Hacker News new | more | comments | ask | show | jobs | submit login
Could Get Millions to Turn Factory into Condos, Is Not Selling (nytimes.com)
130 points by danso 14 days ago | hide | past | web | favorite | 161 comments



But she is going to rent it out, eventually.

    > The shop closed two years ago. Since her father died,
    > the factory space is Ms. Galuppo’s to use as she wishes,
    > but she is not rushing to rent it out. Before seeking a
    > new commercial tenant, she wants to find the right way
    > to dispose of all the old equipment, file cabinets and
    > other workplace detritus.
This person just wants to move on her own timeline. That's perfectly fine. The family must be pretty flush to be able to do that however.

What would be bad is allowing the space to disintegrate like what happens in many other cities.


This wasn't clear in the article, but it appears the factory does not occupy the entire building, and several floors are already rented as office space [1] [2].

Makes sense, given the property tax bill is apparently $283,000 per year! [3]

[1] https://commercialobserver.com/2017/07/marketing-agency-prod...

[2] https://www.pivotdesk.com/locations/us/ny/new-york-city/42-b...

[3] https://webapps.nyc.gov/CICS/fin1/find001i


Plus is not like Manhattan land is going to drop in value any time soon. That's like money in the bank...unless NY decides to make them a landmark site.

For all we know they are seeking partners by saying we don't want to sell. This article was probably pitched


The land prices in Manhattan have cooled down somewhat in the last couple of years. They are now at the 2015 level (https://therealdeal.com/issues_articles/new-york-city-land-p...), so actually down a bit if counting inflation.


Do the percent fluctuations really matter if the final amount is still an absurd amount to the seller?


Yes by waiting a few years the money will double.


Please do not use code blocks for quotes. They are very hard to read on mobile.


This is a great point and I experience the same issue. Quote, don’t code block.


Its important that some robber baron from a country far away can get some condos to be left empty as investment in a dead city core. Horray for capitalism ghost towns.

Compared to that the waste-tales of socialism start to sound more idyllic every day.


'Mr. Familia, now the super of 42-44 Bond, uses the shop for maintenance work. Mr. Liang simply likes to come by. “This is my second home,” he said after a cup of tea at his desk. As for what he does now at the shop, Mr. Liang explained, “I take a look at machines.”'

This reminds me of the Anthony Bourdain visit to the Congo. They visit a defunct train station, which even after twenty years has a small band of people coming in every day, trying to keep the trains and machines in good repair, waiting for when there's sufficient government to restart the service. People love their machines...


> People love their machines...

They do - and HN readers who manage technical people should remember it. Break that bond and detachment will ensue. For example, if you are scaling up and getting rid of snowflake servers with cute names and personal history, consider giving the admins something else to bond with.


It reminds me of how more than one watch company was able to restart its mechanical watch manufacturing after employees secretly preserved old equipment in their home or in long-forgotten attics and storerooms.


Would you have an article or the name of the company. It seems like it could be a good read!


One case is with Zenith and an employee Charles Vermot. https://www.hodinkee.com/articles/charles-vermot-the-man-who...


There are several cases of steam locomotives being able to be restored to operation later because someone still came by to oil them even after they were turned into static displays in parks - SP 4449 being a notable example.


I wonder if she will ever end up regretting it? I feel like I've heard so many stories about people trying to hold on to stuff like this, but then either the government or other rich entities use the law and sketchy tactics to end up getting the building in the long run, by those other means. And then the person basically gets what they were trying to save stolen, and just regretting that they tried to hold on for a battle they would never win. They end up just losing out on making money from it instead of going down fighting and getting nothing. This may also be my cynical way of looking at it, though.


The other outcome that seems too-common is they hang onto it, and then once they pass their heirs sell it off cheap for a quick buck.

In this case she's already a heir- but there will be heirs after her.


What "sketchy tactics" are you referring to? Aside from an eminent domain seizure -- and these are quite rare -- there really isn't anything they can do to just "get" your building.


While eminent domain is the overarching legal means through which all properties are seized, there is plenty of sketchiness to be found in the process of declaring a property "blight" so that it can be seized. My city has done a good job of condemning blighted properties in terms of having 0 public scandals surrounding their decisions, but there's still a tinge of corruption surrounding every old mill that is declared to be blight only for the original structure to be converted to luxury flats with only minor modification and landscaping. "Blight" to me means a property and any structures on that property being so unfit for use that it will require significant rehabilitation (think major ddmolition and environmental cleanup) to return it to a bare-ground state before it can be used for anything else. Seizing a propery, giving it away for nothing/practically nothing, and then watching a developer flip it for a massive profit reeks of corruption when the same developers happen to be the winners over and over.

