7 ms·

New York definitely has an affordable housing issue but a vast over supply of luxury housing (a lot still going up to) that I'd imagine a good portion of these

by whatok 8y ago

New York definitely has an affordable housing issue but a vast over supply of luxury housing (a lot still going up to) that I'd imagine a good portion of these hires would be taking up.

tfehring 8y ago
In what sense is there an oversupply of luxury housing? Are there lots of vacant luxury units?
- whatok 8y ago
  There are a lot of vacancies and nearly unheard of concessions being thrown out there. A ridiculous amount of construction as well. If there's prolonged weakness, concessions eventually turn into rent decreases. https://ny.curbed.com/2018/4/12/17227574/new-york-rent-market-reports-march-2018 https://ny.curbed.com/2018/4/12/17227574/new-york-rent-marke...
  - tfehring 8y ago
    All of that seems good and necessary - given that the median net effective rent is still over $3k/month in Manhattan, and that there's apparently room to profitably continue building, it sounds like things are headed in the right direction.
  - deleted 8y ago
    [deleted]
- SneakyMission 8y ago
  > In what sense is there an oversupply of luxury housing? Are there lots of vacant luxury units? Short answer, yes. If you're interested in detailed information about NYC housing, I definitely recommend checking out the Housing and Vacancy survey data (https://www1.nyc.gov/assets/hpd/downloads/pdf/about/2017-hvs-initial-findings.pdf https://www1.nyc.gov/assets/hpd/downloads/pdf/about/2017-hvs...)
- cowmoo728 8y ago
  The number of vacant apartments and the number of apartments listed for sale/rent are both at an all time high. Despite this, most new construction is priced at the high end of the market. In addition, there's been a big boom in ultra-high-end multimillion dollar apartments. https://www.6sqft.com/nearly-250000-nyc-rental-apartments-sit-vacant/ https://www.6sqft.com/nearly-250000-nyc-rental-apartments-si... https://www.nytimes.com/2018/03/16/realestate/brooklyn-development.html https://www.nytimes.com/2018/03/16/realestate/brooklyn-devel...
  - bko 8y ago
    New construction of expensive high end apartments help lower the prices on other units. Wealthy people will move there rather than driving up prices on dilapidated brown-stones. Its kind of how the average new car price is 30k, which is off limits for many Americans. But the new car inventory drives down the price of older models.
    - JMTQp8lwXL 8y ago
      The problem is likely more rooted in wealth inequality. As a smaller group of wealthy individuals control a larger portion of the nation's wealth, they will inevitably acquire all sorts of investments (stocks, real estate, etc) driving prices up. If there weren't luxury multi-million dollar apartments to buy, they'd be buying the brownstones anyways. And given that the multimillion dollar units sit on the market far longer than the more affordable housing stock, is there even really high demand among the wealthy to own premium housing? Luxury housing gets built because it's the only thing that's profitable to the builder once you take into account zoning and permits and regulations that need to be satisfied in order to build. What we really need is relaxed policy that allows for the profitable building of run-of-the-mill, average housing.
      - goobynight 8y ago
        Wealthy people are less likely to stay put in one place I think. Thus, there's a demand to rent multimillion dollar units for 1-3 years at a time, but not necessarily own one. Poor or average people buy a house in order to save money on rent. Rich people don't care about that amount and can easily get their stuff moved with company money. They recover the rent vs mortgage cost via increased flexibility.
throwaway2048 8y ago
Its a great example of how just building more housing isn't a complete solution, because all builders are going to target the top of the market if they at all can.
- manfredo 8y ago
  No. The price of housing is not determined by the builder. Like any good its price is driven by what people are willing to pay. Here in SF, even 230 square foot studios are considered "luxury housing" because the shortage of housing is that extreme. Any new construction commands a premium over old housing. In effect, restrictions on building more "luxury housing" restricts the construction of most new housing even if it is high density. Building more housing, and giving incentives to build as much housing as possible is indeed a complete solution.
  - throwaway2048 8y ago
    Tell that to china https://news.ycombinator.com/item?id=19171099 https://news.ycombinator.com/item?id=19171099 They have something like 65 MILLION excess, unused apartments, almost exclusively targeting the luxury market (because they are created and valued as investment first, housing second), and they still have extreme affordability issues. Building more housing is absolutely not a complete solution.
    - whatok 8y ago
      I really don't think it's fair to compare China's housing policies to the United States' policies as they couldn't be more different.
      - throwaway2048 8y ago
        Of course there are differences, merely pointing out if building more housing, even building more housing to an almost comically absurd extent solved affordability issues by themselves, China wouldn't have them.

