But driving deregulation as well is the fact that private equity funds see great possibilities in your neighborhood. Your landlord is now much less likely to be a family or an individual who has owned one or two buildings for years, depending on them for a safe and steady income, and much more likely to be a faceless, massively financed international firm that is highly incentivized to force you out on the street and keep its investors happy.
It’s important to make that distinction. A landlord with one or two buildings may or may not get greedy but understands the value of a good tenant vs. a bad tenant or an absent or transient one. A large corporate landlord, especially one going for a semi-monopoly position, is all about greed.
Yep. I was in one of those big corp owned apartments (Case and Associates). It wasn’t fun since they didn’t really care for the properties and they always nickel and dimed everything. It was frustrating. I’m glad I’m not in any of their properties anymore. Bleh
I’m currently living in a 2 bed apartment in Brighton, UK. Sharing the rent with a friend, which is £1100 (then you have bills on top of that).
I used to rent a 1 bed studio apartment in a small town which was the mid-point between Brighton and London… that set me back £550 in rent on my own.
It’s not just London in the UK, but most of the south and our major regional cities which are getting fucked by a toxic combination of property as assets/money laundering, reducing protections on rent and renters, utter lack of house construction for decades (general housing, affordable housing, and social housing).
I would happily trade moving to NYC and putting up with the pressures on housing faced there over the nation wide property bubble which needs to pop here in the UK, and that’s before you even begin to think about the ways in which brexit is going to trash the wider economy.
My prediction: 10 to 20 years from now, the UK would have splintered apart into its constituent members. If the USA doesn’t get to grips with their own version of our problems, I can see the number of member states dropping below 50, too.
This is a vast oversimplification. Cities like NY & SF have a zoning problem far bigger than the fatcat problem. If inventory is restricted, and you can’t build densely on expensive property, naturally the homes will be expensive. Most of my city is zoned for 2 family max, and 35’ high. This dictates what we call a “Bayonne Box”, a cheap, ugly, but huge 2 family filling the lot. Many houses on double lots (50x100) are being scraped to put up 2 of these, 4 condos. If zoning allowed, you could easily put up 8 to 16 homes on this same plot, with the same land, foundation and roof costs. Anyone can see that would create more affordable homes. But residents want to complain about high prices and rents at the same time as they defend the status quo to keep their low density and street parking. This is hypocrisy.
This row of Bayonne boxes could easily have been dozens of homes had zoning allowed:
Zoning that allows higher density may and likely will result in lower housing prices in NJ, but that’s not guaranteed in Manhattan or SF or Vancouver or Toronto. In those places if the zoning changed, the developers of new multi-family housing will likely build luxury condominiums instead of rental units (and especially instead of affordable rental units). The NIMBYs you describe can be a problem, esp. in San Francisco, but take them out of the picture and what remains in desirable global cities are greedy developers looking to sell to fat cats.
Reading the article about NYC, the addition of new housing stock has driven prices up for everyone, including renters (esp. those whose landlords are PE firms).
In the article it basically says you need to have the entire area market dezoned. Then the market can expand and stabilize at a higher supply and lower price. In NYC area market the lux is actually a very small portion of the millions of homes. The fact is even as is, the heavy development here in Hudson County has softened rents, even more shockingly a friend who’s a major broker said landlords are paying their fees, not the tenant as has been the case forever. Blaming “greedy landlords” begs the question, they can’t be greedy if the market supply says no to rent hikes.
The public housing problem in many of our cities is that the politically powerful unions drive up the price of public works in general to absurd levels. See the NYTimes story about how the subway tunneling costs 4-10x as much as anywhere else in the world.
It’s the mildest climate in Canada so we get a lot of people that have fallen on hard times migrating here from other provinces. There are homeless begging on Robson Street as McLarens, Lambos and Ferraris roll by.
I didn’t see many homeless people the last time I was there, except when I passed by the “Hamsterdam” area they’ve set up. Still, considering the number of see-through glass condo towers it’s certainly disconcerting.
Yes. As I noted, there’s only so much that can be done in highly desirable cities like Berlin and Frankfurt. But quality public housing is definitely a good start, something the U.S. has been unwilling to try for the last 30 years.
He’s discussing the 5 boroughs, not the greater NYC market that includes NJ as well as Westchester and L.I. He says specifically that the upzoning done by both De Blasio and, in a different way, Bloomberg “did absolutely nothing to contain rents.” After discussing a provision of the property tax code that gives developers tax breaks on new buildings that provide a certain proportion of affordable rental units and the way they’ve been gamed he continues:
The greater problem, as Michael Greenberg spelled out in his New York Review of Books analysis, is that by its very definition new housing that is 25 to 30 percent “affordable” still means huge numbers of high-cost new rentals. It is, in other words, mass gentrification locked in for many years to come, while the city is further starved of tax dollars needed to maintain and improve its public services.
