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February 28, 2008
As Condo Sales Languish, Builders Slam 421-a Reform
The Sun has a couple of articles this morning that, taken together, seem slightly contradictory. First off, Mike Stoler writes about how condo sales at many new Brooklyn developments have seen better days. (AKA “condo glut.”) Developers say that many for-sale condos in Downtown, Dumbo and the Burg are seeing price cuts of 15 to 20 percent and that many Brooklyn builders are considering turning their projects rental. One unsourced “industry leader” has this to say: “There has been massive overbuilding in the entire borough of Brooklyn. It is like the Wild West, and if you don't control growth, then at some point it's going to get out of hand." The other story in the paper is about how developers are psyched that in December the City Council is going to review the changes to the 421-a program, which, effective in July, requires that projects in many sections of the city (including the Slope, Prospect Heights, and Bushwick) include 20 percent affordable housing in order to get 421-a tax abatements. In other words, while sales are at a standstill at many developments (a whole lot of which benefited from 421-a), developers want 421-a tax breaks reinstated in order to incentivize the construction of more market-rate housing. Yes, 421-a repeal would mean cost-savings for buyers in the future, but right now those buyers aren’t keen on plunking down money for all the condos we already have. So the question is, does is make sense to incentivize the creation of new housing at a time when the existing pipeline isn't being absorbed? Or is there still plenty of need and demand for new housing, just not at these prices?
The Divide Between Manhattan, Other Boroughs [NY Sun]
Tax Abatement Debate To Be Revived [NY Sun]
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Comments
“There has been massive overbuilding in the entire borough of Brooklyn. It is like the Wild West..."
No shit Sherlock!
Posted by: guest at February 28, 2008 10:15 AM
Prices can't go down. It's different here.
In 10 years NYC will be occupied by 6 million investment bankers, trustafarians, with one quarter of its housing stock held empty by foreign investors who just pay taxes and hope to sell at higher prices. We need 421a so they won't have to pay those taxes.
Posted by: guest at February 28, 2008 10:33 AM
Changes to 421(a) contribute to the glut b/c developers are rushing to start projects at a point where they are not needed to get the tax abatement.
Posted by: guest at February 28, 2008 10:40 AM
if you can afford $800 a sq ft or more for a condo you do not need a tax ababtement
Posted by: guest at February 28, 2008 10:42 AM
10:42 - that is just silly;
a $800,000 apartment (for example) in NYC isnt owned by a Billionaire, it is generally a 2 income family earning 200K a year - unfortunately in NYC that is an upper middle class lifestyle - and retaining that workforce is essential for NYC economy.
and 2 - the taxes are a function of the assessment - so the higher the price - the highr the taxes - so again the abatement can have be significant for owners.
3rd the taxes are abated not eliminated - so in the long run if the abatement increases housing supply (more then in its absence) the longterm effect is to increase the cities overall tax base - again another worthy goal.
This isnt to blindly support the program but populist yet simplistic statements like 10:42 really add nothing except misinformation to the debate.
Posted by: guest at February 28, 2008 10:55 AM
The point of the tax abatement is to have the housing built and occupiable before the additional 1 million residents come to New York. Many of those units may go ownerless for a year or two or three, but over time they will be bought up by new arrivals to the city. Until then, developers do have the option to act as landlords and rent them out at whatever rents the market can bare.
Posted by: stevek at February 28, 2008 10:57 AM
I remember when my wife and I were shopping for a 2BR condo 1-2 years back. We were waiting, and still are, knowing that the condo glut would eventually bring prices down. Realtor after realtor after realtor kept telling us, "there's no glut. Brooklyn is NOT being overdeveloped".
There's a glut.
Its good we stuck to our guns.
Money in the bank, great credit, great jobs. And waiting for more discounts to come.
There are few things more gratifying than walking by those same realtor offices with a big grin on my face.
Posted by: guest at February 28, 2008 10:57 AM
10:57...In those two years you waited, the price of my house has gone up about 50%.
you aren't as smart as you think you are.
Posted by: guest at February 28, 2008 11:00 AM
11:00
But if we were to buy what we could afford 2 years ago, we could get the same or better for FAR less.
I'm smart. I know my budget, savings and what I can afford.
Glad the place you bought in the ghetto 2 years ago went up 50%. Thats atypical.
Posted by: guest at February 28, 2008 11:03 AM
Don't live in the ghetto. But apparently you are planning on it.
