Saturday, March 16, 2013

Downtown Brooklyn booming? Well, with rental towers, at least (but that's not what the rezoning was for)

A couple of major articles describe how Downtown Brooklyn is the site of numerous new housing towers, which suggests that the neighborhood is coming of age as a residential district, with attendant retail, nightlife, and street liveliness.

There's nothing wrong with additional residential density, of course, but the 2004 Downtown Brooklyn rezoning provided property owners and developers huge increases in the value of their land without demanding affordable housing--though some buildings, indeed, will have 20% low-income units.

However much a bustling Downtown Brooklyn is seen as a success, surely Council Members, city officials, and even housing advocates would have to admit a missed opportunity. After all, aren't "jobs" more important than "affordable housing"?

As Council Member and urban planner Brad Lander told City Limits in an 11/30/11 article on the aftermath of the rezoning, "I feel like it was all done with nearly zero attention to those issues of equity and sharing the benefits of development.”

“A certain amount of residential is not just good, but very good,” observed Rob Perris, District Mnager of Community Board 2, who called the Brooklyner rental high-rise a planning mistake, given that it's sited adjacent to MetroTech, a location that could be used for an office tower.

Also, as Atlantic Yards critics have noted, the rate of new towers, and the availability of financing, call into question the Atlantic Yards Development Agreement to which state officials agreed in 2009, allowing Forest City Ratner to build the 16 towers over 25 years rather than the long-promised ten years (and the acknowledged possibility of 15 years).

From The Real Deal

A 3/1/13 feature in The Real Deal, Brooklyn’s building bonanza: Developers in the borough are constructing new (and big) rental towers in force, explained how rental, not condo units, make financial sense:
In Brooklyn, “you buy land for 65 percent less than you could in Manhattan, but the rent [you’re collecting] is not 65 percent less,” explained Andrew Barrocas, CEO of residential and investment sales brokerage MNS. “It might be just 15 or 20 percent less.”
In the recent past, about 70 percent of the city’s new rental development occurred in Manhattan, according to a report by the real estate marketing and consulting firm Nancy Packes Inc. But for projects slated to hit the market in 2013 and 2014, it’s a different story. Indeed, 70 percent of the city’s new rental developments launching this year and next is actually slated for Brooklyn and Queens — with a strong emphasis on Brooklyn.
The Real Deal counts about 100 larger (20+) buildings in "prime Brooklyn neighborhoods," with an estimated 14,000+ units.

Most are in Downtown Brooklyn and Williamsburg, as the chart shows.

Graphic from The Real Deal
Market-rate rents for a Brooklyn one-bedroom in a non-doorman building have gone from $1,924 in 2006 to $2,511 last year, according to one report. Thus REITs and institutional investors have been buying finished, leased rental buildings, "viewing them as a safe haven for capital."

Rental buildings are much faster to lease up than condos are to sell.

There's an interesting quote from developer Ken Copeland of FLAnk: “Also, the city seems to be a little bit more pro-growth [in Brooklyn], allowing for [zoning] variances.”

From Crain's New York Business

A 3/14/13 Crain's New York Business article, headlined A wave of development looms in Downtown Bklyn, states:
In the next two to three years alone, 14 new residential properties with a combined 4,746 units will be completed, according to a study by the Downtown Brooklyn Partnership [DBP]. About half of these projects are already rising, while the other half are currently in the development process. When they are completed, the area's population will rise from a little more than 13,000 to well over 25,000.
...The [DBP] has also noted an increase in the portion of new units that will be affordable—rising to nearly 22% in the latest wave, from about 9% in the previous one. This will push the area's ratio of affordable housing to market-rate to about 15%. Once the current crop of projects are completed, the area will boast more than 1,400 affordable units, according to the partnership's study. 
"When the rezoning was done, people complained it did not do enough for affordable housing, but this shows that's not the case," [the DBP's] Mr. [Tucker Reed said. "The rezoning worked."
As a Brownstoner reader commented:
Here is the beauty of revisionist history: if you repeat it often enough, it becomes true. The 2004 rezoning was never (fundametally) about creating new housing, affordable or otherwise. It was about making Downtown Brooklyn more competitive as a central business district. In the absence of any new office space, people talk over and over about the residential development until everyone forgets that fact. "The rezoning worked." Ha!
City role, arena impact

The article cites two 80/20 projects, with 20% low-income housing: BAM South, a 32-story tower  built by Two Trees Management, with 300 apartments and 50,000 square feet of city-owned cultural space, and 66 Rockwell, which will have 327 apartments built by The Dermot Company.

The money quote praises the arena:
"Before there were lingering questions about the area's attractiveness after work and on weekends, but the successful opening of Barclay's Center, the growing array of first-rate cultural institutions and more interesting retail options have driven up demand," said David Lombino, Two Tree's director of special projects. "More people want to live in Downtown Brooklyn because it's a diverse and vibrant New York neighborhood and the market is responding to that."
Well, maybe not. I think more people want to live in Downtown Brooklyn because it's very convenient:  to transit, to Manhattan, and to the restaurants and neighborhood feel of adjacent lower-rise districts. It's not yet "a diverse and vibrant neighborhood"--that's why the Downtown Brooklyn Partnership's own walking tour (above right) goes pretty far afield into adjacent neighborhoods.

No comments:

Post a Comment