5 ms·

It'll be a glut when the cost of an average two bedroom rental 15 minutes away from lower Manhattan costs $2000. Until then: build, build, build.

Finnucane 10y ago
Never going to happen. NYC will always be expensive, no matter what. Buildable land will always be limited and expensive. Labor will be expensive. Materials will be expensive. Developers will always seek to maximize profit, so billionaires and Wall Street trader waving bonus checks and looking for investment-grade properties are going to get served before you. And you know what happens when developers perceive a 'glut' of apartments at the profitable end of the market? They stop building. The market doesn't promise that it will provide whatever you want at a price you can afford--it only promises to provide what it can at prices that are profitable to the seller.
- StriverGuy 10y ago
  Developers would also rather see their buildings empty than charge below market rent for fear of seeming like a 'low end' property.
  - billpaetzke 10y ago
    Yep. And the way the developers--on Bravo's Million-Dollar Listing--think, they not only want market price but also to set a new record for market price (per square foot).
    - TulliusCicero 10y ago
      Of course they want that; who wouldn't want more money for their business? But competition can drive the price down just like any other sector, and allowing for more housing to be built means more competition.
      - billpaetzke 10y ago
        I'm not disagreeing. Not sure why the down vote. I'm just saying that there is significant ego on the developer's side of things.
  - CPLX 10y ago
    Well that's why they give the months of free rent. When they report the rent roll of the building they just list the monthly, and it's an automatic large effective rent increase built in for the day the initial term expires.
- crdoconnor 10y ago
  A massive investment in council housing would fix the problem. When it was announced in Hong Kong that they would build ~70,000 new apartments prices plunged the next day. 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.
  - deleted 10y ago
    [deleted]
  - jbooth 10y ago
    Given the state of many of those post-war projects, I think it's gonna be a pretty tough sell to build more.
  - Finnucane 10y ago
    That's how they got the Atlantic Yards project in Brooklyn--kicked out everyone who lived in the old neighborhood, declared it unlivable, used eminent domain to bully everyone. Spent gobs of tax money. Okay, so it was done to benefit the wealthy developer who happened to be the former law-school roommate of the governor, allowing him to build an arena and luxury towers for wealthy buyers, but still.
- superuser2 10y ago
  In what world is $2000 not expensive? Pretty sure $1500 would get you a nice place less than 15 minutes from the Loop in Chicago, and the rest of us paying ~$700 for one bedroom in less convenient neighborhoods balk at that.
  - sotojuan 10y ago
    The world where Average Adjusted Gross Income is $157,833, as it is in the Brooklyn Heights/Downtown Brooklyn zip code (15 mins train ride to lower Manhattan).
    - cm2012 10y ago
      Keep in mind NYC median household income is still 50k citywide.
      - sotojuan 10y ago
        I know. I live in an area where it is below $50k. All I'm saying is that $2000 for areas of Brooklyn that are very close to lower Manhattan is not expensive for new or recent residents. It probably is for businesses or families that have rented there for decades.
  - Finnucane 10y ago
    There's one very significant factor keeping down prices in Chicago: http://www.chicagotribune.com/news/local/breaking/ct-census-chicago-losing-population-met-20160518-story.html http://www.chicagotribune.com/news/local/breaking/ct-census-...
- kchoudhu 10y ago
  A huge part of what ails New York is its degeneration into an ossified museum city that can't evolve due to terrible zoning laws. Fix that, and we can definitely get more building done.
  - jbooth 10y ago
    What New York are you in? I see multiple new high-rises each year in Manhattan, and continued gentrification/refurbishment pushing into the boroughs. TFA is talking about so much new construction in Brooklyn that it might push prices down.
    - TulliusCicero 10y ago
      Seeing "multiple new high rises" is meaningless when you're talking about a dense area that already has well over a million people. What's the net increase in housing stock as a percentage of the population? That's the key.
      - jbooth 10y ago
        Seeing "multiple new high rises" is absolutely meaningful when there are already a ton. It means that, out of limited space not already occupied by really tall buildings, tall buildings are still being built. 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.
    - kchoudhu 10y ago
      Call me crazy, but the continuous addition of $5000 per month units is not the kind of zoning New York should be encouraging.
      - omonra 10y ago
        Why? Increase in supply will affect the entire curve, thus making housing cheaper for everybody. Ie that's like making one part of the room warmer.

