
‘The Market Is Saturated’: Brooklyn’s Rental Boom May Turn into a Glut - jseliger
http://www.nytimes.com/2016/08/30/nyregion/the-market-is-saturated-brooklyns-rental-boom-may-turn-into-a-glut.html?mabReward=CTM&action=click&pgtype=Homepage&region=CColumn&module=Recommendation&src=rechp&WT.nav=RecEngine&_r=0
======
tvanantwerp
> That means a one-bedroom, one-bathroom place can be had for $3,428 a month;
> a two-bedroom, two-bath apartment goes for $5,057.

When the rent for a two-bedroom apartment exceeds the US median household
income ($rent is $60,684/year, median income in US is $53,657), it doesn't
sound like that much of a housing glut to me.

~~~
spaceflunky
Keep in mind that a lot of these units are still coming on the market. Sure
the prices haven't dropped yet, but landlords can only hold out for so long
and the end of that rope, that's when prices fall.

This is anecdotal, but I feel like everyone I know cares more about standalone
single family houses these days as opposed to apts. IMO Apts and condos seem
to be falling out favor, which could depress prices further. Where I live in
SF, I've seen people choose to purchase a home way outside of the city, as
opposed to getting a slightly smaller condo in the city for about the same
price.

~~~
TulliusCicero
> that's when prices fall.

Good. Low prices for things people need is a good thing.

~~~
RhodesianHunter
Good for people who need said thing, bad for people holding said thing.

~~~
mywittyname
> Good for people who need said thing,

Which is everyone.

> bad for people holding said thing.

Not really. The whole idea behind commodification is that prices should drop
to the minimum sustainable level. Sustainable means a return on investment
that is appropriate for the risk taken.

Electricity could be $20 a kW/hr and we'd all pay it. But I'm sure you don't
say that it's "bad for power companies" that they can only charge $0.12 a
kW/hr.

------
cbr
Building enough housing that rents start to come down is a great thing, and
it's frustrating that they're pushing the negative angle here.

------
kchoudhu
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
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.

~~~
crdoconnor
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.

~~~
Finnucane
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.

------
lobster_johnson
They describe the "1-2 months free" phenomenon as something new, but that has
existed for at least several years. It's the way they coax people into these
new developments. (Why people think that's attractive, I don't know; given the
absurd prices, it's a drop in the ocean if you intend to live in the same
place for a while.)

I've never seen three months offer, so maybe that's what's new.

~~~
n72
A real estate agent explained to me that the reason for this is to keep the
monthly rent as high as possible on rent stabilized apartments. Since on rent
stabilized apartments there is a maximum percent a landlord can raise the rent
annually, it is in their best interest to keep the monthly rent as high as
possible.

~~~
CPLX
That's not how rent stabilized apartments work.

It's just to report a higher monthly rent roll, for purposes of increasing the
value of the building.

------
civilian
Fingers crossed that Seattle heads for this direction!

I've been trying to imagine a scenario which would cause Amazon not to hire
for 2-3 years, (and thus tank housing prices? hopefully?) without hurting my
own (software engineering) career prospects. I haven't come up with anything
yet.

------
koolba
The trainageddon™ coming in 2019 isn't going to help Brooklyn rental prices
either: [http://www.nydailynews.com/new-york/train-shut-18-months-
sta...](http://www.nydailynews.com/new-york/train-shut-18-months-
starting-2019-article-1.2725118)

~~~
CPLX
That's completely irrelevant to Downtown Brooklyn, which this article is
about, and as mentioned is an incredibly well connected area for transit. It
has far better train service than the vast majority of Manhattan.

~~~
kchoudhu
If anything, the L train shutdown is going to drive prices up in downtown
Brooklyn as lease-terminating refugees from Williamsburg move downtown in an
effort to keep living in Brooklyn.

~~~
chris_7
I'm one of those people leaving, but I definitely wouldn't consider downtown
Brooklyn, it's not really a _place_ (in the Jane Jacobs sense). My experiences
walking around there are generally negative. the roads (Flatbush and Atlantic
especially) are monstrosities that are not scaled for humans, and are
unpleasant to walk along. Buildings are massive, set back, and imposing. It
fluctuates between overcrowded and creepily empty.

Williamsburg is a (gentrified, yes) place. An empty side street is not creepy
or deserted feeling, it's pleasant, and there will probably be some people
milling around outside of an Okonomi-type place somewhere on the walk. There
are stoops and the like.

Anyways, I see places like Park Slope and Fort Greene as more likely locations
for people leaving Williamsburg.