Only place where prices are negotiable at this point are fringe areas.
I see prices in Park Slope continuing to rise at quite healthy rates.
In the past week, we've seen a house get bid 250K over ask and a house that sold last year for 3.2 million sold last week for 3.6 million.
Keep waiting sucker.
Posted by: guest at February 28, 2008 11:04 AM
You don't need an MBA from Harvard to tell them what anybody on the street can see: too many condos! People have been predicting this glut, even on this blog, for years.
The cheerleaders keep saying there are plenty of people streaming to NYC, willing to pay big bucks to live here, because just EVERYONE wil have a lucrative financial sector job. The creation of thousands of new lux condos will mean more housing for those of lesser means, as everyone moves up the ladder, freeing up space. Well, they forgot to calculate a few things:
Not everyone wants a condo. Condos, by in large, are marketed for the young professionl. Most condos give you the design choice of modern, minimal, and stark. This is not everyone's taste, and changing it costs big bucks.
Many new condo buildings are not family oriented, either in size of apartments, or amenities therein. This means many families choose other types of living situations, not new condo buildings.
Most of them seem to be too expensive for what you are getting. So-so workmanship, forgetable building, plonked down in a neighborhood, but not really part of it. Especially true for a building like the Mynt in Bed Stuy, but also the ones on 4th Ave, and even Meier's glass tower on the Park, perhaps a better design, but certainly not relating to anything in Prospect Heights. Where is the community?
Granite countertops and Sub Zero's are getting old. Since they are now everywhere, they no longer have much cachet. A fancy kitchen, or bath, is not going to sell an apartment anymore. Not when you have so many choices, as there are sooooo many apartments.
I think many of these buildings are going to have to go to rental to recoup some income. up until condos became so hot, not all that long ago, this has been a city of renters, from Park Avenue to the Bowery. Perhaps it is just part of the cycle, and we are going around again. Being a renter was never a stigma or a negative. People will always need a place to live. Buying is not an option for many, at least not now. Maybe that will open up apartments for middle income people, if only a little bit, although I don't think the condo spillover will make much of a difference to that market, sadly.
Posted by: Montrose Morris at February 28, 2008 11:07 AM
my neighbor bought her 1 bedroom in prospect heights last year for 275k and had to move to california for work and sold it 2 weeks ago for 387k.
not making that kinda money in your ing account, 10:57. what's the interest rate now...3%?
Posted by: guest at February 28, 2008 11:07 AM
Hey 11:03--you come on this board with that smug attitude and what do you expect?
Posted by: guest at February 28, 2008 11:09 AM
10:57 - you may be able to grin eventually but 11:00 is right (and your not) - prices will have to continue to fall for awhile before they get below 2 years ago pricing.
I'd be happy to be wrong but I'd like you to show me a single condo or 2 comparable condos where the price today is the same or less than it was 2 years ago.
Not saying it wont or cant happen but we got awhile yet before that happens.
Posted by: guest at February 28, 2008 11:09 AM
The Argyle in Park Slope is already 50% sold out.
Apparently the prime areas are still doing great.
Posted by: guest at February 28, 2008 11:10 AM
By the time prices have fallen enough for anyone to notice, they will be going back up.
If construction halts and more buildings go rental...know what that means???
Less supply.
Know what less supply means?
Yup. Higher demand and prices.
Posted by: guest at February 28, 2008 11:13 AM
"In the past week, we've seen a house get bid 250K over ask and a house that sold last year for 3.2 million sold last week for 3.6 million."
But will it get funded? Credit markets are getting slammed!
There are too many condos. plus you are paying nose bleed prices for them. Methinks asshats are about to get shafted!!! But remember "Real Estate always goes up". LMMFAO the shit is imploding!!
The What
Someday this war is gonna end...
Posted by: guest at February 28, 2008 11:13 AM
"But will it get funded?"
The properties already closed, ahole.
So yes.
Posted by: guest at February 28, 2008 11:15 AM
I was looking at condos two years ago, and decided that it was cheaper to rent. I have kept on looking, off and on, mostly out of curiousity for the last two years. I have not seen any real price increase in Brooklyn Heights, Cobble Hill, Carrol Gardens or Park Slope. Though, I can't say that I've seen much of a decrease either. I don't know about other areas.