by whatok 8y ago

New York definitely has an affordable housing issue but a vast over supply of luxury housing (a lot still going up to) that I'd imagine a good portion of these hires would be taking up.

tfehring 8y ago

In what sense is there an oversupply of luxury housing? Are there lots of vacant luxury units?

whatok 8y ago
There are a lot of vacancies and nearly unheard of concessions being thrown out there. A ridiculous amount of construction as well. If there's prolonged weakness, concessions eventually turn into rent decreases. https://ny.curbed.com/2018/4/12/17227574/new-york-rent-market-reports-march-2018 https://ny.curbed.com/2018/4/12/17227574/new-york-rent-marke...
- tfehring 8y ago
  All of that seems good and necessary - given that the median net effective rent is still over $3k/month in Manhattan, and that there's apparently room to profitably continue building, it sounds like things are headed in the right direction.
- deleted 8y ago
  [deleted]
SneakyMission 8y ago
> In what sense is there an oversupply of luxury housing? Are there lots of vacant luxury units? Short answer, yes. If you're interested in detailed information about NYC housing, I definitely recommend checking out the Housing and Vacancy survey data (https://www1.nyc.gov/assets/hpd/downloads/pdf/about/2017-hvs-initial-findings.pdf https://www1.nyc.gov/assets/hpd/downloads/pdf/about/2017-hvs...)
cowmoo728 8y ago
The number of vacant apartments and the number of apartments listed for sale/rent are both at an all time high. Despite this, most new construction is priced at the high end of the market. In addition, there's been a big boom in ultra-high-end multimillion dollar apartments. https://www.6sqft.com/nearly-250000-nyc-rental-apartments-sit-vacant/ https://www.6sqft.com/nearly-250000-nyc-rental-apartments-si... https://www.nytimes.com/2018/03/16/realestate/brooklyn-development.html https://www.nytimes.com/2018/03/16/realestate/brooklyn-devel...
- bko 8y ago
  New construction of expensive high end apartments help lower the prices on other units. Wealthy people will move there rather than driving up prices on dilapidated brown-stones. Its kind of how the average new car price is 30k, which is off limits for many Americans. But the new car inventory drives down the price of older models.
  - JMTQp8lwXL 8y ago
    The problem is likely more rooted in wealth inequality. As a smaller group of wealthy individuals control a larger portion of the nation's wealth, they will inevitably acquire all sorts of investments (stocks, real estate, etc) driving prices up. If there weren't luxury multi-million dollar apartments to buy, they'd be buying the brownstones anyways. And given that the multimillion dollar units sit on the market far longer than the more affordable housing stock, is there even really high demand among the wealthy to own premium housing? Luxury housing gets built because it's the only thing that's profitable to the builder once you take into account zoning and permits and regulations that need to be satisfied in order to build. What we really need is relaxed policy that allows for the profitable building of run-of-the-mill, average housing.
    - goobynight 8y ago
      Wealthy people are less likely to stay put in one place I think. Thus, there's a demand to rent multimillion dollar units for 1-3 years at a time, but not necessarily own one. Poor or average people buy a house in order to save money on rent. Rich people don't care about that amount and can easily get their stuff moved with company money. They recover the rent vs mortgage cost via increased flexibility.

throwaway2048 8y ago

Its a great example of how just building more housing isn't a complete solution, because all builders are going to target the top of the market if they at all can.

manfredo 8y ago
No. The price of housing is not determined by the builder. Like any good its price is driven by what people are willing to pay. Here in SF, even 230 square foot studios are considered "luxury housing" because the shortage of housing is that extreme. Any new construction commands a premium over old housing. In effect, restrictions on building more "luxury housing" restricts the construction of most new housing even if it is high density. Building more housing, and giving incentives to build as much housing as possible is indeed a complete solution.
- throwaway2048 8y ago
  Tell that to china https://news.ycombinator.com/item?id=19171099 https://news.ycombinator.com/item?id=19171099 They have something like 65 MILLION excess, unused apartments, almost exclusively targeting the luxury market (because they are created and valued as investment first, housing second), and they still have extreme affordability issues. Building more housing is absolutely not a complete solution.
  - whatok 8y ago
    I really don't think it's fair to compare China's housing policies to the United States' policies as they couldn't be more different.
    - throwaway2048 8y ago
      Of course there are differences, merely pointing out if building more housing, even building more housing to an almost comically absurd extent solved affordability issues by themselves, China wouldn't have them.