What Happened to the West Village?(nybooks.com)
nybooks.com
What Happened to the West Village?
https://www.nybooks.com/daily/2019/10/09/what-happened-to-the-west-village/
74 comments
There was an attempt to implement just such a tax in New York City but it failed.
https://ny.curbed.com/2019/3/27/18283292/pied-a-terre-tax-re...
https://ny.curbed.com/2019/3/27/18283292/pied-a-terre-tax-re...
That's too bad. I think I read about Vancouver, BC implementing a similar tax and it being helpful.
So... It's a self-correcting problem that will naturally find some equilibrium? The price goes up, it becomes worth using as a bank, but eventually bank usage leads to price reduction and thus not as valuable as a bank.
I'm not clear how you conclude regulation is needed; self-regulating systems are exactly where gov intervention is not required.
I'm not clear how you conclude regulation is needed; self-regulating systems are exactly where gov intervention is not required.
You're missing the part where the correction involves the economic collapse of a major city.
I don't know if 'desirable neighborhood becomes less desirable because of over-gentrification' is necessarily 'economic collapse of a major city'.
Even if it doesn't take out the whole city because no one can afford to live there, the people governing the city have a duty to represent the interests of the people who live there.
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.
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.
The "self regulation" has the lag time where neighborhoods get ruined and housing goes to waste for the benefit of the ultra-rich to stick their money in a place where it is doing harm to society.
You can go directly for confiscation, it is just a 100% tax in the first year. You can also ask to pay it in advance. You cannot go more punitive than that.
Well, this does not sound right. But I saw punitive taxes are a very popular opinion in some places.
Well, this does not sound right. But I saw punitive taxes are a very popular opinion in some places.
Ironically, strong rent control policies help the rich exactly because of this dynamic. The city is thriving while its most valuable real estate is empty.
Please explain for those of us who fail to see the connection.
Note that I'm not saying rent control is bad.
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.
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.
Occupancy with rent-control is virtually 100% and guarantees the desirability of non-rent controlled units in the same area.
It's an interesting point, but I don't think would crack the top 10 list for reasons rent control is bad.
It's an interesting point, but I don't think would crack the top 10 list for reasons rent control is bad.
This scenario is happening in the French Quarter. Or really, has already happened.
I used to hang out in the village from around 96 or so to the late 00's. The place was packed with all sorts of people visiting the numerous quirky shops, many of which lined 8th st. Punks, metal heads (me included), hip hop, skaters, artsy and bohemian types, tourists, from high school kids to elderly. There was real life there. Record stores, book stores, comic book shops, clothing and fabric shops, collectibles, gaming, etc. We'd go to bleecker bobs and go to this grugy dude in the back and order black metal imports. Generation records always had tons of vinyl and they had a great band tee shirt collection. The chess shop was few doors down and one friend was a frequent player.
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.
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.
Has nothing to do with sanitization, frankly.
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.
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.
Cities are becoming expensive for two main reasons. People with unlimited funds buy them up because its an investment you can actually use, and dual income couples cannot move to smaller places where it is possible that only one of the two can get a well paying job in their chosen profession.
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.
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.
Cities are becoming more expensive because of zoning. If you build enough housing that demand equals supply prices will be stable. Tokyo’s population has gone up 50% over the last two decades and property prices and rents are basically flat because they’ve built more housing.
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? National, not local zoning. State level would probably work too.
> property prices and rents are basically flat because they’ve built more housing.
> 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.
> 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.
Do you have any stats on apartments without baths? I know apartments with no showers exist but I haven't seen one since 2000. I don't know how common they still are. Prices of new apartments and houses are not that high (well, relative to NYC, SF). Sure there are expensive places like Meguro, but I see ads on the subways all the time for brand new 100m^2 apartments for ~$400k (I guess that's to your point that they are further out but don't a lot of people takes trains in to NYC from far away? I know Google offers buses from Walnut Creek to the Google Campus. That's 50 miles which I think is further than most of the reasonable prices places you can live in Tokyo)
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.