Posted by: guest at February 28, 2008 11:16 AM
I'm just thinking about buying in Brooklyn and I'm already 25% richer.
Posted by: guest at February 28, 2008 11:17 AM
"The Argyle in Park Slope is already 50% sold out."
There as been NO WORK done on that site for about TWO MONTHS now.
That project appears DEAD in the water as far as I can tell.
Posted by: guest at February 28, 2008 11:21 AM
10:57 In early 2006 we bought our 2 bed 1277 sf Prospect Heights condo for 450K.
Today, it was appraised at 600K. I'm glad we took the leap. Also as a family, at that time we bought, with a HHI of close to 200K, we were told we can afford an 800K condo.
I am glad we didn't listen and stuck to our budget, if we didn't we would have lost our home by now (one of us was laid off).
Posted by: kdabrowski at February 28, 2008 11:22 AM
Montrose - 1st of all "Condo" is a type of ownership arrangement - not a type of apartment (or townhouse) - in reality except for a relatively small percentage of people in NYC who want or can afford a private home (like a brownstone,limestone or Victorian) - therefore the market for "condo" is virtually everyone else who is looking to own in NYC. So I highly doubt that being a "condo" is the problem.
All that being said - I love how now the "brownstone Community" is upset or somehow disgusted that there are too many condos causing a glut - the reality is that I (and a few other economically grounded people here) have said for years that this building is good because it will help reduce the "affordibility problem" that was what the "brownstone community" was complaining about a year ago.
That being said the idea that there is a "glut" is just ridiculous. The best evidence of "glut" is in prices - and so far prices have softened but not that much. Further inventory while high for recent standards - is extremely low compared to other cities even in pre-bubble growth times. Las Vegas has a GLUT - Brooklyn has a normal SUPPLY.
Anyway ultimately all that will happen (assuming the financial markets dont implode and Government intervention doesnt destroy the economy) is that prices will come back into equilibrium with incomes - which in the long run is good for NY and the less than uber-rich. This cycle is as old as NY and is the reason that virtually all non-public housing in this city was at least at one time built for middle class or better.
Posted by: guest at February 28, 2008 11:24 AM
The Argyle is in "a prime area" like Ralph Nader is a legitimate presidential candidate.
Posted by: guest at February 28, 2008 11:27 AM
Where are the cuts? Most of the condo I have seen selling are at 700+ dollars a sq ft. I bought my condo for 450 a sq only 2.5 years ago. Prices may be dropping but it is certainly not cheap yet nor will it ever be cheap.
Now if prices would start dropping in Bayhead NJ I would really be happy.
Posted by: guest at February 28, 2008 11:29 AM
I wish they'd demolish that building shown in your pic. Its totally out of context for the street. Also the tallest bulding around was the chrich spire until they put up that ugly shambles.
Posted by: guest at February 28, 2008 11:31 AM
Less supply does not equal higher demand.
People just don't want to pay premium prices for the junk.
Hence the inventory will languish on the market and prices will drop further.
Posted by: guest at February 28, 2008 11:34 AM
The problem is their is not enough people turning in their leases for a condo or coop.
The condo boom is fueled by people streaming in from Manhattan and over-seas. Most people that move to NYC rent and dont buy right away. People are no longer streaming in from manhattan and renters dont seem to be aggressively saving for a downpayment and closing costs. So right now the market is at a stale-mate.
I agree, prices may come down a little in the next year or so, but as rents rise, more Brooklynites and Manhattanites are forced into the finaincial decision to buy something. So dont look for a 25% drop all of you renters out there. Aint gonna happen.
Posted by: guest at February 28, 2008 11:47 AM
What 11:24 said.
Posted by: guest at February 28, 2008 11:48 AM
I think prices on crappy new construction will come down 20%, they will eventually sell and then developers will start paying more attention to detail and we will have a more beautiful city because of it.
No end of the world.
Prime Park Slope, Ft. Green, Brooklyn Heights might be flat-ish for the next year, although personally I'm still seeing some price gains for the nicer co-ops and brownstones.
Posted by: guest at February 28, 2008 11:50 AM
"Or is there still plenty of need and demand for new housing, just not at these prices?"
It doesn't take a rocket scientist to tell you that if something is priced too high it won't sell, in any market.
And, I've read precious little about construction quality. Many of these new condo buildings are shoddily built and the developers have the nerve to charge top $$$. Smart buyers aren't going for that.