What he’s really calling for in regard to residential real estate is ending subsidies for developers and putting that money instead toward affordable public housing in the city for working-class people (maintenance to be supported by another dedicated half-cent in city sales tax). He supports high-density zoning, but the kind that will result in more affordable rents.
Certainly housing stock outside the geographic scope of what he’s discussing is important, but that becomes an issue of funding better and more public transit than one of funding better and more public housing.
It’s really more about greedy developers, but greedy landlords, especially the private equity funds, certainly find their ways inside NYC. For example, when the city makes laws saying no to rent hikes (or at least limiting them) the large corporate landlords get very creative in forcing tenants under rent control and stabilisation out. As noted above and in the article, when the market supply of housing stock in Manhattan and Brooklyn and, to a smaller extent, Queens is increased with new construction the result is higher rents all around.
That’s a real issue but one that has to be addressed separately, probably in the voting booth. Not all politicians have to be beholden to the unions.
Remove government backed credit - this abuse goes away. Taxpayers have been tricked into believing they benefit from these programs…but the rich benefit far more.
We tried that once. There was a rather famous war over it that is in some ways still being fought. The precedent and Constitution firmly establishes that once you join you cannot leave.
The current Essex Street Market building is slated for destruction, but the Essex Street Market itself will live on in a far superior facility across the street. All the existing tenants, including Shopsin’s (glorious Shopsin’s), are being guaranteed spaces in the new facility at the same rents they pay now.
NYC is obviously not the only city dealing w/ this same thing, so, I’d like to know, where are all these rich people coming from? Seriously. And, also, how many more of them will we have to suffer?
Foreign investment for money laundering and land banking is NOT unique to NYC. I first learned of it in the early 2000s reading about rich neighborhoods of London that had been hollowed out by Saudi and Russian kleptocrats buying buildings that they lived in for a month or so a year and killing all the business in the neighborhood as they depopulated it.
Then I read about Chinese billionaires and millionaires buying up land in Wellesley and Newton and other Boston suburbs, doing the same thing. There is one Chinese billionaire who has bought a significant portion of Harvard Square and Cambridge, MA and is just banking the real estate, for what purpose nobody seems to know.
One of the things that may, just may come out of the Mueller investigation is the criminal history of Trmp’s real estate deals which go back to the 1970s and have been consistently associated with cash transactions for money laundering purposes. I suspect that much of the high end real estate business is about money laundering. Driving up housing costs and destroying neighborhoods is simply an additional “benefit” for the kleptocratic kakistocracy.
China, Russia and any other country that’s rapidly industrialized or had a major change of type of government. The wealthy have financially strip mined their homeland and secreted their ill-got gains in real estate holdings in the ‘desirable’ large cities around the globe.
Vancouver’s rapid growth started in the late 80s and through the 90s with the wealthy Hong Kong Chinese starting to move their money to safe havens as the prospect of Communist China taking it all away when Great Britain had to cede the territory at the end of the lease. The collapse of the Soviet Union and subsequent rampant and corrupt Capitalist feeding frenzy inside the Russian Federation had the oligarchs spreading their money across the Western world in much the same way because they didn’t expect the good times to last.
The Chinese love Vancouver - nice climate, not enough financial oversight for foreign investors and easy money laundering through BC’s casinos.
I don’t mind the people as individuals but hate the class consciousness and grossly ostentatious displays of wealth they bring with them. There are more cars and SUVs worth over $150K in Metro Vancouver than anywhere else in North America. The number of 18 to 22 year olds driving Ferraris, Lamborghinis, McLarens, Bentleys etc. is unbelievable. Hong Kong born community college or university students as the listed owners of $4M houses aren’t even noteworthy anymore. Sigh.
There are some things in the article here that strike me as a bit off.
The multigenerational Dominican family that had to move out when the mom died? The rent control laws are written such that rent controlled apartments can be passed down to cohabiting family members. I dunno if someone in the family dropped the ball on doing this, or if there was landlord malfeasance, or what, but that’s not typically how this would go.
Willets Point being the valley of ashes from Gatsby? Nope, that was the current site of Flushing Corona Meadows Park, which is across Northern Boulevard from Willets. (To the south/southwest.) Here’s an aerial view of the whole area from the 1920s, per Wikipedia:
Complaints about the eminent domain & upzoning process that’s led to the (ongoing) buildout of Columbia’s Manhattanville campus? Okay, I get objections about the process; I’m uncomfortable with aspects of this too. But the area was a worn-out postindustrial district that was frozen in time circa 1981. The main things that were displaced – and that were filing lawsuits against the eminent domain – were a sketchy gas station and a multistory self-storage building, fer crying out loud. (I live about 20 blocks from the area, btw.)
There are important issues the article raises, but in the big picture positive things are happening that leaven the loss of valuable old things, and the author’s editorial perspective minimizes this in favor of bleakness overall. This is the same issue I have with Jeremiah Moss’s Vanishing New York blog. Whom Baker, of course, cites approvingly.
