Thursday, December 31, 2015

Atlantic Yards: Helping Solve the (Wealthy) Chinese Housing Crisis

Remember how Atlantic Yards, according to a promotional flyer produced by Forest City Ratner in 2006 (before the project was trimmed slightly) was to supply "over 6,800 units of badly needed mixed-income housing for Brooklyn"?

Remember how Atlantic Yards was, as the flyer said, "Helping Solve Brooklyn's Housing Crisis"?

Maybe it's the housing crisis faced by rich Chinese.

The Wall Street Journal reported 12/29/15, Chinese Developers Build in America, but Look for Buyers at Home, describing a tutorial in Shanghai regarding American Thanksgiving, aimed at Chinese buyers:
Instead, the attendees were being sold new condos in the U.S. being built by Chinese developer Greenland Holding Group, coupled with a culinary and cultural lesson on the autumnal holiday.
Greenland is in the process of building two large apartment projects, one in Los Angeles and the other New York, and is turning to its standard client base—Chinese investors—to help fill them up...But in many projects Chinese make up a third or more of the buyers, particularly when condo units are priced competitively to cities like Shanghai, fetching up to $1.5 million to $2 million apiece, brokers say.
(Emphasis added)

Greenland, of course, is based in Shanghai, which means it has a base of buyers who see New York as a relative bargain.

And in Brooklyn

While the article focuses more on Los Angeles, "where at least 10 Chinese developers have purchased large development sites," including Greenland and its Metropolis project, it also describes how:
Greenland has marketing suites for the building in a downtown Los Angeles high rise and in Shanghai, where an American flag is perched next to models of Metropolis and a $5 billion New York project named Pacific Park Brooklyn.
And a Columbia University (graduate?) student, Roy Guo, is cited as having paid $600,000 for a studio apartment in Pacific Park, obviously the 550 Vanderbilt tower. 

That building has 278 luxury condos, among 1,930 Pacific Park condos, with likely only 200 below market, with the letter well out of the range of most Brooklynites. If Chinese nationals buy one-third of the condos, that's 643 units.

Among the 4,500 rentals, 2,250 will be below market, but again, a good chunk of those will be unaffordable to most Brooklynites.

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