Also, to respond to Montrose Morris RE: On The Park, I walked by it last weekend and was pleasantly surprised at how the building's massing echoed common forms and lines of other buildings on both St. John's Place, and Plaza St. East. So, I disagree when you say that the building doesn't fit in with its neighbors. I think that it's a modern interpretation of those very tall buildings on the other side of GAP.
Posted by: guest at February 28, 2008 11:57 AM
11:47 - the cycle you are talking about can continue for longer than a year or so b/c as people (and developers) can't sell their units at prices they want (or need to cover their debt) many of these units will enter the rental market, thereby maintaining the attractiveness of renting in declining (or even uncertain) market.
In terms of "carry costs" renting is alot cheaper then owning now and will remain so until prices fall significantly or rents rise significantly (or both) - Once you remove the assumption that a RE unit is always an appreciating asset, the economics of renting vs. owning skew way over to renting at current prices.
Posted by: guest at February 28, 2008 11:57 AM
i rent- i save and i will wait unitl what i want can be bought on my income
all the people claiming to make all this $$ on their properties, you have not made didly until you sell
paper gains are not real $$$$
Posted by: guest at February 28, 2008 11:58 AM
Absolutely agreed 11:24.
This post is from a DEVELOPER's perspective. There is a condo glut for the market segment that can afford $700-$1000 a square foot places in Brooklyn. For the other 95% of the borough's population that can't afford such high priced apartments, there is an acute housing shortage.
I realize our entire economic system today is predicated on this false belief that modern capitalism is low risk and high reward, but that is a delusion. Developers of many of the condo projects that came online early got good returns because they took the risk when everyone though Brooklyn would forever be a dump. The followers took a risk believing the market here would forever be high-end luxury development.
They took that risk, and it didn't pay off. Sucks for them, but that's why capitalism is so great. If there is truly a problem, they will simply keep lowering the price until the poor schleps living in delapidated century-old apartments can afford it.
I mean seriously. What if the auto industry was in the toilet and no one was buying $50,000 BMW cars. What if they lowered the price to $25,000? Or $15,000? You know they would sell them in a heartbeat. The same is true here.
By the way - this very scenario happened in Harlem in the early 20th century. Developers built the entire neighborhood as luxury housing. The rich white buyers didn't appear. So what happened? It went to poor blacks who previously were restricted to tenements (that now rent for a lot of cash in hip neighborhoods). Such is how change occurs in an urban context. It is a story repeated all over New York City.
Posted by: Polemicist at February 28, 2008 11:58 AM
"By the way - this very scenario happened in Harlem in the early 20th century. Developers built the entire neighborhood as luxury housing. The rich white buyers didn't appear. So what happened? It went to poor blacks who previously were restricted to tenements "
Covert racist statement alert! What evidence you have that this happen??!! This is a case you are taking out of your ass Polemicist. To be black does not means "I am poor". There was black prople in Harlem way before this boom happen and lived quite well. Those say Harlem was the center of renaissance for African-Americans.
The What (Nope I didn't go off)
Someday this war is gonna end...
Posted by: guest at February 28, 2008 12:11 PM
The bmw example is a rather good one, polemicist.
Other areas like Miami, Las Vegas, Phoenix, San Diego...it wouldn't matter if prices dropped another 50% because there simply aren't any buyers left for the properties.
Just read today that there are currently 25,000 condos on the market in Miami with 18,000 more on the way in the next year.
At the height of the market, they were selling 10,000 a year so even in the best of markets, they have a 3 year supply of homes.
Really scary.
This is NOT the case in NYC.
If you dropped the price on some of this crap, it would sell in a heartbeat. There is still an icredible demand for properties in New York, as long as they are at the "Right" price.
I actually think developers are realizing this and are trying to get rid of product as fast as possible.
It's the reason why prices are not coming down very much, if at all. Because historically, inventory is still extremely low.
Posted by: guest at February 28, 2008 12:12 PM
Oh BTW! Check out this comment for Benanke!
Bernanke's Bank Comment Rattles Stocks
http://www.cnbc.com/id/23389338/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo
"I expect there will be some failures'' of small, regional banks invested in real estate, Bernanke told the Senate Banking Committee in his second day of congressional testimony. "Among the largest banks, the capital ratios remain good and I don't anticipate any serious problems of that sort among the large, internationally active banks that make up a very substantial part of our banking system.'' The comments came during the question-and-answer session with the Senate.