There's also the issue of slightly sketchy property tax reassessments that are a hallmark of many neighborhood revitalization projects. There is almost always a law stipulating the maximum year-over-year rate increases but slap the maximum rate on a stubborn holdout for enough years in a row and that 15% maximum annual reassessment increase (the maximum in my city) can turn even the least valuable property imaginable into an unaffordable anchor around the owners neck within a few years.


> but slap the maximum rate on a stubborn holdout for enough years in a row and that 15% maximum annual reassessment increase (the maximum in my city) can turn even the least valuable property imaginable into an unaffordable anchor around the owners neck within a few years.

Oh yes, the old 'tax them off their land' strategy.

Many old timers who 'owned' land in the gulf islands near Vancouver Island complain about that one.


OK I guess the sketchiness and corruption varies substantially by region, then. In NYC at least, though unfortunately ED plays (famously) do happen - they're quite rare, and in any case don't (simply) happen at the developer's bidding.

My whole point is: people have been (almost) making it sound like a typical speculator (in NYC) can just grease a few palms and get some tasty piece of property condemned and handed over to them.

Maybe in Rhode Island, but in NYC... no.


They've used eminent domain to seize assets for condos and such in the past, which I think is what OP is referring to.

https://www.nc-eminent-domain.com/eminent-domain-basics/priv...


But I meant ... aside from eminent domain.


misunderstood - thought you were excluding EDS as a sketchy tactic


Although unlikely in this case, but sometimes 'they' promote urban blight of entire neighbourhoods till it becomes a slum and even poor people move out, then buy the whole block of properties for cheap.


Yeah that used to happen in decades past - but as a tactic is basically apocryphal by now.

Basically in a gentrifying market (i.e. the very properties "they" are after) that tactic (even if you could pull it off these days) isn't applicable.


The ol' call-it-blight-and-seize-it trick is what happened in Wisconsin with the holdout landowners for the foxconn factory last year.

Here's the top google result for example: https://www.wisbar.org/NewsPublications/InsideTrack/Pages/ar...

Yeah, in wisconsin the post-blight-declaration seizure was through eminent domain instead of bankers and private investors, but honestly, the wisconsin shennanigans really blur that line.


Right - but again, this was part of an eminent domain play.

What I was trying to suss out is whether there's any evidence that this is a (widespread, feasible) tactic outside of ED land grabs.


Some people say the 2008 mortgage crisis was sort of a land grab.

It would probably be giving the 'financial engineers' who came up with credit default swaps too much credit to say that they planned it that way all along.

But as a side effect, tons of properties dropped in value and were, surprise surprise, sold mostly in blocks.


Real estate is the nastiest business.

Everything from systematic harassment to unleashing the local code enforcement to torching the building can be used to make your life miserable.

Light up the building and get it declared unsafe, the city then bulldozes the building and hands the bill to the owner.


OR they can raise property taxes or your appraisal to the point where the taxes aren't affordable. Then you have to sell on your terms to prevent a forced tax lien sell.


you can't raise property taxes for just one property. An appraisal could target a particular property, but fraudulently raising the appraisal value would be illegal.


Is there evidence that actually occurs in NYC?


Appraisals aren't based on the theoretical value of a land at its most profitable use. They're based on the estimated market value of the land based on its current use.


They are based on the current condition, including current constraints on use (zoning, etc.) That isn't restricted to current use (if alternative use was worth more even given current condition, such that the highest paying offer were it sold would be a buyer planning to switch uses, that would be reflected in appraisal.)


It turns out we're both wrong at least with respect to the way NY appraises property. https://www.tax.ny.gov/pit/property/learn/howassess.htm

(This is very different from how CA appraises property, and doesn't take into account how counties appraise tangible business property.)


What I said is exactly a consequence of the market method (the first assessment method listed.)


Which applies to residential properties in NY, not industrial/commercial properties, which have a "comparable use" method most similar to what I originally said.


The page linked indicates neither that the market approach is used only for residential properties nor that a comparable use method is used for industrial/commercial properties (in fact, it explicitly says that a cost based approach is used for some industrial properties.)

The closest thing to a comparable use method listed on the page is a rental-based method, for which the example given is residential.

I'm not saying you are wrong, but your claim is certainly not supported by the only authority cited in the thread.


Well, I am saying you are wrong, and quite specifically saying that the authority cited earlier says that the Cost Method (#2) based on comparable uses is used for industrial sites.

The Cost Method entails: - assessor calculates the cost to replace a structure with a similar one using today's labor and material prices - subtract depreciation - add the market value of the land - used to value industrial, special purpose and utility properties

This is not a rental-based method. #3 (Income-based) is a rental-based method, and is used for residential and commercial non-industrial (i.e., retail or office) sites.

