Sayonara, subway: How ridesharing apps are changing the real estate calculus for brokers and developers
Popularity of Uber, Lyft is opening up clients to more remote NYC neighborhoods
It’s been New York City real estate 101 for as long as anyone can remember: If you want to fill your residential units quickly and turn a hefty profit, you’d better build near a subway stop with speedy access to Manhattan.
But nothing lasts forever, and although subway access remains an important factor when deciding where to live and where to build, real estate professionals say they are seeing a growing willingness among New Yorkers to move to neighborhoods where subway access is second-rate, thanks in part to the proliferation of ridesharing apps like Uber, Via and Lyft.
“Access to transportation is incredibly important, and rideshare blew that out the window,” said NestSeekers International’s Ryan Serhant, “so it’s now nice to have access to transportation like the 6 train or the L train, but it’s not completely needed.”
Because New Yorkers can now carpool into Manhattan for just a few bucks, many of them are rethinking their priorities as homebuyers, according to Serhant. Places like Bushwick are becoming destinations for buyers, who would rather factor in a monthly Uber budget than be house poor in a transit-rich neighborhood, he said.
Greenpoint, where the only subway option is the G train, has also reaped the benefits.
“You no longer market Greenpoint to people who live in Williamsburg and people who live in Queens. You market Greenpoint now to everybody,” Serhant said. “We lose buyers in the city to deep Brooklyn all the time now.”
Topaz Mor, a broker with Rental Solutions Inc. who frequently works in Ridgewood, said interest in that neighborhood has increased as well, despite the fact that it is mainly only accessible via the M train.
“Before Uber, absolutely, subways were the most important thing for people,” he said. “But now, with all those apps, it’s a lot easier to get around, so I guess you would say it’s somewhat of an incline.”
Uber has been laser-focused on dominating areas of the city with weak public transit access. More than half of all of Uber’s rides in New York City now begin in the outer boroughs, according to the company. Growth has been particularly high in neighborhoods without good access to the subway, according to Uber.
In Queens, for instance, year-over-year Uber trips have increased by about 240 percent in St. Albans, 175 percent in South Jamaica, 150 percent in Laurelton and Rosedale, 125 percent in Springfield Gardens and 100 percent in Glendale and Bayside, the company said. In Brooklyn, weekly pickups in the Flatlands have gone up by about 230 percent year over year, while rides starting in East New York’s Starrett City and East Flatbush’s Remsen Village went up by about 250 and 300 percent, respectively. In Bath Beach, rides went up by about 200 percent.
It’s helping attracting more buyers and renters to less-heralded areas, according to Homes of NY Realty Kenny Kissoon.
“People are going now where the affordability is,” said Kissoon, who works in South Jamaica. “Most of the time people can’t afford next to the subway.”
David Schwartz, principal at Slate Property Group, agreed that ridesharing apps had lessened the importance of being right next to a subway stop, and said that the days of having to rely on unreliable car services in Brooklyn are long gone.
“I think that the ridesharing apps have obviously been a big change. Citi Bike has been a huge change. I think the ferry has been a big change,” he said. “I think the Brooklyn office boom has been a big change. I think working from home has been a big change.”
Slate has ventured into the Greenpoint market with a mixed-use project at 807 Manhattan Avenue, but Schwartz maintained that subway access in the neighborhood is not as bad as its reputation, noting that the oft-maligned G train can still get straphangers to Midtown fairly quickly. Riders simply transfer in Long Island City instead of in Lower Manhattan.
“I think the transportation in Greenpoint is not good,” he said, “but it’s probably not as bad as a lot of people think.”
Not everyone is a full-on convert to the ridesharing business.
Boaz Gilad, CEO of Brookland Capital, said that while his company has embarked over two dozen projects in Brooklyn, he still avoids neighborhoods like Greenpoint and Red Hook largely because they do not have good access to public transportation.
Though Gilad acknowledged that the prevalence of ridesharing apps has made his company’s potential tenants less concerned about the looming L train shutdown, he still described himself as a “big advocate of traditional public transportation” and said he thinks car rides will have to start costing about the same as subway rides before any major transformations happen.
“When you have to wait for the bus in -2-degree weather because of the wind chill, I don’t care how cool the neighborhood is,” he said, “and maybe with Via and those, it might change. I’m not counting on it, but it might.”
Serhant offered up a different perspective on leaving a neighborhood with poor subway access.
“You can’t go into Red Hook and stand outside for a cab. There are no cabs,” he said. “But you can hang out in your kitchen while eating breakfast, hit Uber, see that it’s showing up in seven minutes, finish your breakfast nicely, and go outside when your ride shows up. It’s pretty great.”