Sixteen years ago Orestes Gonzalez decided he needed more space. He packed his Manhattan bags and headed to Long Island City. A renter for three years, Gonzalez quickly realized the Hunters Point Historic District was an oasis from the hustle and bustle of Manhattan, yet only 10 minutes away by train.
He started buying.
The first building he purchased in 1992 in the tiny historic district, which runs along 45th Avenue between 21st and 23rd streets, cost him $100,000. Within a couple of years, he owned four buildings on the street.
Gonzalez is among the many longtime owners in a small protected area that is on the verge of being surrounded by massive new development in Long Island City. Prices have jumped up to nearly $1 million for a single-family home, but many owners on the tightly-knit block maintain they’re not selling, though there has been a surge in owners restoring their properties.
Julia Schimmel, who owns a house on 45th Avenue, said she was shocked to read in the New York Times recently that houses on her street could potentially sell for $2 million. But she maintains that she isn’t interested in selling for any price, citing her connection to the neighborhood. Monty Mitchell, a resident and architect who has restored homes on the block, also said the $2 million figure was too high.
“It’s too fast a change,” Mitchell said. “Last year a house sold for around $950,000. I renovated the stoop; it was in good condition.”
Mitchell said it’s hard to estimate the value of property because there’s a limited market. He noted there is variation on the block – some houses are 18 feet wide and some are 20 feet wide. The buildings at the end of the street are still rent-controlled.
“It used to be redlined so people couldn’t get mortgages,” he said. “If a building burnt down it couldn’t be rebuilt. Now it’s been rezoned, and, under Bloomberg, they’re encouraging residential growth. But with the low housing stock it’s difficult to find comparable properties, and so it’s hard to price.”
Mitchell attributed the surge of restoration to the history of the district, and said a lot of his recent work on the block has been adding extensions to homes.
“Initially, they started as single-family homes,” he said, “then they were converted to two families – reducing the density. It’s similar to what’s happened in Brooklyn Heights,” where single family homes changed to two-family homes and then back to single-family, he said.
Gonzalez, too, has completely renovated the inside of three of his buildings and is currently restoring their original Queen Anne facades.
“I’m restoring the facades because they were in bad shape and needed to be preserved,” said Gonzalez, who is putting tongue and groove cedar siding on his property. “For me, it’s not a matter of selling. I live off the rentals. It’s better for me to live off the profits from renting than to pay capital gains. The way I look at it, I have a tax-free salary that keeps increasing in value.”
Gonzalez wouldn’t disclose how much he has spent fixing up his properties, but said the investment, including a full restoration of the interiors, is beyond the $100,000 mark. Each of his units has waiting lists of people wanting to rent. Unfortunately, for those waiting, Gonzalez said most of his renters don’t want to move. It’s not unusual for Gonzalez’s tenants, who pay between $2,000 and $3,200 per month, to stay as long as seven years, he said.
Nan Schiff, a Prudential Douglas Elliman broker, has owned property in the neighborhood for more than 30 years.
“It used to be a little factory town with little factory people,” Schiff said. “No one had a checking account and people would walk home for lunch. About 20 years ago that started to change and artists moved in. They wanted decent housing and liked the convenient commute. Now it’s a lot more people from Manhattan, yuppie types.”
A sign of the changing times in Long Island City is palpable in the half-dozen modern buildings being constructed in the Riverview section of the neighborhood. But Schiff said she knew the market was taking off a couple years ago when brokers started bringing her tenants. People who lived in her buildings didn’t want to pay brokers’ fees.
More than 5,000 units are on the drawing board to eventually rise in Long Island City, a result of the Queens West project on the waterfront being slowly built out and a rezoning of the neighborhood farther inland in 2001 that allowed for more development. A co-op and rental tower have already been completed on the waterfront, and the neighborhood’s first condo buildings – the Gantry and the Arris – have hit the market in the last few months.
Schiff harkens back to the fear she felt paying $135,000 in the 1970s for a 17-unit building on 44th Drive. Shortly after that acquisition she bought a brownstone on 45th Avenue for $120,000.
“At the time it was a really high price. I was nervous,” Schiff said. “But I thought, ‘there’s something very good about this place.’ I didn’t know when people would realize it, but I knew eventually they would.”
When will amenities chase housing into Hunters Point?
Longtime homeowners in the small Hunters Point Historic District in Long Island City said they expect the burst of residential development in the area to lead to a retail renaissance as well, bringing amenities they’ve craved for a long time.
Julia Schimmel, who owns a house on 45th Avenue, said she would be thrilled if the new buildings attracted a Starbucks and a full-service grocery store. Orestes Gonzalez, who owns several buildings in the neighborhood, said that with an increased population comes an increase in services; he can’t wait.
He acknowledged the high-rise buildings will obstruct views of Manhattan for some of the older houses, but he was quick to retort: “That’s what happens, but an increase in quality of life outweighs the views.”
Valerie Dominguez, a broker with the Corcoran Group who represents sellers in Long Island City, said she heard a new building under construction on the waterfront by Rockrose Development has negotiated a deal with Whole Foods Market to come to the neighborhood. In the last year, Dominguez said new shops and restaurants are popping up all around Vernon Boulevard.
Looking out the window of an apartment Dominguez represents inside the high-rise City Lights co-op building on the water, she said she receives approximately 15 phone calls a week about apartment property in Long Island City, but never calls about living in a house. The real estate landscape of Long Island City is undoubtedly changing, but maybe not in the small community of houses on the historic block of 45th Avenue.