The property mentioned in the NYT article is currently an industrial site and would be governed by method #2: replacing the current factory with a similar facility (i.e., comparable use) based on today's costs.


Messing with the power/gas hookups. Failing inspections on petty grounds. Mandating certain expensive repairs or maintenance. There are ways.


Sounds like it's not about the money for her though. But sadly, without money, the place will just deteriorate and fall apart. And who knows where that money would come from. The future is probably unfortunately already written.


But sadly, without money, the place will just deteriorate and fall apart. And who knows where that money would come from.

I wouldn't be worried about that. Unless there's some major structural issue at play, even a rent stabilized building can easily pull in enough income to keep the place from "deteriorating".


Sometimes I just have to laugh / cringe reading HN.

The detailed analysis of how this woman who wants to hold on to a piece of sentimental property is actually mistaken, is destroying the neighborhood, is willfully naive for not exploiting her position to make as much money as possible, etc, etc is predictable but tiring.

Fears about about "cash being the sole nexus between human beings" seem pretty realized on HN. It's as if no one - or at the very least the VC crowd - accepts that anyone could be doing anything _other_ than living their life in pursuit of profit.

And if they are, they're ignorant, naive - even selfish - for not aligning their intent with a profit motive.


Reminds me of the last cornfield in the middle of Silicon valley. The field is worth millions if sold to a real estate developer but every year without fail there is a new crop of corn planted and harvested. I imagine it belongs to some aging retiree who sits on his/her rocking chair and watches the corn grow while harried tech executives in Teslas navigate rush hour traffic on the Lawrence expressway.

https://www.google.com/maps/@37.3622129,-121.9960813,3a,75y,...


The corn palace is owned by two 90-year old brothers who have farmed it forever. I don't know if they're still around.

I believe there is a documentary movie someone made about it maybe in the 90's.

It used to be bigger but the part furthest from lawrence expressway must have been parceled out because it was developed into homes.


And every year the corn field presumably becomes even more valuable.

Sounds like a smart investment strategy.


I live in Irvine, CA. Broadcom just built a multi-billion dollar campus (that's my crude understanding, maybe it's wrong; I work with what I hear). They are juxtaposed on 2 sides by agriculture fields. It's interesting to think about, as I drive by it frequently (it's on the way to my wife's office and the freeway).


Except for one thing that I don't think anyone has mentioned. This is a common ploy on behalf of owners of real estate to get the highest price for the property w/o appearing openly that that is what they are doing. Of course it's always suspected that is what they are doing. But it's really old school. You say you don't want to sell, won't sell, not at any price, reject all offers until one comes along that is so high you finally engage in the transaction.

I have actually run into this before many times.

Also part of the tell tale sign is that she plans to rent it out. That is another signal that she just plans to wait. Most likely the lease will be written in a way that allows her to terminate it if she wants with some kind of liquidated damages payment.

Now I have seen people not want to sell 'at any price' genuinely because they do run a business, don't need the money, and most importantly (and this is key) it gives them something to do. Typically they are older people who want to show up for work every day. This woman doesn't fit that MO though.

My bet is it's a selling strategy.


I never really cared about making more than $5m until I realized that the profit motive[0] is going to destroy everything because it dumps everything into arms races and as human power goes up, due to increased scientific advancement and the accelerating search space for technological combinations that provide greater economies of attack asymmetry, negative externalities begin to dominate the world. Especially in areas where attribution is impossible, since deterrence isn't possible, or in areas where outcomes are unpredictable, for the same reason.

I just wanted to have fun and create a little garden for myself. Now I have to become some ugly combination of Soros, Orwell, and Nader[1] because the people with money right now are all people that cared about money, or—ethically better, but consequentially worse—they're techno-optimists.

[0] The feedback function, really. Startups are just organizations in search of a feedback function.

[1] Yes. I'm aware of the irony.


Why do negative instead of positive externalities have to dominate?


because then someone would step in to profit from the positive externalities

You're making some big leaps in your interpretation vs what's actually being said. I don't see a single comment saying she should sell because money is all that matters. A few comments are saying if she sold it to a housing developer that would create more housing - which is objectively true - and then asserting that more housing would be a good thing given the housing shortage - which is a value judgement you are free to disagree with, but not at all the same as saying profit is all that matters.


if she sold it to a housing developer that would create more housing

Maybe. In that neighborhood, it would likely be very expensive condos, which would likely not be rented by someone already living in New York. I really doubt the extent to which all this new luxury construction is actually easing the housing problem, versus just creating additional demand akin to what happens when you add a lane to a highway.