~~~
evanelias
Agreed, though Park Slope and Fort Greene are already both rather expensive
and low on housing inventory.

My bet for biggest price increase in the next few years is on Hoboken and
downtown Jersey City. On PATH it only takes 10 min to get from Hoboken to
Flatiron, the Village, or WTC. And PATH actually keeps to its printed schedule
tightly since it's a much shorter set of lines. The commute time is hard to
beat, especially for people fleeing Williamsburg and working somewhere around
Union Square or Flatiron.

Granted, Jersey is infinitely less hip than Williamsburg, but honestly modern
Williamsburg has more bros than hipsters anyway. And given the huge cost of
living difference (currently Williamsburg costs 2-3x more than Hoboken, and
3-4x more than JC) and lack of NYC income tax, Jersey becomes pretty
compelling. The stigma will fade, just like it has for Queens, and Brooklyn
before that.

~~~
kchoudhu
We looked into buying in JC and Hoboken before abandoning NY for good.

Avoiding NYC taxes would have been nice, but the PATH train service was patchy
at best on weekends, and the town was pretty expensive. Apparently lots of
Wall Street types had already had the same idea as you.

------
slackstation
Makes me feel better about my rents. I pay about the same here in Los Angeles
except I'm walking distance from work and have the beach and sunny weather.

$3400 is the median for the high end there, here is about the higher end of
the high end unless you start counting the ridiculous places near the beach.
But, then if you want an ocean view in Santa Monica, be prepared to shell out
$10k/mo or more.

~~~
jseliger
_I pay about the same here in Los Angeles except I 'm walking distance from
work and have the beach and sunny weather._

In most of LA you also need a car, which AAA estimates to be around $9,000/yr
in TCO terms. L.A. is slowly but surely building out a real subway system, and
maybe when the purple line is done it'll be more practical to live without a
car in LA, but that day is still a ways away.

------
mwsherman
I live in one of those buildings. It's about 12 minutes to work in downtown
Manhattan if the train timing works out.

I am unclear if this article is quoting the "net effective" rate, where the
free month is amortized over a year. Mine is around $2750 effective, while
monthly is around $2950.

------
finid
> Brooklyn, he said, is still “the coolest place on the planet.”

Does that include Brownsville and East New York?

Brownsville is were Mike Tyson and Riddick Bowe grew up. Tough neighborhood

~~~
eric_h
>> Brooklyn, he said, is still “the coolest place on the planet.”

>Does that include Brownsville and East New York?

Most people who say that are neither from New York nor have ever been to
either Brownsville or East New York, though they may have seen a documentary
that described them (and continued to pretend that places like that don't
exist in their sacred, hipster Brooklyn).

Brooklyn is cool, don't get me wrong, but "the coolest place on the planet"?
Surely not. You don't hear the sound of someone getting murdered by gunshots
1000 ft away from you while smoking a cigarette on the stoop in "the coolest
place on the planet" (true story)

(I'm not a native new yorker, but have lived here, in three of the boroughs,
for 15 yrs)

~~~
finid
For the 15 years you lived there, how many times did you venture into
Brownsville or East New York?

I don't even remember any attraction for anybody not resident in those two
places.

~~~
eric_h
Never, but I did live in the neighborhood to the west of it (Crown Heights)
for a few years (where the shooting I mentioned happened). Crown Heights is
much more gentrified now than when I lived there.

~~~
finid
Has that gentrification extended to the rough area between Eastern Parkway and
Atlantic Ave.?

------
S_Daedalus
I feel like the author of this piece doesn't have a grip on the reality of 90%
of Americans, or more.

~~~
Finnucane
Fortunately, 90% of Americans don't live in New York.

~~~
S_Daedalus
Unfortunately New York isn't the only place pricing people out of a home.

By the way, About 2% of Americans live in New York _City_ alone. At least 1%
are not having a great time with rent that outstrips their potential earnings.

~~~
civilian
As long as we're being pedants, it's actually more like 2.6% (8.406 / 318.9)
of Americans who live in NYC.

The author does have a grip on reality, I think it's just they aren't talking
about what you want them to talk about.

~~~
S_Daedalus
I don't think that opening with an insult is in the spirit of what this site
is about, do you?

