It’s been spreading down Ludlow, Orchard, Clinton, Essex and Eldridge streets. Trendy bars, restaurants and condos have grown up among the souvenir shops and stands selling exotic produce. Immigrant families that have lived for two generations in cramped apartments are now housed next to young professionals in newly renovated million dollar lofts.
Gentrification is coming to Chinatown.
A gateway to America for many immigrants, Chinatown is the most densely packed part of the city. Unrelated immigrant families commonly double or triple up in rent controlled tenement buildings, sharing a single apartment where rooms have been subdivided by plywood partitions.
But that arrangement and the character of Chinatown itself – may be starting to change. Brokers in the neighborhood say owners are looking for any means under the law to vacate their properties so they can fix up their assets and capitalize on them. Community activists are calling for more affordable housing as market rate apartments are added in increasing numbers, and say they are worried the neighborhood will lose its identity.
Douglas Wagner, president of Benjamin James real estate agency, said developers are continuing to come to the area to look for below market rate units to renovate, after having exhausted other downtown neighborhoods.
“There was only so much in Manhattan that wasn’t conquered by market value,” said Wagner. “SoHo moving into NoLita, and NoLita moving into Chinatown has had a domino effect of developers buying buildings, fixing them up and renting to younger, newly affluent individuals.”
Increased demand for market-rate housing has sent prices soaring. New buildings in Chinatown command rents at least four times that of regulated units.
Wagner said market rents in Chinatown are $1,300 to $1,800 for a studio, $1,900 to $2,200 a month for a one bedroom, and $3,000 and up for a two bedroom.
Many of the market-rate buildings are brought about by developers who purchase tenements, wait for the tenants to vacate, move the building out of rent stabilization, and then refurbish the place. A one bedroom can sell for between $450,000 and $800,000, with some Essex Street condo lofts ranging from $800,000 to over a million.
Things have slowed down somewhat since Sept. 11, because of a poor economy, Wagner said.
“I know of a school on Madison Street where classrooms were turned into lofts. That hasn’t launched partially because of the economy, but there are plans to continue at some point. Others have gone ahead,” he said.
Wagner said that slow down makes it the right time to buy in areas like Chinatown.
“This is a really good time for people to consider buying in off- peak areas like Chinatown because sooner or later, or I should say sooner, it will be the area. It’s just a matter of time.”
The renovated market rate apartments are often right next door to rent-controlled apartments, or even in the same building.
Multiple immigrant families often share one rent controlled apartment because the competition for housing is so intense. Conditions in many dwellings have been notoriously poor in the neighborhood for many years, and many landlords have not kept up repairs, according to Robert Weber, the director of policy at Asian Americans for Equality, which helps residents with affordable housing.
Rents are usually $200-$300 a month per person, for a 150 square foot room. A vacated one bedroom apartment made into a three bedroom might market for around $3,800.
In those buildings, both landlords and tenants themselves are dividing up space for multiple families, said Edmond Wong, a sales agent at William B. May. He said tenants don’t see the arrangement as substandard. “They see it as a way to save money. As soon as one family has saved enough money to purchase a home, there are five other families waiting to get in there.”
Within the same building, the physical differences between market rate units and rent controlled units are often negligible, though prices are far apart, said Wong. “There may be two apartments next to each other in the same building that may not be that different in quality, but one is rented at market rate and one is rent controlled, a difference of thousands of dollars.”
The trend towards gentrification is causing concern among community leaders.
Many worry about the lack of affordable housing in the area, and others fear having only high-priced apartments will cause the neighborhood to unravel, leaving Chinatown to become just another tourist attraction, void of its economic and cultural identity.
Alex Chu, president of Eastbank, believes Chinatown needs to create affordable housing, but that it needs to be balanced with the growth of the community.
“There has to be a mixture of housing so you can bring in people with different needs, the high-end and low-end, so they can add to each other to make a strong community. You can’t rely on government to build housing, because the land prices are so high. You can’t even build affordable housing in the traditional sense of the word anymore.”
Chu says one solution might be to build up. “Select buildings on the block that don’t compromise neighboring buildings, and build up to, let’s say, 10 stories from the existing three stories. Add on top of these very sturdy loft buildings, add an elevator, and make it a requirement that 20 to 30 percent be affordable.
“If the landlord wants to do it then they sign on, if they don’t want to they keep their three stories and wait. So it’s still a free society if the incentives are there.”
Weber said the area’s economic downturn following Sept. 11 has made problems ever worse, although he is starting to see some improvement over the last four months. Economists have estimated that roughly 85,000 jobs were lost citywide in direct connection to the attacks, with Chinatown alone losing some 8,000.
“The insularity of the neighborhood, especially after the events of Sept. 11, has heightened the community’s vulnerability,” said Weber. “The jewelry sector, which was the second largest in the city and had done quite well for decades, really took a serious blow and is not recovering right now.”
Weber also noted the current “hemorrhaging” of the apparel industry in the area. And the community experienced fear, anxiety and rumors following the recent outbreak of the SARS epidemic in Asia.