What Will New York Real Estate Look Like Next Year? – The New York Times
The median rental price in Manhattan, including concessions, was $3,036 a month in September, according to the brokerage Douglas Elliman. That is an 11 percent drop from the same period a year ago, but still far beyond the means of most New Yorkers. Citywide, the median rent last year was $1,467 a month, according to the New York University Furman Center.
Rents will continue to drop citywide, in the absence of a vaccine, Ms. Wu said, but that trend masks affordability problems in several neighborhoods hit hard by the coronavirus.
In an analysis of neighborhoods with the lowest rates of infection — affluent neighborhoods like Battery Park City and SoHo in Manhattan — rents dropped 1.9 percent from February to July, largely because of rising vacancies. In the hardest hit neighborhoods — including East Elmhurst in Queens and Fordham in the Bronx — rents have actually increased 0.3 percent in the same period, and a disproportionate share of Black and Hispanic renters, many in the service industries, have shouldered that burden.
“New York has been a tale of two cities — not just in terms of the pandemic, which is known, but also with rent affordability,” Ms. Wu said, noting the dearth of options on the lower end of the market.
In sales, the boroughs beyond Manhattan are expected to recover sooner, because they are relatively less expensive, and proximity to Midtown is no longer a top priority. In August, Brooklyn exceeded the pace of sales recorded the same time last year, and Queens is on a similar but slower trajectory, according to StreetEasy.
Discounts of under 10 percent are widespread, but prices have yet to plummet, except in the ultraluxury tier. Buyers waiting for fire sale prices may be disappointed, because the market was already three years into a price correction before Covid-19, Ms. Wu said.
It is less clear what will happen in the saturated new-development market. Out of more than 20,000 condo units citywide that have come to market since 2018, nearly 60 percent remain unsold, said Kael Goodman, the chief executive of Marketproof, a real estate data company. That represents $33 billion of unsold apartments, and about 2,000 of those units have not yet even begun sales.
Instead, opponents have grown more circumspect, and the De Blasio administration, in its waning days, could push for something critics have long demanded: rezoning in wealthier, whiter neighborhoods, not the communities of color that have often been the reluctant recipients of major redevelopment.
Also in September, the city backed out of a proposal to build up to 15 mixed-use towers on 28 acres in Long Island City, where Amazon previously failed to garner support for its New York campus, because of local concerns about gentrification and inadequate infrastructure.
The Justice for All Coalition, a community group opposed to the project, explained in a letter in July: “The proposed rezoning — for the purpose of building luxury residential and commercial mega towers — is exactly what this community does not need in the face of Covid and the urgent issues raised by Black Lives Matter.”
Alicia Glen, a former deputy mayor under Mr. de Blasio, rejected that thinking.
“This is not the time to double down on the narrative that business is bad, that development is bad,” said Ms. Glen, who recently started a development firm, M Squared, which builds mixed-income housing in cities across the country. “We can’t play to the cheap seats of being against everything and everybody.”
But the disproportionate harm the virus has caused to Black and Hispanic residents in lower-income neighborhoods has emboldened another view, critics say: That the argument is not simply pro- or anti-development, but a matter of where the effort is placed, and for whom.
Millions of dollars in predevelopment costs like architectural plans, legal fees and engineers can overwhelm developers awaiting funding, said Ron Moelis, a co-founder of L+M Development Partners. His firm expected to close city financing in June on the first phase of Bronx Point, a mixed-use project in the South Bronx with 542 below-market-rate units expected to be completed by 2023. Now financing has been pushed back until at least December.
“At the exact moment in time when we as a city know that we should be doubling down, the city is pulling back,” said Barika Williams, the executive director of the Association for Neighborhood and Housing Development, a coalition of housing organizations.
And unemployment figures do not show the full scope of struggling renters, Ms. Williams said, because many who are out of work or are underemployed were paid in cash, and therefore not recorded by official counts. “We’re on the brink of an eviction tsunami,” she said.
Experimenting with new methods to create or preserve more affordable housing is crucial, said Rafael E. Cestero, a former housing commissioner who is now president of the Community Preservation Corporation, a nonprofit housing and finance company. He urged elected officials to “channel more rental assistance” to the neediest New Yorkers.
“We can’t build our way out of the housing crisis,” he said.
The Regional Plan Association estimates that 500,000 new homes, including 100,000 in New York City, can be created — and at minimal cost — if state and local governments make it easier for basements, garages and attics to be converted into legal dwellings.
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