NYC developers dish on Ridgewood, the risk of renting to roommates and more
By Virginia K. Smith |November 14, 2014 - 8:59AM
Over the past two days, commercial brokerage Massey Knakal Realty Services hosted its Multi-Family Summit, which brought together investors, owners, brokers, elected officials and developers alike to discuss the ever-fluctuating state of NYC's apartment buildings (a.k.a multi-family properties). BrickUnderground attended with ears wide open to pick up a little real estate wisdom. Below, what we learned about the things your landlord—or your landlord's boss—is saying to their compatriots. (Caveat: Many industry pros quoted below have some skin in the game they're commenting on, so read with an appropriately opened mind.)
Yes, Ridgewood really is about to get huge (along with much of the rest of Queens). At a panel on the future of Queens, we learned that yes, you can expect lots of new buildings to start cropping up in non-Long Island City areas of Queens. "Neighborhoods like Ridgewood, Elmhurst, Corona, Woodside, Jackson Heights, and Bayside, where you'd have thought no one would want to build, all of a sudden there's substantial [upward] pressure on rents, and land prices are still reasonable," said Daniel Benedict, founder of real estate investment firm Benedict Realty. Translation: people want to rent there and it's cheap to build, so expect development to push farther into Queens, just as it has in Brooklyn.
All that talk about a bubble bursting? Probably won't do much to lower your rent. While Stonehenge Partners CEO Ofer Yardeni's recent comments calling the city's luxury market a "bubble about to burst" are still making waves, don't expect a potential slowdown to translate into a break on your monthly bill. "I think the bubble is for the high-end condo market, but won’t have a strong effect on the middle-range market on the rental side," explained Jeremy Shell, head of acquisitions and finance at developer TF Cornerstone . "I don’t think there would be a major re-set in rents as a result of condo buyers pulling back." Sorry to be the bearers of bad news.
Expect more tall buildings. New York City’s population is only set to keep growing, and to accommodate it, the city is on board with relaxing zoning regulations that restrict the height of apartment buildings, letting developers build ever taller towers. “We know we are a city that’s growing, and we need to fit more people into it,” said Carl Weisbrod, head of the Department of City Planning. New York can’t grow outward, he added, which leaves one direction. Upwards.
There's a reason it's so hard to find three- or four-bedroom rentals (and it might be your crazy roommates). Much as it seems like rising rents are the reason so many of us are forced to move every year, developers are actually trying to get you to stay longer (hence why so many pricey developments cover the broker's fee and offer a free month's rent, to boot). And this is the reason why new developments tend to skew towards one- and two-bedroom apartments. "Three- and four-bedroom apartments tend to be rented as shares rather than to families," explains L&M Development president David Dishy. "It's more risk [for high turnover] when you factor in the dysfunction that tends to happen with roommates."
Affordable housing is about to get more bells and whistles. If the de Blasio administration plans to meet its lofty goal of building or preserving 200,000 affordable units in 10 years, throwing up a rental here and there won't cut it. Instead, the priority is to create community-like developments that include schools, stores, park space, transportation and other services. (One example is Astoria Cove, a controversial 1,700-apartment development in Queens that includes a planned ferry dock, among other things.) The mayor’s housing plan “commits the city not just to building buildings, but to really building neighborhoods,” says Vicki Been, commissioner of the city Department of Housing Preservation and Development. Adds City Planning's Weisbrod: “If we are going to get neighborhoods to embrace density, we are going to do it only if we can assure neighborhoods are getting those kinds of investments--retail, open space, schools and the like--that are essential to a healthy neighborhood.”
Brick Underground articles occasionally include the expertise of, or information about, advertising partners when relevant to the story. We will never promote an advertiser's product without making the relationship clear to our readers.