libraries, museums, police and fire facilities, etc. I assume you'd also design and maintain your own roadways and review all the contracts for those things, since the engineers and attorneys who do that kind of work are such losers anyway.

I'm all for capitalism, but the "if you can't afford to live you're a loser" mentality is juvenile (at best) and totally unnecessary. Just a reminder: when you die, you can't bring your brownstone/"prime nabe"/piles of cash in the urn or casket with you.

Before you all attack, I'm making a very comfortable six-figure salary...just happen to have friends who are great people working in the public sector.

Posted by: guest at September 14, 2007 8:41 AM

Public Sector = Could'nt make it in private sector

Have you noticed the amazing efficiency speed and quality of public (i.e. Union) employees? Think there is a reason for it?

Posted by: guest at September 14, 2007 9:07 AM

It may come as a shock, but not everyone WANTS to work in the private sector. Some people (gasp) actually like doing things to help other people and don't want to deal with the pompous attitudes and rat race atmosphere that is so prevalent in the private sector.

There was an article approximately two months ago in a legal trade magazine detailing the fact that many top law school grads are choosing non-profit and public sector jobs over private sector. Why? Better quality of life and the belief that they can make a difference. Not everyone wants to bleed for $160k/year.

In dealing with public sector employees I've found that if you talk to them in a condescending manner, then you get the "amazing speed and efficiency" that you note. Granted, this is not always true, but the "I'm better than you" attitude definitely won't do anything to facilitate these interactions.

Good luck.

Posted by: guest at September 14, 2007 9:45 AM

well considering i do work in the public sector and make less than 60K a year and own in park slope, i do indeed think those that whine about not being able to afford anything are losers.

it's a little thing called SAVE.

not everyone needs a new ipod every year.

Posted by: guest at September 14, 2007 10:36 AM