Finnucane 10y ago

Never going to happen. NYC will always be expensive, no matter what. Buildable land will always be limited and expensive. Labor will be expensive. Materials will be expensive. Developers will always seek to maximize profit, so billionaires and Wall Street trader waving bonus checks and looking for investment-grade properties are going to get served before you. And you know what happens when developers perceive a 'glut' of apartments at the profitable end of the market? They stop building. The market doesn't promise that it will provide whatever you want at a price you can afford--it only promises to provide what it can at prices that are profitable to the seller.

StriverGuy 10y ago
Developers would also rather see their buildings empty than charge below market rent for fear of seeming like a 'low end' property.
- billpaetzke 10y ago
  Yep. And the way the developers--on Bravo's Million-Dollar Listing--think, they not only want market price but also to set a new record for market price (per square foot).
  - TulliusCicero 10y ago
    Of course they want that; who wouldn't want more money for their business? But competition can drive the price down just like any other sector, and allowing for more housing to be built means more competition.
    - billpaetzke 10y ago
      I'm not disagreeing. Not sure why the down vote. I'm just saying that there is significant ego on the developer's side of things.
- CPLX 10y ago
  Well that's why they give the months of free rent. When they report the rent roll of the building they just list the monthly, and it's an automatic large effective rent increase built in for the day the initial term expires.
crdoconnor 10y ago
A massive investment in council housing would fix the problem. When it was announced in Hong Kong that they would build ~70,000 new apartments prices plunged the next day. 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.
- deleted 10y ago
  [deleted]
- jbooth 10y ago
  Given the state of many of those post-war projects, I think it's gonna be a pretty tough sell to build more.
- Finnucane 10y ago
  That's how they got the Atlantic Yards project in Brooklyn--kicked out everyone who lived in the old neighborhood, declared it unlivable, used eminent domain to bully everyone. Spent gobs of tax money. Okay, so it was done to benefit the wealthy developer who happened to be the former law-school roommate of the governor, allowing him to build an arena and luxury towers for wealthy buyers, but still.
superuser2 10y ago
In what world is $2000 not expensive? Pretty sure $1500 would get you a nice place less than 15 minutes from the Loop in Chicago, and the rest of us paying ~$700 for one bedroom in less convenient neighborhoods balk at that.
- sotojuan 10y ago
  The world where Average Adjusted Gross Income is $157,833, as it is in the Brooklyn Heights/Downtown Brooklyn zip code (15 mins train ride to lower Manhattan).
  - cm2012 10y ago
    Keep in mind NYC median household income is still 50k citywide.
    - sotojuan 10y ago
      I know. I live in an area where it is below $50k. All I'm saying is that $2000 for areas of Brooklyn that are very close to lower Manhattan is not expensive for new or recent residents. It probably is for businesses or families that have rented there for decades.
- Finnucane 10y ago
  There's one very significant factor keeping down prices in Chicago: http://www.chicagotribune.com/news/local/breaking/ct-census-chicago-losing-population-met-20160518-story.html http://www.chicagotribune.com/news/local/breaking/ct-census-...
kchoudhu 10y ago
A huge part of what ails New York is its degeneration into an ossified museum city that can't evolve due to terrible zoning laws. Fix that, and we can definitely get more building done.
- jbooth 10y ago
  What New York are you in? I see multiple new high-rises each year in Manhattan, and continued gentrification/refurbishment pushing into the boroughs. TFA is talking about so much new construction in Brooklyn that it might push prices down.
  - TulliusCicero 10y ago
    Seeing "multiple new high rises" is meaningless when you're talking about a dense area that already has well over a million people. What's the net increase in housing stock as a percentage of the population? That's the key.
    - jbooth 10y ago
      Seeing "multiple new high rises" is absolutely meaningful when there are already a ton. It means that, out of limited space not already occupied by really tall buildings, tall buildings are still being built. 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.
  - kchoudhu 10y ago
    Call me crazy, but the continuous addition of $5000 per month units is not the kind of zoning New York should be encouraging.
    - omonra 10y ago
      Why? Increase in supply will affect the entire curve, thus making housing cheaper for everybody. Ie that's like making one part of the room warmer.