When is Too Much Really Too Much?

Downtown Brooklyn by MAx Touey via Curbed NY

Rendering of Downtown Brooklyn from the Barclays Center, 2016.

 

If you rent, and you’re thinking about moving to or elsewhere within Brooklyn, there might be a few reasons to consider renewing your current lease for one or two more years. In fact, there might be 28,000 reasons.

Anyone who has lived in Brooklyn for the past ten years or so has seen massive changes throughout the borough, most notably in the skyline, the rents asked to live anywhere here, and the people who now live here, still an eclectic, diverse group, but with a few more dollars in their pockets than those who came before.

Twenty-Five years ago, as seen from the F train overpass of the Gowanus Canal, Brooklyn’s skyline consisted of a small cluster of mid-rise buildings in downtown on the left and the Williamsburg Bank Building on the right. Today, there are dozens of new buildings, many higher than all those older structures, and now and then a half-dozen cranes where more buildings are rising. In the past ten years, +/-27,000 brand new rental units have been developed in the borough. Along with all the new construction, many long-time small-scale landlords, those leasing units in two- to five-family owner-occupied brownstones and sixteen- and twenty-unit apartment blocks, have been making gut-renovation improvements to their stock to compete with the new construction and command the high rents Brooklyn’s popularity now allows them to charge. So, whether you like brand spanking new high rises with a wide-angle view (until it’s blocked by the next building that goes up) or you prefer the smaller scale elegance of a Carroll Gardens brownstone, Brooklyn beckons.

Downtown Brklyn from Sm 9th, Stephan Speranza, NYT Edited Before and After copy

The Brooklyn skyline from above the Gowanus Canal, before the construction boom, including before MetroTech (left), and today (right).

 

But too much can be too much, and unlike in the recent past, when prospective tenants raced to apply for the apartment of their dreams or conducted bidding wars against their competitors for the same space, these days there ae so many apartments available that prospective tenants race from apartment to apartment to apartment, and if one gets rented out from under them, there are plenty more from which to choose. This is especially true for those looking at the thousands of available apartments in the newly constructed high- and mid-rise buildings downtown and spreading outward from there into Fort Greene, Park Slope and, of course, up along the waterfront in Williamsburg and now Greenpoint.

There’s now a glut of apartments, and as a result many leasing agents in the gleaming new buildings are offering huge concessions to new tenants. These enticements include no broker’s fees, a month or two (or three) of free rent, free use of gyms and pools, and anything else they can think of to attract prospective renters. Now, anyone who’s paying attention knows that the rents for these new downtown and waterfront apartments are significantly higher than the rents for those in neighborhood brownstones and apartment blocks, but those concessions for the new apartments provide balance, at least for the first year. After that, the concessions usually disappear.

Williamsburg Bank to DnTn Composite

Left: Downtown Brooklyn in the 1990s, with the Williamsburg Bank Building on the right.    Right: Downtown Brooklyn today and tomorrow, with a rendering of the 73-story black needle of Nine DeKalb Avenue in the right center, almost twice the size of the dwarfed Williamsburg Bank Building in the lower right.

 

Or do they? Until now, they have. But for those who wait a year or so, as we suggested at the start, there could be some concession carryovers. That’s because those 27,000 recently built, hard-to-fill units are nowhere near the end of the boom. There are more to come—many more. Twice as many, in fact. A recent article in the New York Times estimates that in the next ten years, 28,400 more apartments are expected to join those 27,000 built in the past ten, and the Real Deal estimates 16,000 new units coming on the market by the end of next year!! Where are the tenants for all those apartments coming from? Sure, everybody wants to live in Brooklyn, but these apartments aren’t for everybody. They’re for people with money. Rents for two-bedroom apartments are often well over $4,000 per month, and it’s rare to find even a small studio for less than $2,000. And once the concessions expire, there can be additional fees for using the gym and other amenities.

Many of the new buildings got zoning law leniency, permission to build high in exchange for offering a percentage of their apartments at lower-than-market rates, what’s referred to as affordable prices. Affordable is a relative term, though, and what’s considered affordable to developers and the city is often not so affordable to the working stiff. And by the way, just so there’s no confusion as to who’s who in these buildings, those in the affordable section get their own, somewhat less elegant entrance, in at least one case on a different side of the building.

So, who will fill the new buildings still on the drawing board? And what will it take to entice them into these buildings? For you tenants planning a move soon, re-upping at your current apartment for a year or two could get you a much better deal on a new place at the end of that time, when the bigger apartment glut should provide even better deals and perhaps cheaper rents than you’ll find today. For you leasing agents out there already struggling to fill your existing buildings, we suggest Happy Hour at 4:00. Sure, you probably work until 6:00, or even 7:00. Happy Hour at 4:00.

 


 

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