The story of comparatively wealthier residents moving into rundown, low-income areas and beginning gentrification is a well-known story.
However, now there’s a whole new class of developers who aren’t waiting for buzz to begin about a neighborhood, according to the Wall Street Journal. These developers are buying in early and erecting luxury condos long before speculation begins — and their units are selling.
The difference in approach apparently comes down to the average buyers’ generation.
“Values in Gen X and Y buyers are different from previous generations. They have a higher tolerance for crime and grit, so long as amenities, culture, services, transit and jobs are proximate,” says Trumark Urban’s Arden Hearing.
Hearing’s development company launched sales for their Los Angeles Ten50 building in 2016 and condos went from between $500.000 and $4 million.
“We have projects that are gritty and fantastic. We talk about them being ‘grit-tastic’.”
It’s a trend UCLA real estate lecturer Paul Habibi has noticed as well: “Developers are selling authenticity and the urban experience, which is more in favor than 15 years ago, when suburbia was viewed as the utopia,” he says.
In fact, New York’s own Hudson Yards project might be the best example of high-end development moving into a formerly undesirable area and transforming it.
Habibi says most buyers will be young people or foreign buyers — neither a group concerned about surrounding schools or other amenities essential to conventional family life.
[WSJ] — E.K. Hudson