GAME OVER!!!!!!!
The What
Someday this war is gonna end...
Posted by: guest at February 28, 2008 12:14 PM
How is that game over, 12:14??
The big banks are fine, some of the crappy smaller ones are not.
How is that shocking or disturbing?
Do you know what CAPITALISM is????
Posted by: guest at February 28, 2008 12:17 PM
"How is that game over, 12:14??
The big banks are fine, some of the crappy smaller ones are not.
How is that shocking or disturbing?
Do you know what CAPITALISM is????"
OK Dumb fuck. Citi, WAMU and Wacova is INSOLVENT!!!!!!! The took massive write-downs on this mortgage crap. Citi had to borrow money at 14%. When the chairman of the FED say in front of the Senate "I expect there will be some failures'' of small, regional banks invested in real estate", you can bet there are some Big Boys in trouble. Remember Northern Rock? The British taxpayer had to eat billions of dollars! Bank runs here we come.
The What
Someday this war is gonna end....
Posted by: guest at February 28, 2008 12:28 PM
you are more of an idiot than i thought, the what.
Posted by: guest at February 28, 2008 12:30 PM
""Among the largest banks, the capital ratios remain good and I don't anticipate any serious problems of that sort among the large, internationally active banks that make up a very substantial part of our banking system.'' The comments came during the question-and-answer session with the Senate.
GAME OVER!!!!!!!
The What"
There are people on this site who are actually ASKING this moron for advice!
Posted by: guest at February 28, 2008 12:39 PM
"you are more of an idiot than i thought, the what."
Ok then, why The What is a idiot. Please come up with something! The FED chairman said in front of the Senate" I expect there will be some failures'' of small, regional banks invested in real estate",.. What the fuck is wrong with out! Oh I see, you POS is going down in value and you are a little emotional. I styling on you. Boo Hoo.
The What LMMFAO
Someday this war is gonna end...
BTW I'm at a good place now, I know the end of this war is near.
Posted by: guest at February 28, 2008 12:39 PM
I can't even make it through an entire What comment because he's so unregulated, but what if he's actually right?
Posted by: guest at February 28, 2008 12:40 PM
he hasn't been right about anything else. why now?
he's been predicting this shit for 5 years.
the end of the world still has not come.
Posted by: guest at February 28, 2008 12:47 PM
Well, the FDIC did mention the other day that they're bringing folks out of retirement and hiring more bank failure experts for "purposes of preparedness."
Posted by: guest at February 28, 2008 12:50 PM
It is fine that some of these buildings are 50% or even 60% sold. Poeple are already living in some of them. However, with the remaining units languishing, sponsors will rent -- effectively lowering the value of the condos that were sold (harder to get mortgages for non-owner occupied buildings, quality of life etc.). And the ones that have not been finished will be in worse shape. Flippers are usually the early contract holders and they will back off.
Older buildings have increased in value because they were such a steal ($500-800 sf compared with $700-100) comapred with new construction. As new construciton prices fall, increases on older units will flatten art best.
Another thing is that people flocked to some of the new buildings due to lower maintenance; while R/E tax abatements will last a while, the unrealistic budgets for labor, energy etc. generally cause those to go up significatly after the first year. So, again, not such a good deal the longer they stick around.
Posted by: guest at February 28, 2008 12:51 PM
I wonder how many people ACTUALLY READ the Sun article who have posted here. I'm guessing none.
The writer says that in 18 months, prices will go back up, JUST AS THEY ALWAYS HAVE.
Idiots. All of you.
Maybe you should wait till 18 months from now. Sounds like a good plan. Cause buying low would make too much sense.
Posted by: guest at February 28, 2008 12:51 PM
As I've been predicting for quite some time, pre-war will continue to hold its value in NYC.
New construction will suffer most. We already saw in 2007, that condo maint costs went up 38%.
Posted by: guest at February 28, 2008 12:53 PM
Much of Harlem, and even some of the Bronx (The Grand Concourse for example), was developed as luxury housing, but the people never arrived to pay the prices that the developers expected. Hence the great housing stock. This is known FACT.
Whether the people were Black, White, Green, or Pink makes no darn difference to me. They were poor, and were not the expected occupants.
Posted by: guest at February 28, 2008 1:00 PM
"Well, the FDIC did mention the other day that they're bringing folks out of retirement and hiring more bank failure experts for "purposes of preparedness."
