Brooklyn Housing Glut: There Isn't One, Says Local Leader

A housing glut is coming, The Wall Street Journal reported this week. Brooklyn developers have been warning investors of declining Brooklyn rents. But not so fast. We received this statement from Downtown Brooklyn Partnership President Tucker Reed strongly refuting the notion that Brooklyn is overbuilt. He says demand remains strong and more housing is needed:

“[A] Wall Street Journal article about residential development in Brooklyn, particularly Downtown Brooklyn, paints an inaccurate picture of housing supply and demand in the borough and the city as a whole and warrants additional commentary. First, the demand for housing in Downtown Brooklyn exceeds available supply, as evidenced by the most elementary data points –- rising rents and land values. Further, nearly all of the 6,700 units built in Downtown Brooklyn since the 2004 rezoning have been absorbed, leaving negligible current inventory for buyers and renters looking to enter the market. If anything, we suffer from a lack of available product today.

While an additional 5,200 units in construction and another 7,700 units in the pipeline represent a significant increase in available housing coming online in the next three to five years in Downtown Brooklyn, there is no evidence of an imminent and significant leveling off of demand (these housing figures and more can be found in our most recent Downtown Brooklyn Real Estate Market Report). In fact, as the borough continues its ascent as a globally recognized destination, there are only a few neighborhoods in Brooklyn whose flexibility in zoning allows for significant increases in density, with the rich transit infrastructure to rationally support it.

Finally, Brooklyn, like the rest of New York City, is facing a housing crisis. In a report referenced in The Wall Street Journal on June 10, 2013, Columbia University’s Center for Urban Real Estate estimates that New York City’s population will grow by 1 million residents by 2030 – 35% faster between now and 2040 than from 2000 to 2010. This would translate to 5,500 new residents a month, every month, for the next 15 years.

Similar studies also corroborate the future population explosion expected for the City. The Department of City Planning’s “New York City Population Projections by Age/Sex & Borough, 2010-2040” study projects similar growth by 2040, with Brooklyn expected to the grow by 288,000 people alone. And in Mayor de Blasio’s “Housing New York – A Five Borough Ten Year Plan,” New York City will need to add 180,000 new residential units over the next decade just to keep pace with the expected population growth. No matter which source you look at, the numbers tell a similar story – the growing need for housing is likely to continue. To assert otherwise to a marketplace that is finally producing housing in significant numbers is irresponsible and shows a lack of understanding of basic supply-based economics.”

Photo by Atomische * Tom Giebel

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