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.
> Do you have any stats on apartments without baths? I know apartments with no showers exist but I haven't seen one since 2000.
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.
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.
Apart from internal migration patterns, Japan is experiencing a demographic decline, which could be reflected by a drop in housing values.
Zoning, building codes, and land use / value capture are all policies from which your observations stem.
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.
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.
Most American houses shouldn't appreciate with age either, as they are made of wood frame and mineral insulation, both of which degrade must faster than brick or concrete.
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.
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.
I’ve lived in a house from the 1940s and it only needed a new roof. There’s a log cabin a common ancestor built in the early 1800s that was made from whatever was around.
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.
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.
> I’ve lived in a house from the 1940s and it only needed a new roof.
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.
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 definitely no lawns in the city, but usually houses will have a little yard-like area even if it's just for parking bicycles. Land is expensive, so it's a bit of a waste to put a lawn where you could have a larger room if you've bought the land at current prices. Older family houses will definitely have lawns, often complete with a little family shrine.
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...
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...
> Cities are becoming more expensive because of zoning.
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".
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".
> If this were true, then all the US cities without zoning should be getting cheaper.
...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. :)
...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. :)
> by which you mean Houston, since it's the only one.
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.
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.
A doubling over the course of a decade is not really concerning. That is the expected doubling time if prices increase 7% yoy, which is slightly under (some would argue a lot under, maybe almost half) the return on stocks. In so far as housing is a form of investment for those willing to buy and rent, then one would expect that the return is around the rate of (basically) risk free return on the stock market.
The simple root-cause is that people are moving back to the cities right? Flight to the suburbs has reverted for now. Ironically the high prices are driving people back to the suburbs once they have kids.
Source for any of your claims? It’s extraordinary to claim that something is not subject to supply and demand.
In addition to zoning:
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.
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.
NYC is probably not a good example to use here. Its median property prices are negative this year and flat for two years before that. It's likely (IMHO) that the post-recession building boom is a factor.
https://streeteasy.com/blog/data-dashboard/?agg=Median&metri...
https://streeteasy.com/blog/data-dashboard/?agg=Median&metri...
It's a perfect example for exactly that reason. NYC is expensive, but not as expensive as cities like San Francisco, precisely because we have more apartments here.
We should be building significantly more, but this shows the continuum. Tokyo > New York City > San Francisco
We should be building significantly more, but this shows the continuum. Tokyo > New York City > San Francisco
SF has built more units of housing per capita than NYC for seven of the last ten years that I have data for.
That’s interesting—I hadn’t seen that! It’s really more a question of absolute supply, though. NYC is a lot more dense than SF.
Another difference to consider is the superior transit infrastructure which allows for a much larger viable region to live in if you work in Manhattan, versus San Francisco within the Bay Area.
Cities change...it’s the longing for days past that created the housing crisis in SF in the name of preservation.
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.
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.
There is a section that addresses that specific point:
> 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.
> 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.
I guess this is what they call a "hot take", but it's simply impossible to preserve a neighborhood's character and keep it affordable. You either have to build the same type of residences upward (in the city), or adjacent (in the suburbs), or have prices go through the roof, or have a period of crisis and collapse clear everyone out.
Was speaking with someone recently about the city feels increasingly empty. There are less store fronts and such for sure, but huge swaths of apartments in NYC are investments. They may sit vacant for years on end for some Saudi Arabian wealth fund. There are certainly reports of the dropping population, but in other ways things feel tangible. Living in NYC you come to discover how small of a world it is, disparate friend groups may in turn know each other, how big is this city really? Neighborhoods feel emptier, huge parts of the population of the city are from wealthy Chinese and foreign backgrounds (this is not to disparage them). They don't really work jobs or have traditional careers, but fill the city, making it seem more hollow.
Sorry, but I feel like you or your friend must be getting this from the media and not from personal experience.
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...
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...
