The Downtown Brooklyn Partnership is dismissing concerns that a glut of housing development in the borough threatens to send the market into oversupply and drive down prices.
Demand for housing in Downtown Brooklyn in particular “exceeds available supply,” according to Tucker Reed, president of the nonprofit development corporation that administers three business improvement districts in the neighborhood. In a statement, Reed noted that “nearly all of the 6,700 units built in Downtown Brooklyn since the 2004 rezoning have been absorbed.”
“If anything, we suffer from a lack [sic] of available product today,” Reed said, adding that there is “no evidence” that demand is waning in the Downtown Brooklyn.
The Wall Street Journal reported Monday that real estate investment trusts like AvalonBay and developers are increasingly concerned that an influx of new housing inventory in Brooklyn threatens to throw the borough’s market out of balance.
Median rental prices for luxury units at the top 10 percent of the Brooklyn housing market dropped 3.4 percent year-on-year in July, according to Jonathan Miller of appraisal firm Miller Samuel, while Equity Residential COO David Santee noted in the REIT’s second quarter earnings call that the company’s Brooklyn holdings are “really dragging the portfolio down.”
Downtown Brooklyn appears more threatened by a supply glut than most neighborhoods, with the Journal pointing to 6,412 new apartments at 23 buildings scheduled to hit the market in the next five years, according to the Journal. Williamsburg, by contrast, expects 4,341 new units by 2019.
But Reed noted that Brooklyn, “like the rest of New York City, is facing a housing crisis,” – citing a Columbia University report estimating that the city’s population will grow by 1 million residents by 2030. “This would translate to 5,500 new residents a month, every month, for the next 15 years.”