In one Brooklyn neighborhood, a real estate speculator did some exclusionary zoning.
He crafted a plan to ensure only wealthy people would live there, which attracted developers and speculators to buy his plots. The character of the area changed completely, leaving it entirely unrecognizable from the humble community it had been.
Welcome to Brooklyn Heights, created in large part by Hezekiah Pierrepont’s actions 200 years ago, according to a New York Times article. The neighborhood’s success can be measured by its property values: A townhouse at 1 Sidney Place just went into contract for around $22 million.
Knowing the history of real estate helps put into context the controversies of today. The Times article pointed to a legal fight pitting Alexico Group — the developer of the so-called Jenga Tower at 56 Leonard Street in Tribeca — against Rockrose Development and St. Francis College.
Both developers want to build a residential tower on a Remsen Street site being sold by the school. Some commenters on the Times story feared that Alexico would build something like 56 Leonard.
“Anything that would spare us another monstrosity such as the Jenga building is fine by me,” one reader wrote under the moniker Brooklyn Lady. “I could weep for the Brooklyn of my childhood.”
“Looks like a palm tree with the top lopped off after a typhoon,” another chimed in.
But readers were far from unanimous on 56 Leonard, where penthouses have sold for $50 million.
“I like that building. That kind of architecture is what makes places like Tokyo and Singapore seem very modern while the U.S. is stuck in the past,” wrote John from Tecumseh.
“I find buildings like the Jenga structure to be quite interesting and daring. I do not want to live in a city that is so stuck in the past that it finds no role for itself in the future,” George S. wrote in response to Brooklyn Lady.
Then he added a wry remark.
“While historic preservation has its place, just because a building is old doesn’t mean it should be kept forever. Perhaps it is not the Brooklyn of your childhood that you weep for — but simply the loss of your childhood itself?”
Public reaction to real estate development has many layers and is more emotional than logical. Consider that the revered brownstones of Brooklyn Heights and other neighborhoods were criticized when they went up. Eventually the houses became treasured by preservationists and locked in place by landmarking.
Rarely does anyone engage in introspection about development. The not-in-my-backyard folks don’t consider that their homes were once unwanted in someone else’s backyard.
However, a Times reader named Trina Y may be an exception.
“Brooklyn Lady, the Jenga building has found its way into my heart,” she wrote. “But like you, I am NIMBY. It doesn’t belong on Remsen Street.”
What we’re thinking about: Will New York’s new “good cause eviction” law give tenants leverage to hold out for larger buyouts from developers looking to renovate or demolish buildings? Email me at eengquist@therealdeal.com.
A thing we’ve learned: The homeownership rate in the New York metropolitan area is 52 percent, second lowest among the nation’s 50 largest metro areas. Only the Los Angeles area is lower, at 48 percent, according to an analysis by LendingTree. The rates are highest in the Detroit, Minneapolis and Pittsburgh areas, at just over 70 percent.
Elsewhere…
— Layla Law-Gisiko, president of the City Club, a civic group that was founded in 1892 and revived in 2013, wrote in her newsletter this week that 485x, the replacement for expired tax break 421a, is “more or less the same as the old tax incentive, only more generous.”
If Daniel Patrict Moynihan were alive, he might say she is entitled to her own opinion but not to her own facts. The new tax break for multifamily projects can be five years longer but requires more money-losing affordable units and higher pay for construction workers. Jim Whelan, president of the Real Estate Board of New York, predicts it will produce far less housing than 421a.
— In federal fiscal year 2022, New York state benefited from $383 billion in federal spending and paid $362 billion in federal taxes, according to a report by state Comptroller Tom DiNapoli. That’s a net of $1,076 per New Yorker.
It was the third year of a positive balance of payments after many years of New York sending more to Washington than it gets back. But the streak is expected to end as Covid-era policies expire. Even in 2022, New York’s share of federal benefits (6.5 percent) was less than its share of taxes paid (7.8 percent).
— Most buildings in New York City have old heating systems that are inefficient and unreliable, but they weren’t always that way. Rather, they have been messed up or poorly maintained. Owners of these buildings would be wise to check out the Heating Help forum, where they can pose questions and get expert advice — something today’s plumbers often cannot provide about ancient equipment.
Judging from some of the posts, there are two types of service contractors: those who know what they are doing and those who think they do, but don’t. A recurring theme is that more knowledge of steam and hot-water systems is lost with each generation.
Data
Residential: The priciest residential sale Thursday was $25.37 million for 3 East 10th Street in Greenwich Village. The four-story-dwelling, which had been a multifamily building, sold in what appears to be an off-market transaction.
Commercial: The largest commercial sale of the day was at 222 Broadway for $147.5 million. The FiDi building is approximately 778,000 square feet. A Newmark team led by Adam Spies and Josh King brokered the deal. An asset management arm of Deutsche Bank was the seller.
New to the Market: The highest price for a residential property hitting the market was $11 million for 130 East 61st Street. The multifamily townhouse is 8,450 square feet across nine units. Sotheby’s International Realty’s Jaime Richichi has the listing.