Columbia University’s expansion plan has some brokers predicting that the area just north of Morningside Heights, one of the last affordable frontiers in Manhattan, will see property values surge by as much as 20 percent.
The nearly $6 billion plan, which would double the size of the Ivy League school’s campus, won approval from the City’s Planning Commission late last month during a combative public meeting and now goes to the City Council for final approval.
The plan has been met with staunch opposition from some in the community, including property owners who will be pushed out by the new research facilities, dormitories and other buildings. But many say the proposed redevelopment of the 17-acre swath, bounded by 129th and 133rd streets between Broadway and 12th Avenue, will mean higher prices for all of the properties in its path.
“If Columbia buys and builds, the market value of the properties in the area have nowhere to go but up,” said Mark Zborovsky, owner of Mark Zborovsky & Co., who estimated prices will rise 10 to 15 percent shortly after construction begins.
“If I had any holdings in the area I would not be selling them now at all. I would hold and wait for the area to go up even more,” he added.
So far, Manhattanville has managed to retain its mom-and-pop operations, fast-food joints, garages, warehouses, car repair shops, bodegas and other locally owned storefronts. But academic facilities and college students are often followed by mega chains like Starbucks, Barnes & Noble, Dunkin’ Donuts and Duane Reade, which tend to accelerate gentrification and jack up property prices. And other areas slated for massive re-development recently in the city, like Coney Island, have also seen increases in property values before the shovels hit the ground.
Adjina Dekidjiev, the rental operations manager for Manhattan Apartments, predicted that “everything is going to increase at least 20 percent, both for buying and renting apartments,” which will be a boon for both individual apartment owners as well as building landlords.
She said rents in the area, which are still lower than they are for comparable apartments below 96th Street, will steadily increase over the next five years. That is despite the fact that, if approved, the first phase of Columbia’s expansion won’t be complete until 2015, and the entire project won’t be done until around 2030.
At the moment, a standard studio rents for $1,100 to $1,200 in Manhattanville compared to a minimum of $1,500 below 96th Street. And some Manhattanville two-bedrooms can be purchased for around $500,000, a price that many consider a steal for a one-bedroom farther south.
Dekidjiev said she thinks those who live in the neighborhood now will likely be forced to move farther north in Manhattan to Inwood and Washington Heights as they are financially squeezed out.
Ilan Atzil, managing partner for Itzhaki Properties, said the pending expansion has already prompted many property owners to rethink their real estate investment strategies.
“Many sellers don’t think about selling there because of that expansion,” Atzil said. “I have a deal not far from there — a residential development site. The seller keeps telling me that Columbia is getting close to him and maybe he should ask more money because the value of the land will go up.”
The price on that property, he said, is about $150 per buildable square foot. The owner thinks he should ask $200 per square foot.
Atzil predicts that home prices will consistently hit $750 per square foot instead of ranging from $600 to $750, and residential rents will increase to about $30 per square foot — up from today’s average price of $25.
That expectation is turning Manhattanville into a prime investment area. But while the brokers and investors who stand to benefit from the increased prices may welcome the expansion, many of those who own and live in Manhattanville are concerned.
Eric Anton, executive director with Eastern Consolidated, said many of those small building owners feel that they were excluded from the planning process.
Manhattanville residents — who are worried about being displaced, about the possible use of eminent domain, and about the rising cost of rent — have not been shy about voicing their anger.
Earlier this year, a draft environmental impact statement found that nearly 3,584 residents will be forced out of their homes between 2015 and 2030, and around 85 businesses will be displaced, leading to the loss of 880, mostly blue-collar, jobs.
Columbia is arguing that not only is the expansion vital for its growth as an academic institution, but also that the project will benefit the community by creating 9,000 permanent new jobs.
Under a deal reached with the borough president, Scott Stringer, the university has also agreed to the creation of a $20 million affordable housing fund and to pitch in additional money for local parks and playgrounds. And it plans to construct environmentally friendly buildings.
But those who will be displaced have not been easily pacified. If housing prices suddenly skyrocket there, those improvements will do the many renters in the area no good because they won’t be able to afford living there, they say.
Dekidjiev said that while it will be good for real estate, this is one of the few areas that has not yet been drastically altered by massive development.
“We’re torn because we’re in real estate, but at the same time it’s disappointing, and I think in the next 30 years [with development like this], we won’t recognize the city,” she said.