Goldman Following Through on Bed Stuy Housing
Goldman Sachs may be plowing some of the profits it made from the subprime crisis back into one of the Brooklyn neighborhoods hit hardest by the meltdown. Two years ago, we reported that Goldman was teaming up with BRP (the developer behind The Clermont and the Home for Old Ladies) to build an 84-unit project…
Goldman Sachs may be plowing some of the profits it made from the subprime crisis back into one of the Brooklyn neighborhoods hit hardest by the meltdown. Two years ago, we reported that Goldman was teaming up with BRP (the developer behind The Clermont and the Home for Old Ladies) to build an 84-unit project with lots of affordable housing on the site of a row of abandoned walk-ups on Fulton Street between Marcus Garvey Boulevard and Albany Avenue in Bed Stuy. (The group ponied up close to $10 million in late 2007 for the buildings and air rights that come with them.) Yesterday, the Bed-Stuy Blog reported that a construction fence has gone up in front of the buildings in anticipation of a controlled demolition with asbestos in place; the abatement is set to begin within the next few days. For more background analysis of Goldman’s Urban Investment Group, check out My Brooklyn Report. GMAP
Photo from Bed-Stuy Blog
I always love the banker hate. There’s never any hate for the people that passed up fixed rate loans for ARM’s so they could save $25 a month on their mortgage.
I didn’t work with mortgages, but I know a lot of people who did. It wasn’t at all common for them to offer the two options, explain the differences between the two and then have the client choose the arm to save a little money in the short term. Even when they (and certainly not all mortgage bankers did this) repeatedly told them they could get screwed at the reset date, most people didn’t care. They came to believe the real estate market only goes up, interest rates always stay low, and they’ll never have a problem refi-ing in the future, and they wouldn’t be told anything else.
Reminds me a of a political cartoon I saw after the financial crisis in ’98. It had a picture of two middle aged people standing before a stockbroker’s desk. Behind the broker was a generic chart showing the stock market selling off as it did in August/Sept that year. On the front of the couiple was a label that said “The 90’s investor” and above them was a quote bubble that said “What’s this word ‘down’ you keep using?”
I started as astockbroker in ’98. Despite my youth, I’d always been a very conservative person when it came to money. I didn’t put my clients into internet stocks or let them day trade. I counseled them to get out of consolidated positions of company stock (like when you hold most of your wealth in your employer’s stock). I got called stupid, unethical (they felt I was only making recommendations to generate commissions), and a lot worse. Why? Because everyone wanted the big 30, 40, 50% etc. annual returns that CNBC was flashing all over the place. They didn’t have any concept of the risk to get those returns and didn’t want to have it explained to them.
I actually had a few ex-clients call me post ’01 and aplogize. It was a nice vindication.
Anyway, back on point, the simple fact is that while GS (whom I don’t care for myself), BofA, etc. are easy targets, greed was easily found on both sides of the table, and without it on just one of the two sides, this mess would have been avoided.
Damage Control
***Bid half off peak comps***
JFB: DIBS just likes to say “screwed”.
Stock Market up again. Think I might buy a coop just to get out of being a renter, while I wait for the market to go down some more before buying a brownstone.
What does that even mean?
We’ll see who gets screwed come November elections.
Are tax-payers getting screwed just another crazy conspiracy theory?
LOL
Joe, don’t you think there will be larger benefits than just to pay the taxes to the city? There will be construction and then retail employment opportunities. The multiplier effect to the community and the taxpayers as a whole will be far greater.
Besides, I bet no one is paying anything on those properties as they now stand.
Try and think beyond “someone getting a deal on something and the taxpayer getting screwed” for once.
I wonder what kind of tax break they will be bestowed for this “charitable” activity. Due to this huge tax deduction how much will the taxpayers of Bed Stuy (or better NYC) have to make up? That would be an interesting graph to chart…
dcb, dopey do-gooder. Back in the old days (20th century) if a bank wanted to sell a non-corforming loan(conforming=20% down, ltv 80% max)they would have had to keep it in their own books. Once they got the chance to sell to fnma/fred they made all the loans they could so they could collect the “fees”.