I feel like profits need a re-branding campaign. It's so easy to paint them as a negative, and even the most vocal capitalists will shrug and suggest they're something neutral.

Profits are a signal, and a powerful one at that. Outside of rent seeking, which I regard as fairly rare, profits signal that an entrepreneur is delivering value in excess of the costs to produce the value. Spread out over the size of a community, region, or nation, that's like magic!

Furthermore, they're not cold and unemotional, as is suggested here. Value almost always has an emotional component. The profitable condos that people want to build aren't going to be inhabited by automatons. They'll be inhabited by people - people who will date, get married, have children, people that will graduate from high school and college, people that will march in parades, protest in political movements, enjoy and create culture. To look at the value that companies want to create in this space like a shameless cash grabs ignores the very humanity that assigns that value in the first place.

Profits are not evil. They're a signal of efficient production of value, and value implies a benefit for humanity.


Profits are not evil on their own: the choices of which costs that are paid, and which costs are externalized (read: paid for by someone else without a correct combination of consent and total knowledge) all together add up to some value on the virtuous-neutral-vice scale.


Profits are what drives the economy forward. They provide the capital to expand operations and create new ones.

They also provide the surplus needed to deal with pollution and other externalities. It's not a coincidence that unfree economies are the worst environmental disasters.


> Outside of rent seeking, which I regard as fairly rare

This is a big assumption to make. Successful rent seeking is very much a constant interest of profitable organizations--why would a business leave low risk, high margin money on the table? Competition for rentier status would be just as lively as market competition were it not for regulation, and even with it the focus only shifts to competition for regulatory capture.


That’s too reductionist.

Big corps are making huge profits while laying people off.

Pursuit of an outcome alone isn’t enough. The process too must be in service to humanity at large to reach your conclusion.

Too many processes today benefit a minority.


I feel like sweatshops need a re-branding campaign. It's so easy to paint them as a negative, and even the most vocal capitalists will shrug and suggest they're something neutral. Sweatshops are a tool, and a powerful one at that. As opposed to outright slavery, which I regard as fairly rare, sweatshops are used by entrepreneurs to deliver value in excess of the costs to produce the value. Spread out over the size of a community, region, or nation, that's like magic!

Furthermore, they're not cold and unemotional, as is suggested here. Value almost always has an emotional component. The profitable clothes that sweatshops produce aren't going to be worn by automatons. They'll be worn by people - people who will date, get married, have children, people that will graduate from high school and college, people that will march in parades, protest in political movements, enjoy and create culture. To look at the value that companies want to create in sweatshops like a shameless cash grab ignores the very humanity that assigns that value in the first place.

Sweatshops are not evil. They're a tool for efficient production of value, and value implies a benefit for humanity.


Yup!

Sweatshop (n.) Factory located in a country whose peasant farmers are so poor that I'd rather not think about them, and serving an export market.


People who work in sweatshops do so because the alternatives are worse. The sweatshops tend to disappear as the surrounding economy gets more prosperous, and people have more choices.


Money can't buy happiness, but it can buy a jet ski, and I've never seen a sad person on a jet ski.


For some people money isn't that important or the end all of everything. So we get articles like this with "shocking" behaviors of people who "could be rich but don't do X." It's an interesting commentary on our society.


When you have too many people living in the past, you get the mess San Francisco is in with NIMBYs blocking market rate housing projects, declaring rundown laundromats as “historical landmarks” and fights over shadows.


This is the inverse of NIMBYism, which is about telling other people what they should do with their property... which is exactly what many of the people on this thread seems to want to do with respect to this woman.


Lol did they really declare a laundromat a landmark? I swear the tactics that certain people will do to get their way....


No; they just made the project sponsor pay $20,000 for a study to confirm that it wasn't historic. The cost of that study, and the time it took, and the uncertainty it added to the process, will all get factored into the price that people eventually have to pay for these desperately-needed, much-delayed homes.


No, they didn't, after years of legal battles the plans to build on that site were finally approved. https://hoodline.com/2018/09/plans-for-8-story-mission-devel...


Both the laundromat and the new building they want to construct are pretty numb. When I look at the architecture of the early-to-mid 20th century I can't help but feel we've lost a lot.

These days economic architecture reigns, and probably for good reason. It's no longer affordable to have ornate brick-work or any kind of embellishment. Interiors are functional and efficient, we've done away with unnecessary mouldings and again dispensed with ornate detail in general.

I wonder how the economics of the property market used to bear the additional cost of all that extra work? Were people just more proud of what they made, or was labour just so incredibly cheap that making a building beautiful made little difference to the bottom line?


I think physical presence was more important to a company’s “brand” in the past. Those were marketing dollars that are now spent on website theming / sophisticated animations / well-polished apps.