Why are you dismissing his personal observations with such a condescending attitude?
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...
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...
> 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."
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".
> "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".
Yea, there are a million other articles that talk about wealthy foreign Chinese investors and Russian oligarchs laundering their money through Manhattan real estate if you're interested in learning more about that.
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>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.
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.
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've heard the same thing said about London. By people with PhDs, no less. It isn't true here any more than it is in New York.
I've lived here for five years, just giving you my take on the city as I see it and as others that I know see it. Not trying to start a big argument, there's also a difference between statistics of a city and how it feels to live in.
Are there really that many empty apartments? I am sure they exist, but are there really enough of them to make a dent in the market? Having lived in the city for years, I've never actually seen one.
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?
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?
If you look at the new residential sky scrapers like 432 Park around 10pm on a weeknight when most people should be home, you'll notice it's mostly dark.
These tall expensive condo towers are like totems to the wealthy absentee residents of New York.
These tall expensive condo towers are like totems to the wealthy absentee residents of New York.
Well maybe that's a bit of the problem.
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.
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.
Guess you're not from NYC based on your post. So Brooklyn is the highest price real estate these days, with many apartments, brownstones and lofts renting for many 000s per month. Harlem has gone through a renaissance, with townhouses on formerly blighted blocks undergoing renovation and selling for $2-5MM. These are places that were used as crack houses in the late 80s and 90s. Word has it, new arrivals to the city are moving way up in the Bronx, but the commute is next to impossible. Suburbs are also ridiculously expensive places to rent or own. The problem, as this article states, is not yuppies wanting to live beyond their means, but an entire city full of wealthy. Yes, if you're a successful professional, you can afford something, but that pool of affordable housing is shrinking daily. I worked and lived in NYC for 30 years and I don't recognize it today.
NYC is definitely an example of a housing imbalance. It has nothing to do with UMC types not wanting to live in Harlem. It has to do with the fact that prices are ridiculous throughout the city. The quality of building you get for what you pay is way out of whack. The housing stock is old and generally low quality.
The prices are “in whack” for a sufficient number of people, as evidenced by the transaction clearing.
And the prices are deeply out of whack for large numbers of homeless people, broke people, uninsured people, people with unhealthy commutes, etc.
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.
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.
You might enjoy this series: https://youtu.be/-55jtMMLJxk
It’s a problem at the high end (which is most of what’s been built lately) https://www.nytimes.com/2019/09/13/realestate/new-developmen...
Does the data presented in that article really suggest that the apartments are actually empty or is it simply that it takes a while to sell out a new development? It's going to take a while to move a hundred units, especially if you want to increase the profits.
The StreetEasy report the article is inspired by actually shows that in 2019 there were more condos sold than completed.
The StreetEasy report the article is inspired by actually shows that in 2019 there were more condos sold than completed.
Where do you put 1 trillion dollars when your main goal is to just preserve it or lose just a little?
> just preserve it or lose just a little
Housing generally underperforms the overall market.
Housing generally underperforms the overall market.
Yeah but you cant jam 1 trillion into any asset vehicle at all, and even if you could, you need to diversify. Portfolio theory 101
The only people with that problem are running sovereign wealth funds.
IMO that should be invested in the infrastructure and social services of your nation to create a more educated and productive populace which will return the investment in the form of taxes.
IMO that should be invested in the infrastructure and social services of your nation to create a more educated and productive populace which will return the investment in the form of taxes.
The author explicitly acknowledges that the result of rent control is nepotism. Why is someone's friend's niece a better resident of this neighborhood than anyone else?
When nice places for people become too expensive, the obvious thing to do is to make more nice places for people. In America, however, it is only legal to make more nice places for cars.
What does this have to do with the issue in the article? In fact, it even mentions someone likely parking illegally, probably due to a lack of spaces.
It might be quite eye opening to learn 2000 square foot storefront in Manhattan starts around $10000 a month in the cheapest (ABCD) parts.
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.