‘The Market Is Saturated’: Brooklyn’s Rental Boom May Turn into a Glut
nytimes.com
nytimes.com
When the rent for a two-bedroom apartment exceeds the US median household income ($rent is $60,684/year, median income in US is $53,657), it doesn't sound like that much of a housing glut to me.
$45/mo mortgage, 924 sq. ft.: http://www.zillow.com/homedetails/5-Preston-Park-Rutland-VT-...
$90/mo mortgage, 1513 sq. ft.: http://www.zillow.com/homedetails/25-Merritt-Ave-Kingston-NY...
$78/mo mortgage: http://www.zillow.com/homedetails/221-Mckinley-Ave-Williamst...
$87/mo mortgage, 924 sq. ft: http://www.zillow.com/homedetails/81-Barbara-Ave-Prospect-CT...
$87 PLUS $396 HOA fee to live in a mobile home in the boondocks. Yea no thanks...
Some of us just like keeping the neighbors at arm's length.
Q R 94
https://goo.gl/maps/EWKQyStTpeA2
Point being, not every one is like you.
This is anecdotal, but I feel like everyone I know cares more about standalone single family houses these days as opposed to apts. IMO Apts and condos seem to be falling out favor, which could depress prices further. Where I live in SF, I've seen people choose to purchase a home way outside of the city, as opposed to getting a slightly smaller condo in the city for about the same price.
When I looked around I wanted to be near city transit. Under 1500 one bedroom was the target. I couldn't find anything with good build quality. Sure there were stainless appliances, granite counter tops. But the cabinets were particle board easily chipped. The appliances while stainless were small, and inefficient. The walls were paper thin, etc. Among my friends they target homes, due to the build quality of the apartments, not because they want them specifically.
Good. Low prices for things people need is a good thing.
Which is everyone.
> bad for people holding said thing.
Not really. The whole idea behind commodification is that prices should drop to the minimum sustainable level. Sustainable means a return on investment that is appropriate for the risk taken.
Electricity could be $20 a kW/hr and we'd all pay it. But I'm sure you don't say that it's "bad for power companies" that they can only charge $0.12 a kW/hr.
http://www.chicagotribune.com/news/local/breaking/ct-census-...
I'm just saying that there is significant ego on the developer's side of things.
Eminent domain could be used to seize land and develop affordable housing. It would be fought tooth and nail in court by property developers but they couldn't possibly argue that providing more affordable housing isn't for the public good (though they would try). Against strong enough political opposition they would lose.
We've been here before. After world war 2 there was a program to build affordable housing in New York for returning vets. If we did it in 1945 we can do it again.
The property market isn't a god to be appeased and it shouldn't be treated like one.
TFA is talking about so much new construction in Brooklyn that it might push prices down.
Most of Manhattan is about as developed as it can possibly be, short of replacing 20-story buildings with 50-story buildings or something (probably not profitable). The push to the boroughs is the bigger portion of new housing stock for our income class.
Yes, a few blocks in the west village are still really short, but that's about it for all of manhattan.
Ie that's like making one part of the room warmer.
I've never seen three months offer, so maybe that's what's new.
We got a month free and have no broker fee. With these conditions, we're actually paying pretty close to market rent. I probably wont be sticking around for longer than 2 years, so we got a pretty decent deal all things considered.
Market rent in my area (Bed Stuy) is $2200/mo for a 2BR. I'm splitting $3000/mo.
Let's assume I'm staying 2 years and that the $2200 apartment would charge one month's rent as a broker fee (standard practice, often higher). I got one month rent free for my apartment and no broker fee.
$2200/mo room * (12 mo * 2 years + 1 month of broker fee) = $55000 total for 2 years.
$3000/mo room * (12 mo * 2 years - 1 month free) = $69000 total for 2 years.
So, the difference is $14000 / 2 people = $7000 per person over 2 years, or $3500/year over market rent. This comes out to 2-3 months extra per year per person.
...
The real question is, is it worth it for what I'm getting? I made the decision that yes, thus far it's worth it.
Could I have gotten something cheaper? Sure. I was paying less when I lived in Manhattan ($900/mo!). But I like having central air (very few NYC apartments do), I like having no neighbors above/below my bedroom (I DJ/produce in my spare time and I wouldn't want to bother anyone. Also in Manhattan I had a situation involving a neighbor upstairs...), I like living across from the train (cheaper apartments are at least a few blocks walk), and I like having a good amount of space to myself. It's nice to have roof access, and the apartment is quiet and bright.