The more interesting side of it IMO, is this situation has all the markings of Capitalism actually working well. Housing is a scarce and expensive resource in Manhattan that people are willing to a pay a lot for, and a factory will likely function just as well if moved a few miles away where land is cheaper. If she sells it everyone is better off, and she makes a ton of money.

Yet just because there is personal sacrifice involved lots of people seem to be applauding her for not selling.

Edit: Anyone care to explain why if you're downvoting? I'm genuinely curious why people seem to think this is such a bad way to think about it.


No one has the moral right to monopolize land. Land is not the product of human labor, it should not be possible to hoard so much natural value. If people want to own land, they should have to pay a steep tax for the privilege.


So hundreds of people who could live in those condos will instead have to commute from further out, or pay more for an alternative apartment, or not be able to pursue their New York dreams at all. Why is that something we romanticise?


So she should be forced to abandon a working factory for someone else so use the space? Is your house bigger than you absolutely need? Do you have a garden? Would you like to be forced to give it up so multiple smaller living units could be built?

It is hers, she can choose to maintain it for its current use if she wishes, unless it is causing harm. There is a grey area here with derelict sites, as that is a waste of space and often they can be dangerous, but that does not appear to be the case here.


FWIW it sounds like it's not even a working factory any more.

A rich person has every right to burn a pile of money or spend it on some extravagant luxury, but we still consider it distasteful when they do. Particularly when that pile of money is unearned, which seems to be the case here - it's only an accident of birth, and an accident of factory location, that means the factory is now on such valuable land.

In my ideal world there would be a land value tax so that people paid a fair rate to the rest of society for the land they were taking up, rather than the lottery of buying land once and owning it forever.


> FWIW it sounds like it's not even a working factory any more.

In that case it falls into the derelict site grey area and genuinely wasteful, not providing any real worth even to the current owner's whims.


[flagged]


Property taxes and land value taxes are absolutely not the same. Unlike property taxes, land value taxes do not cause any deadweight costs, as the supply of land is fixed and can even increase allocational efficiency.


Property taxes require people to pay a portion of the assessed value of property they hold.

Land value tax implies the existence of a third party with no aligned incentive that punishes you for not using your property in the manner they deem most suitable.


It's not that hard to assess land value objectively. You can just base it on neighboring properties.


This should not have been downvoted (at least the first part of the comment). The commenter before explicitly stated in his ideal world land would be taxed at a fair value instead of people purchasing it and owning forever..


She shouldn't be forced to give it up. But she also shouldn't be praised for holding onto it.


Agreed.


You're attacking a strawman. The parent comment said nothing like you're making it out to have.


Someone has something. Many people could benefit from them letting someone else do something with it. They don't want to. Where is the difference?


OP never said anyone should be forced to do anything.


I see your point. Forced was far too strong a word to use in that position.

Nagged maybe?


"Not romanticized."

IMHO, the reaction to a story like this should be "shrug" or "cool building, interesting story", not "what a hero!"


This is not a fair argument. Why should you assume that condos is the 'correct' thing for this land and factory is the 'wrong' thing? Isn't that for the market to decide? What if I told you someone was offering to buy the property to replace it with an orphanage, would you say this woman is denying poor, helpless children a place of refuge?

Isn't this woman exercising her property rights in a perfectly fair way within the market economy that we have, in exactly the same way that so many developers have exercised their rights to tear down X and replace it with Y, where many people might have preferred to keep X?


She is an irrational actor who is preventing a more efficient allocation of a scarce resource.

If she weren’t so notably irrational, the New York Times wouldn’t be writing an article on her.


She's not "preventing a more efficient allocation of a scarce resource." She's "preventing reallocation of her own resource." Good for her!

Only she knows what's best for her property. There's nothing irrational about doing what you want with what you got. It's the opposite that's irrational.


>Only she knows what's best for her property. There's nothing irrational about doing what you want with what you got.

Wait, so is it supposed to be the market deciding or this one lady?


There is no difference? The market is the sum of the decisions of individual actors.


Actually... She is being irrational, because her decision is clearly made on emotional grounds.

But it's her right. I hope it bites her, but it's her right to be irrational.


Though that's the story being portrayed (because "fully rational person does fully rational things" doesn't get many clicks/much interest), it's quite possible that the actual strategy is as suggested here: https://news.ycombinator.com/item?id=19119286

she is not rushing to rent it out. Before seeking a new commercial tenant, she wants to find the right way to dispose of all the old equipment, file cabinets and other workplace detritus.

Rushing into things, taking the first offer, etc. This is irrational. Finding the right way to "dispose" of equipment, i.e. finding the highest bidder or, failing that, the closest scrapyard, before finding a new leasee, is not irrational.