Well, that settles it! You don't need to hear or read anything else! Just go join the What down in his bunker, eat some Spam and Ramen, and wait for the end to come.
Posted by: guest at February 28, 2008 1:01 PM
What's all this nonsense have to do with the 421a. At the end of the day the consumer is getting hit pretty bad. We will need to shell out another couple of hundred dollars a month for taxes. Even if the developers drop prices 20% it still won't make up for our loss in the long term. Buying a 400k 1 bedroom after maint. and taxes and mortgage will litterly won't make sense. The only one who profits from this is the ctiy / state.
Posted by: guest at February 28, 2008 1:04 PM
All "The What" is, is the other side of the bubble....
eventually alot more people will be saying (and believing) what he is spouting. But just like it was pure hype to say that "prices will only go up", "if you securitize it it doesnt matter what "it" is", "Economic cycles don't matter anymore", "the world economy has decoupled from the U.S." etc, etc, etc,
It is pure hype (the other way) to say; "the world is coming to an end", "banks will all fail", "the dollar will be worthless" etc, etc, etc,
In fact the negative hype is even "more skewed" because by nature, humans (in a relatively free system like ours) will always strive for more, to learn more and each generation can build on the past - therefore the natural skew is up.
Thats not to say that things can't go down, and that there won't be massive pain and social upheaval; but absent a (real) global war, massive terrorist attack, or pandemic - the world is not coming to an end and the U.S will process the excesses (hype) and then move on.
Think of "The What" as the Yang (as in Ying and Yang) to the Mortgage Broker in 2006 telling a guy earning 50,000 a year not to worry about the 2008 interest reset that will result in a $3,000 a month mortgage payment - because "by then you'll be able refinance your house for double."
Posted by: guest at February 28, 2008 1:06 PM
The Grand Concourse WAS luxury and (relatively) wealthy people did "arrive" and live there - they just moved when suburbia, crime, Coop City and some racism resulted in massive flight.
Posted by: guest at February 28, 2008 1:09 PM
The What is a Yang all right...
Posted by: guest at February 28, 2008 1:10 PM
12:51 & 12:53 (likely the same poster) you are way off -
ALL real estate within a market is linked, new construction is not going to fall 30% while older Coops appreciate or remain flat - ALL will move together (including Brownstones) - obviously certain buildings and neighborhoods will do relatively better (or worse) but the differences between one ownership classification or housing class in a single neighborhood will be minimal.
Don't believe me....try to find one historical situation where this hasnt held - people are (relatively) rational - they may crave a pre-war Classic 6, or a Brownstone but if the price differential gets too wide they'll settle for a large new "luxury" condo.
You also ignore the fact that some people PREFER new construction (I certainly prefer an elevator to a walk-up apartment in a converted rowhouse); and the effect a credit crunch will have on many over-leveraged COOPs.
Posted by: guest at February 28, 2008 1:16 PM
12.51 - buying now isn't "while low". What are you - a developer? Seriously, no-one with an ounce of financial sense and not having their head in the sand would buy now. End of the year perhaps, but not now.
Posted by: guest at February 28, 2008 1:28 PM
The What
Talking history is not racist. How are you black and unaware of the history of Harlem? And, duhh, I was talking about blacks at the turn of the 20th century. Of course there are many middle class and wealthy blacks in Harlem today. That was hardly the case 100 years ago however. You do know that until the Civil Rights era, it was perfectly legal to restrict where people could live based on race, right?
Do you really think that minority ghettos happened purely by chance?
Read the wikipedia article, sheesh
http://en.wikipedia.org/wiki/Harlem
Me thinks The What is a fake black guy.
Posted by: Polemicist at February 28, 2008 1:30 PM
I've suspected he might be faking too, his subject/verb disagreement seems like an affectation.
Posted by: guest at February 28, 2008 1:42 PM
Ok Polemiciasst, here we go.
"Talking history is not racist. How are you black and unaware of the history of Harlem? And, duhh, I was talking about blacks at the turn of the 20th century. Of course there are many middle class and wealthy blacks in Harlem today. That was hardly the case 100 years ago however. You do know that until the Civil Rights era, it was perfectly legal to restrict where people could live based on race, right?"
Prove it!
"Do you really think that minority ghettos happened purely by chance?"
Methinks the Ghetto's was with Jews first. Thats where the term came from.
