Condos Go Rental; Development Sites Go Nowhere
It’s happening. More and more condo developers are switching horses in midstream, transforming projects that were originally going to be condos into rentals, says The Sun. The big Brooklyn examples are the Kodachrome in Bed-Stuy and Dumbo’s 99 Gold (though both are ancient news). David Maundrell, the president of marketing firm aptsandlofts.com, says 95 percent…
It’s happening. More and more condo developers are switching horses in midstream, transforming projects that were originally going to be condos into rentals, says The Sun. The big Brooklyn examples are the Kodachrome in Bed-Stuy and Dumbo’s 99 Gold (though both are ancient news). David Maundrell, the president of marketing firm aptsandlofts.com, says 95 percent of his company’s projects a few years ago were condominiums, but around 60 percent are now rentals. “There’s been an enormous shift in the past 12 months,” the senior managing director of Beck Street Capital, Kevin Comer, said. “Lenders only want to lend on cash flow projects. They want to be certain that they have a fallback as a rental that works.’ And those are the projects that are actually getting built; according to Comer, “We have seen an increase in the number of investment opportunities that we see that are fully permitted development sites where the developers are just trying to get out of them.”
Credit Crunch Turns Condos Into Rentals [NY Sun]
Photo by Lisanne!.
6:13
Thanks for the props, but you apparently missed a sentence in my post:
“New construction greatly slowed, and since that time all new rental product has either been subsidized or oriented towards the upper income brackets.”
All the developers you mentioned build their projects under both the conditions I mentioned. They all built their projects using subsidized financing, most typically the 80/20 program although some have done the newer 50/30/20 program. For the market rate units, they are priced exclusively towards the upper income bracket.
I’m not going to waste too much time getting into the finer details of these programs – feel free to check out the HDC website, which has the term sheets.
4:19
Yeah, buildings that have been abandoned for decades are ideal housing for a growing city. Let’s not try and get new, modern housing for our citizens.
Have you ever been to Bed Stuy or East New York? Do you see any rentals constructed there that don’t use some kind of subsidy? Nope. East New York in particular is a hotbed for housing partnership development – all for-sale product.
That said, conversions are fairly rare. Most involve the repositioning of industrial properties to residential use.
As for the population arguments – the city had 7,322,564 residents in 1990. The 2000 census indicates there were 8,008,288 residents. They estimate that in 2006 there were the 8,214,426 residents. That is nearly a million more people. I’m really not sure I understand how or why you think that is insignificant or that conversions of burned out buildings in East New York would mitigate that growth.
11:29
Yeah, you are. And like a few of these other posts, you are ignorant of the topics about which you write.
Polemicist- so what was that? 100% wrong?
In general I enjoy Polemicist’s arguments since he brings a very different perspective to the table here. But, I’m sorry mister P – no major developer will build rental housing in the City because of the risk that they may be subject to rent control in the future? Easily one of the worst arguments ever made on this site (and that’s saying alot). Tell that to Avalon Bay, Archstone, Post Properties, Dermot, Rose Properties, and Rockrose – All major developers who have made huge investments over the past 10 years in rental housing in the City.
Polenarcissist,
Give me pop change since birth of housing boom (circa 1997 or the more parabolic phase, 2001). Yes I am very lazy and very ignorant. US Census Bureau??? Never heard of ’em.
350K units need not be constructed. Do you remember (or have you heard about) all the abandoned buildings in now hot nabes like Clinton Hill during the 80’s/90’s? Let alone ‘Stuy and E.N.Y. Conversions, my friend. Conversions. Even still, that 1,000,000 pop figure does not break down to a lot of qualified buyers today in this financial climate.
Poplulation is still roughly 8M (8,214,426) since 1997 or 2001. RIP population argument.
Actually they don’t. Look at the historical stats.
You. Are. Simply. Wrong.
3:27
Yeah, you’re lazy too. The US Census Bureau estimates there are about 800,000 more people here than there were in 1970. The city is more populace by a very significant margin than it ever has been before.
The population did increase from 1990 to now.
But there are still fewer people in NYC than there were in 1970.
2:39
I’m not want to rip into posters, especially as ignorance really is so common on this site, but sheesh.
How lazy can you be? It takes like 30 seconds to find out population demographics for a huge city like this. Ever here of the US Census Bureau? Wikipedia? Yes, ignorance really is laziness.
For the record, the population of NYC has increased by over 1,000,000 residents since 1990. Assuming an average household size of 3 persons, does anyone really think 350,000 housing units have been constructed since that time?
“foolish to ignore them as developers have for the last few years.”
The big money was (and still is) in condos, NOT rentals, so it’s not hard to imagine why developers “ignored” renters. Where have you been? In the last few years, we’ve heard several NYC developers claim they can’t make money building rental units.