> She is an irrational actor

Human beings are deeply irrational, not everything has to be tweaked for maximum output / productivity / efficiency / optimisation.


There is a nationwide housing crisis in city centers, so yes, this could stand some tweaking for more efficiency.


Sounds like an inevitable problem of too high of a population density. We have plenty of land elsewhere, maybe we should be looking at fixing our transportation systems and incentivizing work outside of these areas so that we don't have to all pile together like cords of wood.


Few American cities are very dense at all. Density is more efficient, cheaper in hidden infrastructure costs, better for the environment, and promotes walking for better health.


Irrational if all you care about is money. Pretty rational if you care about preserving your heritage and history.


Luckily we don't live in a society where people are forced to allocate their resources to where other people think they are most efficient.


From the article, given the area it's in, it doesn't sound like it would necessarily host low-income or middle-class families. Call me cynical, but I see those condos being someone's third or fourth home and being empty half the time.


> it doesn't sound like it would necessarily host low-income or middle-class families

So what? An increase in housing supply results in lower prices for everyone. If the "rich" are buying a condo in location A, that means they're likely not buying that condo in location B. That means the price has to be lowered since now A and B are competing. If A and B are competing for rich people, that means less "rich people" demand in location C.

In a place like Sunnyvale, houses are exceeding $1.5 million for essentially starter homes. If there were a larger supply in, say, Palo Alto, that would mean less demand in Sunnyvale, which means more people could afford to live there even if they couldn't afford Palo Alto. There just aren't enough places for sale in the area, so even if someone wanted to buy at the higher-end, the supply is constricted which means they have a lot of money to spend elsewhere. Increasing high-end housing in Palo Alto necessarily decreases demand in lower cost neighborhoods in the area. In short, building more housing for "rich" people frees up more housing for everyone.


In short, building more housing for "rich" people frees up more housing for everyone.

This is not true. Building too much housing for rich people simply results in a lot of empty housing. See for example, Manhattan or Vancouver, which have hundreds of empty condos that could be occupied by locals but are instead owned by wealthy foreigners who leave the units vacant.


By and large, rich people invest in real estate because, in most urban areas, it is an increasingly scarce, and therefore increasingly valuable asset. It's a good investment.

The solution is not to give up and stop building real estate, making it an even more attractive investment. The solution is to build so much real estate that we tip the balance, and make real estate unattractive to speculative investors.


The solution is to build so much real estate that we tip the balance, and make real estate unattractive to speculative investors.

The market can stay irrational for a long time. China has spent hundreds of billions on empty housing in planned cities the past few years, and they're still going due to speculative investor demand.

Let's face it: the evidence shows that the easiest and most cost effective way to deal with this problem is market-informed regulation.


Wealthy foreigners is orthogonal. There are policy solutions that can target it directly. For example, property taxes on units left vacant should be higher.



So... Wealthy foreigners buy in Brooklyn or Williamsburg... Raising the prices in places there. I'd say - just kill all "rent stabilization" in sub-100th st on Manhattan and move all social housing out. Sell the land to the millionaires and put up sales taxes for non-residents elsewhere in NYC to 50%. Let the millionaires fight it out in Manhattan... they already do that today!


Raising the sales tax to 50% for non-residents wouldn't accomplish anything since the problem is that the non-residents aren't residing in NY.

Sales tax doesn't apply to real property sales, so presumably you meant to suggest a real estate tax that would only apply to non-residents...which could be trivially avoided by hiring a token caretaker to pay utility bills, turn on the lights, etc., to make the property look occupied (which is what Chinese investors have been doing since Vancouver introduced the vacant property tax.)


Even if the housing is not luxury condos for the rich, as long as real estate is appreciating, the economic incentive is for rich people to buy them and leave them empty, like a bar of gold sitting in a vault.

This is happening a little bit in my working class neighborhood. House goes on the market. It’s listed as sold, family moves out, nobody moves in. Likely some millionaire’s 8th empty investment house.


> So what? An increase in housing supply results in lower prices for everyone. If the "rich" are buying a condo in location A, that means they're likely not buying that condo in location B. That means the price has to be lowered since now A and B are competing. If A and B are competing for rich people, that means less "rich people" demand in location C.

This kind of intuition rarely work in real life though. People migration flows and the housing market isn't a A+B=C type of problem.


How many (mostly) empty places do you know of in Sunnyvale or Palo Alto? I know of many in NYC, e.g. this dentist from out of state who has an apartment in the UES. The markets are different at the middle and high end. (By the way, I do remember the days when Bay Area housing was quite cheaper than NYC...)