"Me thinks The What is a fake black guy.:"
Nope Assfuck, Every thing is black including my dick.
The What
Someday this war is gonna end..
Posted by: guest at February 28, 2008 1:50 PM
I think the problem is that the buyers in Brooklyn are much more price-sensitive than developers thought they were. Developers saw prices in brooklyn go up to $500-$650 a square foot in fort green and carroll gardens and downtown and saw condos flying off the shelves at these prices. SO they figured the market was deep and started underwriting projects at $750-$850/SF (think one hanson and forte) and what they found was that while there is still a huge market in Brooklyn at the $550-$650/SF range the market at those higher rates is very small. Why? Because a dual income couple bringing in around $200K can't afford a mortgage on a $1 million 2BR. They can afford around $650K for a 2 BR or they can maybe stretch and go to $850 for a 3BR. If developers could figure out a way to build that product, you will see just how deep that market is...
Posted by: guest at February 28, 2008 2:08 PM
Since "The What" is probably five or six people posting under that name by now, I don't think race really matters. I think that poster's point was that being Black should not be equated with being poor, even inferred.
Anyway, while I do find the postings attributed to "The What" to be a bit extreme, many of the posters here are extreme at the opposite end of the scale. That's makes sense because who wants to see a piece of property that they invested hard earned money and time and emotion into depreciate? At the same time we all have to acknowledge that markets go up and markets come down too; over longer periods of time they tend to go up, unless there is an economic disaster (i.e. Japan - remember when people were afraid they were going to buy all of America back in the late 80, early 90's).
But this housing boom that we're coming down from is like no housing boom before, at least not in modern US history. It was driven by people (rich, poor, and middle class) being given access to far more credit than they were qualified to have. Now that that massive and unprecedented liquidity is drying up, the artificially inflated prices have no choice but to either come down significantly (to were they will be affordable without massive amounts of credit) or stay the same for much longer than most buyer's believed they ever would.
Now, this isn't a bad thing. In fact its good for everyone, even people who bought overpriced homes because if you're planning on sticking around for awhile then it wont really matter. At the same time you get to life in great neighborhoods that have been completely turned around. In the next few years, future buyers will get new homes, or homes in better condition than they were a decade ago in neighborhoods that are far more appealing than they were back then, AND they will be affordable. The Harlem case (which is true btw), is a good example of why over development can be a good thing in my opinion. Harlem's development ended up stunted due to redlining and discrimination, not the new Black residents who moved in to build better lives for themselves.
Now, prices in NYC will come down. When the wall street bonuses don't happen this winter, the "prices never fall" crowd will find themselves poring over NYC housing price charts from the 80's and 90's in shock. But its my opinion that this will be a good thing and people who are willing to wait it out a bit, on all sides, will win out in the end.
Posted by: guest at February 28, 2008 2:49 PM
"Prove it!"
I'm sorry, I don't quite follow which point you are disputing. Why don't you tell me, and I'll cite for you the appropriate source.
"Methinks the Ghetto's was with Jews first. Thats where the term came from."
Good point. You know the history of Venice, but not Harlem. Odd, for a black man. And why did they live in that area? Because that was the only place they were allowed to live!
Blacks moved to Harlem because there were few alternatives. Housing discrimination was rampant in those days. Do you really dispute that?
"Nope Assfuck, Every thing is black including my dick."
I think you are perpetuating the stereotype that black men think of nothing but fornication and the instrument with which they fornicate.
Posted by: Polemicist at February 28, 2008 3:24 PM
2:49
"I think that poster's point was that being Black should not be equated with being poor, even inferred."
When discussing history, politically correct notions like this are a farce. What would you have preferred I said? That Harlem was flooded with RICH black people? To say that ignores why the neighborhood declined. The jobs blacks worked in disappeared in the 1960s. The Civil Rights era, at least for blacks, was not precipitated by a bunch of hippie liberals in elite colleges. There were very real economic reasons. Discrimination was tolerated as long as you could get a job, no matter how terrible. Suddenly however, the crap jobs that went to blacks disappeared and overt racism closed the doors to even basic survival let alone prosperity.
The historical context is the issue here. As another person stated, race is only a secondary factor. At the time, blacks were THE poorest group in the city. The issue is the poorest people in the city who were arguably the most oppressed ended up with what was at the time great housing. Which is ultimately what you discussed.
