Brooklyn Development Boom
In many urban areas, the housing market tightened and manifested an epidemic of overcrowding and rapid rent increases. As Ronald Lawson noted in his piece “Tenant Responses to the Urban Housing Crisis, 1970-1984”, the late 1960’s and early 1970’s witnessed severe urban decay and increased abandonment of the housing stock throughout New York City. Studies found that the housing decline was due to an economic chasm between the controlled rents landlords received and the costs associated with maintaining their buildings. Neglected properties caused concern for unsafe conditions, abandonment fires, and vandalism, and thwarted prospects for new development.
The system of rent regulations was scrutinized, and a law enacted by state legislature in 1971 provided that rent regulation would be phased out over a period of years for the majority of apartments throughout New York City, despite a measure passed by the city council the prior year that introduced a system of annual rent increases for rent controlled apartments. For tenants of stable working-class and lower-middle class neighborhoods, deregulation spawned new concerns. Tenant displacement and threats of gentrification were marked by evictions of non-purchasing tenants of cooperative conversions, and pressure by landlords for tenants to move so that units could be decontrolled and raised to market levels.
New York City has emerged from many of its housing troubles to become one of the most desirable housing markets in the nation. Gone are the rampant crime, drugs, gangs and prostitution that made the city notorious. Incentives such as tax abatements, rezoning legislation, low interest rates and the inexhaustible demand for housing have made building residential properties in the five boroughs a worthwhile investment for developers. The demand for residential development outweighs that of office and retail, and savvy developers have set their sites on Brooklyn an emerging market as land in Manhattan becomes increasingly scarce.
Baruch Torenheim, a real estate broker with The Corcoran Group and resident of Park Slope agrees. “The turnaround came about in the 1990’s when people started migrating to New York. It is a popular place to be; Brooklyn is where people want to live. Those who were here wanted to stay and those who left started coming back, and the population started to rise.” As young couples and twenty-something professionals searched for affordable housing, Brooklyn’s demographics began to change. Once a community of large families, Brooklyn became a desirable market for graduate students, single professionals and first-time home buyers. Opportunities for profitable new development lured developers, and falling interest rates fueled construction.
Neighborhoods such as Cobble Hill, Carroll Gardens, Williamsburg, Boerum Hill and Bedford-Stuyvesant have witnessed the effects of change. Hundreds of new apartments have been placed on the market and development races to meet continued demand. Development trends indicate a demand for high-end condominiums that feature modern amenities, convenience and accessibility to shopping and transportation. Prices reflect insatiable demand: units in many new developments start at $200,000 for 600 square-foot studios. Two and three bedroom apartments sell for $400,000 to $700,000. Developments such as The Toy Factory Lofts at 176 Johnson Street feature 11-foot ceilings, hardwood floors, high-speed Internet and cable access, and washer/dryer hook-ups. Boulevard East at 53 Boerum Place features an integrated home network system, maple hardwood floors, stainless steal appliances, and radiant-heated tiled bathroom floors.
Brooklyn officials are encouraging developers to build, streamlining the certificate of occupancy process to bring new buildings to market efficiently. However, Brooklyn should heed the lessons learned by many other communities that have experienced rapid growth and measure continued demand with prudence. Brooklyn’s planning officials should encourage growth without saturating the housing market, which may ultimately have an adverse effect to the positive changes that are taking place.