As a software developer I'm making enough to not feel strained budget-wise. I think it makes sense to spend a little extra on living in a nice place. Lord knows there are enough crappy apartments in NYC.
That's what I just said...
> The real question is...
Not really. I was just pointing out that your amazing free month of rent isn't really amazing at all.
It's just to report a higher monthly rent roll, for purposes of increasing the value of the building.
The same thing happens with houses. You'll see a house for sale for $200K w/ a $10K bonus back to the new owner.
A drop in rent/house price tends to be much more permanent than just giving cash back.
My impression is that a lot of people in conventional, market-rate NYC housing move ever 1 – 3 years and concomitantly try to keep their "stuff" (http://paulgraham.com/stuff.html) footprint small and mobile. I wonder if companies like Campaign Living (http://www.campaignliving.com/) will help this general trend.
I've been trying to imagine a scenario which would cause Amazon not to hire for 2-3 years, (and thus tank housing prices? hopefully?) without hurting my own (software engineering) career prospects. I haven't come up with anything yet.
Williamsburg is a (gentrified, yes) place. An empty side street is not creepy or deserted feeling, it's pleasant, and there will probably be some people milling around outside of an Okonomi-type place somewhere on the walk. There are stoops and the like.
Anyways, I see places like Park Slope and Fort Greene as more likely locations for people leaving Williamsburg.
That said, a lot of people move to New York for work, and care about one thing only: how long it takes to get to and from work. The supply of places 10-15 minutes from lower Manhattan is surprisingly limited, and downtown Brooklyn is likely to come up on any shortlist of places to look when searching for apartments.
My bet for biggest price increase in the next few years is on Hoboken and downtown Jersey City. On PATH it only takes 10 min to get from Hoboken to Flatiron, the Village, or WTC. And PATH actually keeps to its printed schedule tightly since it's a much shorter set of lines. The commute time is hard to beat, especially for people fleeing Williamsburg and working somewhere around Union Square or Flatiron.
Granted, Jersey is infinitely less hip than Williamsburg, but honestly modern Williamsburg has more bros than hipsters anyway. And given the huge cost of living difference (currently Williamsburg costs 2-3x more than Hoboken, and 3-4x more than JC) and lack of NYC income tax, Jersey becomes pretty compelling. The stigma will fade, just like it has for Queens, and Brooklyn before that.
Avoiding NYC taxes would have been nice, but the PATH train service was patchy at best on weekends, and the town was pretty expensive. Apparently lots of Wall Street types had already had the same idea as you.
$3400 is the median for the high end there, here is about the higher end of the high end unless you start counting the ridiculous places near the beach. But, then if you want an ocean view in Santa Monica, be prepared to shell out $10k/mo or more.
In most of LA you also need a car, which AAA estimates to be around $9,000/yr in TCO terms. L.A. is slowly but surely building out a real subway system, and maybe when the purple line is done it'll be more practical to live without a car in LA, but that day is still a ways away.
I am unclear if this article is quoting the "net effective" rate, where the free month is amortized over a year. Mine is around $2750 effective, while monthly is around $2950.
Does that include Brownsville and East New York?
Brownsville is were Mike Tyson and Riddick Bowe grew up. Tough neighborhood
>Does that include Brownsville and East New York?
Most people who say that are neither from New York nor have ever been to either Brownsville or East New York, though they may have seen a documentary that described them (and continued to pretend that places like that don't exist in their sacred, hipster Brooklyn).
Brooklyn is cool, don't get me wrong, but "the coolest place on the planet"? Surely not. You don't hear the sound of someone getting murdered by gunshots 1000 ft away from you while smoking a cigarette on the stoop in "the coolest place on the planet" (true story)
(I'm not a native new yorker, but have lived here, in three of the boroughs, for 15 yrs)
I don't even remember any attraction for anybody not resident in those two places.
By the way, About 2% of Americans live in New York City alone. At least 1% are not having a great time with rent that outstrips their potential earnings.
The author does have a grip on reality, I think it's just they aren't talking about what you want them to talk about.