This kind of "trickle down" in NYC real estate exists, sure, but it doesn't spread very far. You could make more difference for "regular" folks if e.g. you added mixed-income restrictions on the new property, but by default the market doesn't work that way.


> You could make more difference for "regular" folks if e.g. you added mixed-income restrictions on the new property, but by default the market doesn't work that way.

Research [1] shows that these types of restrictions lead to the exact opposite: A shrinking supply of affordable housing and rapidly rising property prices.

[1] http://smartgrowth.umd.edu/assets/documents/research/knaapbe...


+100000 - New York and Federal government fails to address the massive difference of income value between places. An annual income of 50k in Houston is equal to 100k in NYC... That also leads to lower middle class being subsidized heavily by the rest of the middle class. Which leads me to the ultimately retarded 80/20 rule in "affordable" housing in NYC.

Who pays the difference between that $1200 600ft2 apartment occupied by a single New York "artist" and the market price of the rent for the same apartment occupied by a working family of two?

That middle class in NYC needs 2x more money to have as much as middle class in Houston...


Except you need to live in Texas. You’d have to pay me 10x to live there.


I've read that the sense of smell is the strongest sense for bringing back memories. When I read the title of the OP I could smell what the inside of the building was like from having spent many hours in similar environments.

Why preserve it? Because its better for our spirit to preserve some memories of the past rather than tearing them down for another handful of forgettable multi-million dollar condos.


I like when someone's primary motivation is not personal greed. It is a rare and beautiful thing.


Why are other people entitled to live there?


Why should someone forfeit their wishes only so you can pursue yours? You're saying one persons greed is more valuable than the other.


Of course some forms of greed are more valuable than others. If one person's greed is "I want to make ten million dollars so I can create some jobs" and another's is "I want to make ten million dollars so I can put it in the bank and feel accomplished," all other things being equal, just about everyone from Reagan to Bernie to Jesus is going to say that the first person's greed is more worthwhile.


I agree with your ideals, but when our financial systems are favored towards the second person's preferences that ideology doesn't mean anything in practice because it is not systemic. Trying to handpick cases like this to decide who is more worthy or not isn't fair when that same scrutiny isn't passed upon nearly anybody else. Im not sure we would even have think about this case if we taxed capital gains higher than income. If people want to sit and do nothing with something with our current version of capitalism, they should be allowed to, provided they are willing to pay for it with a bit higher tax rate. I don't think doing otherwise will lead to anything besides present more avenues for corruption within our current economic model. Now if all factory property was put under scrutiny of public ideal and no longer privately owned, maybe something could be figured out, but without knowing what economic model to assume in that place there are a near endless number of potential solutions.


It’s called private property.

I have an extra bedroom. It would be maximally efficient to rent the room, but I prefer to put my luggage in there.


The cheapest unit next door at 40 Bond Street is ~$3M. This building would only be housing elites who can live elsewhere.


Increased inventory takes pressure off everyone. Also, she could perhaps stipulate restrictions on the new owner, though would probably take a monetary hit to do so.


Because it's romantic, an optimistic fantasy, to believe freedom of choice and personal responsibility will become valued over "I am special" and "world should work around me" attitudes.

It's not owner's job to fulfill other people's dreams or to mitigate other people's poor lives.


> In contrast to these cool glass and granite residences, 42-44 Bond is a tawny brick loft building. Its arched windows represent a classic feature of the late 19th century Renaissance Revival style. Some would say it could use an update.

I think it looks great, but could use a clean-up instead of an update.

https://www.google.com/maps/@40.726082,-73.9929773,3a,60y,19...


Agreed! I wish it were still possible to build buildings that looked like this.


Wow, and here I was thinking that this headline format was finally dead.


Reading the article about what is inside...

Why not turn the whole thing into a museum? So people in the future, in the age of 3D printers, will know how things were made before them...


Because running a museum requires a constant input of money and there are already many measuems that house manufacturing equipment.

She's probably contacted museums already and they've probably either told her that none of the equipment she has is of historical significance or that they'd love it but they don't really have a budget for acquiring stuff. There is somewhat of a surplus of old machine shop (basically what this business was) equipment. People retire, sell most of their stuff to other shops or individuals and keep a few of their most versatile machines for themselves (and their kids then sell or scrap them). Stuff doesn't usually get scrapped until it's a) totally clapped out or b) inherited by someone wealthy enough that they're not gonna bother selling old machines for a grand or two and would rather just call a scrapper to clean everything out. Also, the larger size machines that most production shops like this aren't worth much because the market is basically limited to other shops and a few industrious individuals and other shops already have equipment (and if they don't they're rarely buying old stuff).


