What Happened to the West Village?
nybooks.com
nybooks.com
Parking a few million dollars in a Manhattan apartment is desirable because it's unlikely to lose value and you can actually use it when you visit. But if all the apartments are owned by people who mostly don't live there and only visit a few times a year, the thing that made them valuable - being located in a desirable, dynamic city where lots of people live and work, is no longer going to be true and they're going to lose value.
Cities should implement punitively high property taxes on any homes or apartments that are not used as a primary residence, either by the owner or a tenant.
https://ny.curbed.com/2019/3/27/18283292/pied-a-terre-tax-re...
I'm not clear how you conclude regulation is needed; self-regulating systems are exactly where gov intervention is not required.
Generally (well, tautologically), people are interested in living in desirable areas. What is the benefit to the citizens of the city of allowing homes in those areas to be used as investment vehicles for wealthy foreigners? Why should they care at all about the interests of people who aren't going to live there?
Prioritize people who actually live there and if some billionaire who lives somewhere else absolutely must have a pied-a-terre, they can pay 20% or 50% or however much of the value of the home each year for the privilege.
Well, this does not sound right. But I saw punitive taxes are a very popular opinion in some places.
Anyway, imgabe argued that having more and more apts owned by rich folks that don't live in them changes the city for the worse, reducing the value of these apts as well. I'm arguing that having rent control means there is a base of people who live there and keep the city/neighbourhood thriving, thus (as a side effect) helping the expensive apts keep their value.
It's an interesting point, but I don't think would crack the top 10 list for reasons rent control is bad.
Over the summer I took the train in to walk around the village and was heartbroken. Half the stores along 8th st are indeed boarded up. Shops I was familiar with were gone. The eerie part that struck me was how empty village was. Sure there were people walking around but not the hustle and bustle of all walks of life prowling the shops.
It's been sanitized. And thats whats happening. The white glove suburbanites are doing their damndest to scrub away New York City's "dirty" history so they can live in/visit their septic utopia devoid of unsightly things and people. And the same thing happened to Williamsburg too. They killed my home and I increasingly feel like a stranger in my own city.
It has everything to do with exploding rents, which themselves are due to the consolidation of commercial (and residental) ownership, changes in yield expectations from real estate, changes in global capital availability, and the benefits that accrue to owners at scale when property lies vacant.
And the complete lack of energy or imagination from De Blasio.
I have personally seen commercial rents rise by 10x in some extreme cases, from contract to contract, with 2x-4x being more common. When demand isn't there at those prices capital rich owners often can wait and take paper "losses" while the neighborhood takes real losses.
The internet has created an environment where it is incredibly easy for landlords to find tenants and dramatically decrease the cost of tenant churn for them. This allows them to raise rents much more aggressively, and quickly, than they could have done in the past.
Why does this happen in Japan but not NYC or SF? National, not local zoning. State level would probably work too.
> Why does this happen in Japan but not NYC or SF?
I don't think zoning is the complete answer here -- there's a lot of stuff going on in Japan, and in Tokyo in particular, that's very different from the US.
For example, a lot of cheaper places are tiny and have no shower or a shared shower. I don't think a lot of Americans would be willing to deal with that, but Japan has a public bath culture/history.
In Tokyo in particular, there's a huge amount of public transportation options, which allow people to live farther out and commute easily (with the commute costs being covered by work) -- that's not as simple in NYC. Imagine living in White Plains and commuting to the heart of Tokyo every day in a reliable, timely fashion.
Another thing is that a lot of cheaper housing in Tokyo is just old (post-war wood construction with a veneer of modernity) or in just plain bad areas (low-lying areas near rivers, below the water table, on reclaimed land, far from hospitals/fire departments, etc.)
On top of all that, housing here just isn't an investment like it is in America. Nobody's house or apartment appreciates with age.
It's not as simple as pointing at the average rent and zoning.
Japan also has the interesting issue (like you mentioned) that buying a house or condo is not an investment which I find fascinating. It suggests to me not that housing prices always go up just because of "economics" but also partly by culture and belief. People in many places take it for granted that real estate prices go up so they go up. They expect them to go up. Japanese take for granted that real estate prices go down. To them buying a house or an apartment is like buying a car. After you buy it it's used car / used house and no one wants that (well, less people want that), they want new so price goes down on non-new stuff. If I understand correctly there are only a few small areas of Tokyo (Meguro being one) where prices of used apartments are going up. If you can buy the land, the land prices might go up but if you're buying an apartment/condo you're not buying the land.
I dug around a bit and I can't find anything outside of some articles with people wondering if those apartments are still worthwhile with the number of public baths going down.
I know I've seen train ads for new ones as recently as last year -- it might be worth mentioning that all of these apartments are inside the Yamanote, which explains why they don't have baths... cut everything possible to keep the rent down to something someone could normally hope to afford.
Housing itself is never the investment. It’s the land upon which the home sits, and I’d be willing to bet that land in Tokyo is expensive (though not as much as the infamous bubble highs) and probably increasingly so with improving amenities.
I've watched some walkaround videos of Japanese urban residential districts, and what I've noticed was their different approach to zoning. There are no front lawns or backyards, the doors lead right into the street or into a tiny courtyard. On the other hand, most houses are just a few storeys tall, there are no giant residential towers.
How many high rises made from stone and brick have been torn down in NYC to make room for modern buildings? New England has a ton of really old wood houses that people pay a premium for.
That's one of the major differences with Japan too -- a lot of housing is not meant to be multigenerational; it's built with the knowledge that the next person to buy the lot will be tearing it down and building a new house.
A lot of the cheaper stuff in Tokyo is older wooden housing that either survived the firebombing or was tossed up cheaply in the post-war years, so it's very no-frills. My current apartment, for example, is raised about 30 cm off the ground with nothing around the actual building -- you can actually peer under the building and see the light from my kitchen going through the floorboards. There's storage built into the floor and if you pick it up, it just exposes a giant hole to the ground. No insulation, single-pane glass, a bathing room with rotting concrete and tile.
I'm not saying all old housing in the US is better, but I definitely feel like building codes and/or initial quality was much higher in the US, so you have more buildings that were able to last longer (or through survivorship bias, the ones that lasted this long are just better) -- but in Japan, for whatever reason, you have a lot of these (almost literal) shacks with uninsulated walls and corrugated plastic panels on the roofs or across the windows.
There are plenty of giant residential towers and more going up all the time.
The difference there is that there are laws that protect rights to sunlight, so it's difficult to build taller buildings in an established neighborhood: https://www.japantimes.co.jp/community/2014/08/24/how-tos/ne...
If this were true, then all the US cities without zoning should be getting cheaper. But they aren't. They are also getting more expensive, and at similar (sometimes even faster) rates as major coastal cities.
> If you build enough housing that demand equals supply prices will be stable.
If this were true, then all the cities losing population should be getting cheaper. (Demand falling with stable supply should decrease prices). But they aren't, these cities are also getting more expensive, and at similar (sometimes even faster) rates as major coastal cities, despite the drop in demand.
If this were true, then all the cities outbuilding their population growth (cities where new units exceed new residents) should be getting cheaper. (Supply greater than demand). But they aren't, these cities are also getting more expensive, at similar/faster rates as major coastal cities.
> (Tokyo) property prices and rents are basically flat because they’ve built more housing.
No, Tokyo property prices are flat because they allow housing and land to depreciate, they don't artificially prevent that from happening.
The US does prevent this. The US does everything it can in basically every city to prevent depreciation from happening (often at the city, county, state and federal level).
If we had let the banks fail in the mortgage crisis last decade, for example, we'd have a much more accurate housing market in the US. But since instead, all housing in every city is guaranteed to appreciate, and since the full faith of the federal government forever backs that guarantee over a long enough time, there's no reason for property values in general to not go up.
Every investor with cash who wants the highest risk-free returns is looking at this situation and thinking "it's free real estate".
...by which you mean Houston, since it's the only one. Houston is also getting more expensive, so that doesn't invalidate your point, but a control size of one is concerning. :)
Well, and Minneapolis, and Grand Rapids (which has had no SFH zoning for over a decade straight now, but despite this, has had endured a ~2.5x increase in housing prices, and almost a 2x increase in rents). But yeah, Houston is a perfect example of this too.
And of course, 70%+ of all cities in the Midwest have no enforced zoning. They have zoning laws on the books of course, but regularly waive them with variances for almost every project that requests one.
I get that in California specifically, zoning rules actually have a little bit of bite, so in California specifically, fighting zoning rules might be a good thing, and HN is very California-centric, so people's opinions on topics are heavily influenced by their local situation.
But California is not the whole of the US, that tactic won't work anywhere else, because by Californian standards, the rest of the country effectively already has almost no zoning. (Either literally, or effectively through waivers/variances).
Every other mid-sized-or-larger city in the US is already in "build baby build" mode 24/7, and it's only ever increased prices everywhere it's happened. This should be clear to anyone who has ever paid for an property assessment -- property is valued almost entirely by the cost of the nearby property. The more valuable anything nearby gets, the higher prices everyone will have to pay.
Part of Dodd-Frank made it extremely difficult for contractors to finance new spec houses, or any housing that didn't participate in a federal multi-family housing program. Only the most financially stable companies could stay in the market.
Otherwise, construction companies have to find customers (to do the actual financing) before they can start building. This means the market is always trying to catch up, but never really can.
https://streeteasy.com/blog/data-dashboard/?agg=Median&metri...
We should be building significantly more, but this shows the continuum. Tokyo > New York City > San Francisco
I’m not familiar with the exact building restrictions in West Village but I assume there’s strict height restrictions that have been grandfathered in long ago...I’m going to guess these restrictions is the exact reason why the ultra wealthy can just buy up a small building and make it into a SFH, which obviously just exacerbates the housing problems in the neighborhood.
The story touched on this a bit but also seems like every time I visit half the stores are either closed or new because rents are so high for businesses. The only stores that I see have staying power are the ones that look like obvious money laundering fronts like jewelry stores. It’s this strange ghost town for retail.
> The Landmarks Preservation Board protects the facades of historic buildings, but not their interiors. Thus landmarking led townhouses once divided into multiple apartments to be converted into single-family mansions for the incoming super-rich—serving only to further inflame the speculative energies that skyrocketed the prices of the buildings they preserved.
Manhattan is the most populated it's been since 1960. [1] And the idea that "huge swaths" of apartments are "Saudi Arabian" investments is simply ridiculous. Yes, there are some, in a handful of ultra-luxury buildings, that is far less than 1% of buildings. It doesn't change the social fabric of the city at all.
And the idea that "huge parts of the population" are "wealthy Chinese and foreign" who "don't really work jobs"? This is so utterly and completely false I can't even imagine how you or your friend would develop this idea. I don't know where you're getting your information from, but it's just 100% not true at all.
[1] https://en.wikipedia.org/wiki/Demographic_history_of_New_Yor...
First of all it's a well documented phenomenon that NYC apartments are being bought by wealthy foreigners to invest and/or launder money without actually living there. As a result, these wealthy areas are eerily empty:
"In a three-block stretch of Midtown, from East 56th Street to East 59th Street, between Fifth Avenue and Park Avenue, 57 percent, or 285 of 496 apartments, including co-ops and condos, are vacant at least 10 months a year. From East 59th Street to East 63rd Street, 628 of 1,261 homes, or almost 50 percent, are vacant the majority of the time, according to data from the Census Bureau’s 2012 American Community Survey." [1]
The increasingly empty storefronts in Manhattan are also well-documented. Anyone who's lived in Manhattan for multiple years has noticed this - commercial venues shutting down, and either remaining vacant or being replaced with Chase bank retail branches or megachains.
There are a ton of trust fund kids who don't work, noticeably more compared to any other city I've lived in. Of course it's probably a minority, but doesn't change the reality of it.
[1] https://www.nytimes.com/2014/10/26/realestate/pieds-terre-ow...
> "In a three-block stretch of Midtown, from East 56th Street to East 59th Street, between Fifth Avenue and Park Avenue, 57 percent, or 285 of 496 apartments, including co-ops and condos, are vacant at least 10 months a year. From East 59th Street to East 63rd Street, 628 of 1,261 homes, or almost 50 percent, are vacant the majority of the time, according to data from the Census Bureau’s 2012 American Community Survey."
The Times quote does not demonstrate your statement. It demonstrates that a significant chunk of a portion of Midtown is owned by largely-absent owners. It does not demonstrate at all that these owners are "wealthy foreigners to invest and/or launder money without actually living there".
The joke is the city is looking into giving "grants" for small businesses to move into storefronts instead of trying to fix the actual issue. Basically just feeding the bubble.
I also wonder if you have enough cash to buy and hold NYC apartments, wouldn't your money do better in some sort of a REIT?
These tall expensive condo towers are like totems to the wealthy absentee residents of New York.
People are saying they can't get an apartment in NYC. Which is met by disbelief by people who actually live in NYC.
I believe this might be due to the fact that people are really saying that they want a, say, lower Manhattan apartment but can't afford the good ones anywhere. These are probably upper middle class people trying to live a bit outside their means. It's not really that they can't afford NYC, they just don't want to live in Harlem. Or even in Brooklyn, which actually has pretty nice apartments. When I look around Harlem or the Bronx, I don't think, "empty".
Not being able to live where the rich people live is not a problem that society should spend much time solving. I'm one of the very comfortable upper middle class. Yet I don't have a Ferrari, nor do I own a condo on Miami Beach. (Or Manhattan for that matter.) That doesn't mean that society has some sort of housing and car imbalance that it needs to address.
There may indeed be an imbalance nationally, but NYC is definitely not any kind of example of one.
Yes there are plenty of bankers, yuppies and Russian billionaires to account for much of the city's real estate volume, if that's your point.
The StreetEasy report the article is inspired by actually shows that in 2019 there were more condos sold than completed.
Housing generally underperforms the overall market.