Deciphering the Times's "Ultraluxury Condo" story: more rentals than condos in Downtown Brooklyn, and rezoning had bigger effect than the Barclays Center
I had to twice read The Decade Dominated by the Ultraluxury Condo, a New York Times Sunday Real Estate section cover story (1/12/20) published online today, to understand what it was really saying about Brooklyn.
Could it be that, as shown in the screenshot at right, Downtown Brooklyn had only 1,574 condo units built between 2009 and 2019, fewer than not only Williamsburg but also Bedford-Stuyvesant?
Not unlikely, I guess, as long as we're talking about for-sale condos. Downtown Brooklyn, as detailed in multiple reports, had far more rental units, especially if the starting point is moved back to the 2004 rezoning.
For example, as cited in a February 2016 report from Brooklyn Borough President Eric Adams's office,
A changing market
The Times notes:
The Times cites the diminishment of overseas investors, who were all-cash buyers. Now, says Gary Barnett of Extell Development, “The $5 million to $10 million market is hammered — there’s way too much of it."
That's interesting, because, among the relatively few condos still available at the single Atlantic Yards/Pacific Park condo building, 550 Vanderbilt, are the three over $5 million.
Regarding Brooklyn
The article notes that seven of the ten neighborhoods with the biggest rent increases in the city over the decade were in Brooklyn, indicating a competition for available units as well as new luxury units.
From the Times:
Yes, the arena surely stimulated hotels, and helped further the branding of Brooklyn, but the development nearby was significantly stimulated by the Downtown Brooklyn rezoning, as well as the marketing, with requirements for affordability and arts spaces, of city-owned cites in the area near the Brooklyn Academy of Music.
The article does note that the branding of Brooklyn was stimulated by the rezoning of the waterfront, plus tax abatements. And it cites the loss of about 15,000 Hispanic residents in Greenpoint and Williamsburg between 2000 and 2015.
Could it be that, as shown in the screenshot at right, Downtown Brooklyn had only 1,574 condo units built between 2009 and 2019, fewer than not only Williamsburg but also Bedford-Stuyvesant?Not unlikely, I guess, as long as we're talking about for-sale condos. Downtown Brooklyn, as detailed in multiple reports, had far more rental units, especially if the starting point is moved back to the 2004 rezoning.
For example, as cited in a February 2016 report from Brooklyn Borough President Eric Adams's office,
In terms of raw numbers of housing units, it was estimated that 979 projected units of housing would be built over the course of a decade, but the reality is that over 11,000 housing units have been developed or are in the pipeline.According to a 2019 report from the Downtown Brooklyn Partnership, 14,749 residential units have been completed, including 2,742 condos and 12,0007 rentals, again over a longer period of times.
A changing market
The Times notes:
In Manhattan, where the surplus of new luxury condos could take more than six years to sell, there is already a shift toward smaller, relatively less expensive units. Sweeping rent reforms in 2019 could also shape what gets built, and for whom, in the years to come.I'd add that a significant change in the 421-a tax break, as well as new transaction taxes, have made it tougher to both build and sell condos. In fact, the loss of 421-a means no more condo buildings are planned at Atlantic Yards/Pacific Park.
The Times cites the diminishment of overseas investors, who were all-cash buyers. Now, says Gary Barnett of Extell Development, “The $5 million to $10 million market is hammered — there’s way too much of it."
That's interesting, because, among the relatively few condos still available at the single Atlantic Yards/Pacific Park condo building, 550 Vanderbilt, are the three over $5 million.
Regarding Brooklyn
The article notes that seven of the ten neighborhoods with the biggest rent increases in the city over the decade were in Brooklyn, indicating a competition for available units as well as new luxury units.
From the Times:
Closer to Downtown Brooklyn, Pacific Park, formerly known as Atlantic Yards and anchored by the Barclays Center stadium, attracted major residential development nearby. A number of new mixed-use residential towers begun in the 2010s will soon dwarf the 512-foot clock tower at One Hanson Place, which was the borough’s tallest building for decades. Nearby, when it is completed in late 2021, the 1,066-foot skyscraper at 9 DeKalb Avenue, next to Junior’s cheesecake, will be the borough’s first supertall skyscraper, and new recordholder.I'm not sure the connection is so linear.
Yes, the arena surely stimulated hotels, and helped further the branding of Brooklyn, but the development nearby was significantly stimulated by the Downtown Brooklyn rezoning, as well as the marketing, with requirements for affordability and arts spaces, of city-owned cites in the area near the Brooklyn Academy of Music.
The article does note that the branding of Brooklyn was stimulated by the rezoning of the waterfront, plus tax abatements. And it cites the loss of about 15,000 Hispanic residents in Greenpoint and Williamsburg between 2000 and 2015.
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