Posted by: Polemicist at February 28, 2008 3:32 PM
African Americans were forced to moved to Harlem from the West Village after the Civil War draft riots.
Posted by: guest at February 28, 2008 3:37 PM
2:08 is right on the money folks.
Posted by: guest at February 28, 2008 3:38 PM
"The jobs blacks worked in disappeared in the 1960s. The Civil Rights era, at least for blacks, was not precipitated by a bunch of hippie liberals in elite colleges. There were very real economic reasons. Discrimination was tolerated as long as you could get a job, no matter how terrible. Suddenly however, the crap jobs that went to blacks disappeared and overt racism closed the doors to even basic survival let alone prosperity."
This is an extreme oversimplification. Not necessarily incorrect in some aspects, but also this does not reflect the entire picture. I'm not criticizing this piost, just making a point for the less-informed. Wikipedia is not a credible scholarly source. It's simply a starting point. If you want to really study socioeconmic conditions of blacks, start with W.E.B. DuBois and other social writers of the era, as well as more recent writing of Dr. Henry Louis Gates, etc.
Posted by: guest at February 28, 2008 3:42 PM
"So the question is, does is make sense to incentivize the creation of new housing at a time when the existing pipeline isn't being absorbed? Or is there still plenty of need and demand for new housing, just not at these prices?"
It only makes sense for those businesses that benefit from construction. Like the gold pan salespeople during the "head-for-the-exit" phase of the Gold Rush.
There is absolutely no need and VIRTUALLY no demand for NEW housing. There is only need and demand for affordibility. And that can be solved within the existing housing stock but only with significant drops in sale prices and modest drops in rental rates.
Posted by: guest at February 28, 2008 4:52 PM
4:52 - Economics 101 - supply and demand are correlated.
Therefore price drops and lower rents = higher demand and then without increased supply prices rise.
Posted by: guest at February 28, 2008 6:01 PM
3:37, that's only partially true. The 5 Points Slums were one of the worst parts of New York, and the poorest of the poor of every race lived in misery there. This was minutes north and east of City Hall. Black people also lived near the vast slaughter houses and livestock pens which were near 34th and 6th Ave. Since many black people were servants in upscale homes, they may have lived in these homes, and there was a large black population in the Village in the 1880's called "Coontown", centered around Bleeker, McDougal and Sullivan Streets. Other areas of the city had pockets of black inhabitants, especially skilled tradespeople such as iron mongers, carpenters, seamstresses, as well as teachers, doctors, ministers, etc. Even then, we weren't all poor. And of course, Brooklyn had a very large black population which lived throughout many of the towns which made up Brooklyn.
The making of Black Harlem took place relatively quickly, but is due, in great part to other populations of black folks moving to New York. At the turn of the century, thousands of people migrated north from the South to work in factories in all Northern cities, and this more than doubled the black population in New York. Real estate people used this population to block bust huge parts of Harlem, and move these people in, along with native New Yorkers. Even so, Harlem still had a significant white population up until the 1960's.
One huge difference between African American communities in Harlem and in Brooklyn - and this is important to understand both communities and their futures - much of Harlem, both commercially and residentially, was never black owned, even to this day. Landlords rented to blacks, whether reluctantly or not, but never gave up the buildings. Black people may have put Harlem on the map, good and bad, but we never really owned the majority of it. This is not true in Brooklyn, where black owners have been a mainstay in Ft.Greene, Clinton Hill, Bed Stuy, Crown Hts and PLG. That is not to say black people did not own in Harlem, of course they have and still do, but it has long been a rental community, except for some exclusive parts such as the Convent Ave area.
Just some historical perspective here. Both the What and Polemicist have valid points.
Posted by: Montrose Morris at February 28, 2008 6:08 PM
Back to say that most row houses sold or rented to blacks in the early 20th C. almost immediately became rooming houses. Tales of the greats of the Harlem Renaissance in the 1920's all talk of people such as Langston Hughes, countee cullen, P.L. Dunbar, etc, renting rooms in various places. There are also a lot of apartment buildings in Harlem, from tenements to swanky digs in places like Graham Court. The former have always been for the poor, and the latter for Harlem's elite. Harlem is a fascinating place.
Posted by: Montrose Morris at February 28, 2008 6:20 PM
The tWhat is a bitter renter.
Posted by: guest at February 28, 2008 6:25 PM
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