Do industrial themed apartments, have a mini museum up front with a couple of the cooler machines and measuring tools. If she needs to keep machining to satisfy her fathers wishes save a couple 1000 sq/ft and buy a few modern CNC machines that can do the job of the existing antiques.


Old factories are a charming feature of many New England towns as well. I used to work out of a converted factory office in my hometown. Every few years the owners of the property say that they're going to redevelop it into housing, but they haven't yet. If you're interested in checking out the inside of one, the Noble and Cooley drum factory[1] in Granville Massachusetts offers tours.

1: http://www.ncchp.org/


Looks like she is planning on renting to a commercial tenant.


She should. It's probably not against her father's will to use (part of) it for good purposes. As said above, it would turn into costly ruins otherwise.


When Anchor Steam Beer sold to Sapporo during the beer slump they were good enough to look after their landmark Potrero Hill brewery building to make sure it wasn't converted into yet more San Francisco yuppie hutches. https://www.brewbound.com/news/keith-greggor-explains-sold-a.... 'San Francisco’s commercial real estate has been on fire for years, and we have been in Potrero Hill since the late 1970s. The property is worth a lot of money. Their goal is to preserve Potrero Hill and enhance it. They think it is a jewel within the brewing industry. It was not an option for us to have someone buy the brewery, stick it in the desert and then turn the building into condos. That would have destroyed Anchor’s legacy.' The Japanese seem to take US heritage more seriously than the locals...


She can get millions without selling. She could walk into any bank and get a $10M line of credit the same day from this property. This could be arranged in 24 hours or less.


I had to laugh when I saw the Bridgeport mill in Manhattan. One of the craziest things I've ever seen is Autodesk's facility on a pier in SF (https://www.autodesk.com/pier-9). They have a room with floor-to-ceiling wall-to-wall glass looking onto the bay bridge with an absolutely clean Bridgeport mill. That says "$$$" like nothing else.


Fill me in, why is a Bridgeport mill in Manhattan amusing? Honest question - all I know is it's a piece of nice looking machinery.


because nearly all heavy industry has moved out of manhattan. maybe amusing is not the right word- there is no english word for the feeling of nostalgia you get when looking at an incongruous historical artifact of high quality.


Lease it?

Also, modern building techniques could probably make it feasible to erect a high-rise that straddles the original factory without displacing it (maybe carve out a small area for an entrance/small lobby depending on how much of the lot the existing building takes up).

Though having to avoid damaging or obstructing an existing structure might make construction extra-challenging and add to the expense.


I thought people owned the first 500 feet of airspace above their property. Also that's a very expensive solution.


Perhaps TheShop.build, the successor to TechShop, might be interested. They want a NYC location. They can use those good Bridgeport mills.


How I wish they had a NYC location. I've been ruminating over a product a could really use this to make some parts. NYC resistor unfortunately is not equipped enough.


Really misleading headline. It will gentrify like everyone else, the factory has already been closed for two years! Jeeeez!

And she’ll get even more millions if she waits. She can also develop apartments, collect rent, and maintain ownership. And she can wait as long as she wants to do either.

EDIT: of course she needs to pay property taxes but that’s her choice isn’t it


Not precisely, no.

Her taxes will still be assessed on the market value of the property - meaning she's got to have enough revenue from the business (or just general personal wealth) to pay taxes on what the government will assess as incredibly valuable land, for a factory.

She can easily end up with a net loss. Or draining all her resources until she ends up having to sell anyway.


> And she’ll get even more millions if she waits.

Probably, but maybe not. 2008 happened; something like it could happen again.


I bought 15 houses in 2009. Still own them. Have collected more in rents than I paid for the houses.


Was the title of this changed to remove pronouns? Bizarre choice.


she will sell or lease it in 2 years


Lease, yeah. The article makes it pretty clear that she probably will lease it.


This is why we need a land value tax. If she wants to hold onto that property, she should have to pay out the nose.


If you don't like NIMBYism, you certainly shouldn't be supporting this.


If she really isn't in it for the money and wants to honor the building and area's working class history, she'd develop it into affordable/low income housing.


I admire her perseverance and wanting to preserve blue collar work, but why not sell at a premium and then move to a more affordable area and improve her factory with the added capital, maybe expand (jobs and capacity) and modernize her tooling to produce even better tools?


The factory has been closed for two years according to the article. I wouldn’t modernize that shop, bridgeports are workhorses. Tools like that aren’t made anymore.


Because per the article, one of her father's last wishes was that she not sell the factory.


She should just ship the machines over to China as that country seems better able to appreciate the art of manufacturing.


Ha ha, downvotes! I'm no more enamored of my observation than are thou, but sometimes the truth stings.




Applications are open for YC Summer 2019

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: