One of the fun things about living in New York City is peering into the faces of the people you pass and asking yourself, “Are you a millionaire? Are you, sir, with the mustache and tattoos and mustache tattoos? Are you, angry biking lady?” It’s sort of like the grown-up version of Are You My Mother? but whereas the little bird in that famous children’s book has only one mother, NYC overflows with rich people. They’re everywhere, hiding among us. They have to be. After all, who else could afford to buy those massive luxury condos growing up everywhere like weeds?
Well, turns out that the secret ingredient is salt foreign capital.
According to data compiled by the firm PropertyShark, since 2008, roughly 30 percent of condo sales in large-scale Manhattan developments have been to purchasers who either listed an overseas address or bought through an entity like a limited-liability corporation, a tactic rarely employed by local homebuyers but favored by foreign investors. Similarly, the firm Corcoran Sunshine, which markets luxury buildings, estimates that 35 percent of its sales since 2013 have been to international buyers, half from Asia, with the remainder roughly evenly split among Latin America, Europe, and the rest of the world. “The global elite,” says developer Michael Stern, “is basically looking for a safe-deposit box.” … But much of the foreign money is coming in at lower price points, closer to the median for a Manhattan condo ($1.3 million and rising). In fact, if you’ve recently been outdone by an outrageous all-cash bid for an apartment, there’s a decent chance that, behind a generic corporate name, there’s a foreign buyer and an offshore bank account.
Don’t sweat it, normal Americans! We still have options. We can be HUMAN PROPS.
In our super-stratified society, we are used to a certain level of unfairness. If you pay more, you can board a flight first and sit in the increasingly luxurious first class section of the plane while everyone else squeezes into steerage. If you don’t have dollops of dollars, as Josh Michtom notes, there’s probably no hope for you as a consumer, period. But what if you, a middle-class tenant who pays her rent, find yourself living among the super-wealthy because they have invaded your building and then added amenities to which you are not allowed access? Or you’re allowed to live in a fancy-shmantzy new condo, but only if you enter through “the poor door” (!) and stay out of the gym?
In recent years, developers who have earned tax credits by promising to provide affordable housing have built luxury condos with separate entrances and lobbies for the affordable rental units. The so-called “poor door” makes it easier to restrict who gets access to amenities. Last summer, 40 Riverside Boulevard, a luxury condo rising on the Upper West Side, drew criticism for a design in which low-income tenants enter through a separate door and do not share amenities with owners. …
At the Windermere, tenants living in the nearly 140 rent-regulated apartments have been barred from using the new spa with a pool, yoga studio and gym. As part of a $10 million renovation, Stellar Management is also adding a sky lounge, a bar and planters to the roof. Rent-regulated tenants, who pay about $1,000 a month for a one-bedroom, had socialized on the roof for years, but will no longer be allowed to use it when construction is complete.
This brings out my inner banner-waving go-ahead-and-pepper-spray-me revolutionary.
As we’ve established and you already knew deep in your bones, the same house will be more expensive in Greenwich, CT, than in Fargo, ND. What you may not have known, though, is that the difference in price is not merely reflective of the difference of costs, specifically land and material costs in CT vs ND. There’s an X factor too, or, as the experts call it, a “shadow price,” that makes San Francisco so absurdly unaffordable it might as well be Mars.
The price of a house or apartment, the authors argued, is more than just the value of the land plus the value of the building. There’s a third, shadow price, which represents how difficult it is to get something built given local regulations. In highly restrictive places like San Francisco, regulations impede the supply of new buildings, and so raise the price of housing.
So, like, for example, materials and land cost 2x the national average in SF, and yet a house costs 3.6x the national average. The difference can be attributed to regulations. You know, bureaucracy, red tape, all that nonsense. The Economist flatly states, “the [Bay Area] is one of the most difficult places to build in the country. Prices are therefore soaring and neighbourhoods are changing, touching off some occasionally nasty social conflicts.”
DC apartments, though nutsy, remain more reasonable than SF’s, in part because, after our nation’s capital went through crisis after crisis between 1969 and 2001, it decided to get back on its feet by investing in tons of new housing — for DINKs. If you build it, DC figured, they will come, “they” being single, sexy, spendy types, which represent more short-term gain for an urban area. And lo, the city was right.
Though the rest of us patriotic, good-hearted Americans took off July 4th, the Gray Lady carried on. Personally I like to think of her as a society matron out of Edith Wharton: stately, imperious, immovable. Anyway, she presented us on Independence Day, in her weekly Great Homes & Destinations update, with “What You Get For $1.2 Million.” The round up included this Seattle mansion, of which she says, “The house has both a backyard and a private courtyard surrounded by lush landscaping. Large palm trees shading the courtyard were about six inches tall when planted by the house’s original owner.” Who was, no doubt, Thurston Howell III.
So then, as promised, here are my picks for the Billfold’s companion feature, GOOD ENOUGH Homes & Destinations: What You Can Get for $125,000.
A 2 BR, 2 BA condo in Las Vegas, NV, via Redfin. $112,450. 1000+ square feet, comes with ceiling fans, A/C, and access to the community pool because, duh, Vegas. Have you read The Goldfinch or We Are Called to Rise? You’ll spend 40% of the year up your chin in water in order to stay sane.
The $2 million figure is a guess because this news item cri de coeur in the Times of Israel about the sale of parts of the Valley of Elah to developers does not actually specify a price, and that price regardless would be in shekels. The bottom line is that Israel, a country roughly the size of New Jersey, has a serious housing crisis. That means that “historic” / Biblical places like the hills overlooking the area where David supposedly slew Goliath are seen as potential Great Homes and Destinations.
As you can imagine, not everyone is pleased:
Separate but equal, right? What could possibly go wrong? According to the Daily Mail, NYC has given a thumbs up to the Poor Door:
Extell’s proposal allows them to force affordable housing tenants to walk through an entrance located in a back alley behind the building to enter, leaving the more prominent front entrance for tenants paying for nicer apartments. … some developers dismiss the outcry over the ‘poor door’ concept.
‘No one ever said that the goal was full integration of these populations,’ David Von Spreckelsen, senior vice president at Toll Brothers, another developer specializing in luxury residencies, told The Real Deal in 2013. ‘So now you have politicians talking about that, saying how horrible those back doors are. I think it’s unfair to expect very high-income homeowners who paid a fortune to live in their building to have to be in the same boat as low-income renters, who are very fortunate to live in a new building in a great neighborhood.’
The great David Von Spreckelsen has spoken. Gross trash-people living in affordable housing should be grateful they get a door at all and don’t have to shimmy in through air vents or come in on their knees, flagellating themselves for not working harder in elementary school to prepare themselves for the marketplace. Count your blessings, human rats! If you can count, which we doubt.
Related: Have you watched Snowpiercer yet? Anne Helen Petersen says: “Snowpiercer is the first film I’ve seen since District 9 that takes the tropes of the blockbuster and transforms them into something so compelling that days after seeing it, you stop can’t thinking about it. It turns moviegoers into proselytizers: Once you’ve seen it, you can’t shut the fuck up.”
Will future generations will look upon us City dwellers with pity or scorn? Actually, scratch “future generations.” How about “denizens of Pittsburgh, Denver, Lincoln, or pretty much any other damn place besides San Francisco”? Because the folly of living in New York City, it keeps getting more intense. According to Curbed, which gleaned data from Zumper, median rents for a one-bedroom in the City this past month leaped from “Astronomical” to “More Than Your Great-Grandpa Made in a Year.” They ranged from $1,200 in Brownsville, Brooklyn, which is a place Lena Dunham never lived, to a whopping $4,210 in TriBeCa, in Manhattan, which is a place she did.
Apparently we can blame the Greenpoint price spike on her (a median one-bedroom now sets you back an exorbitant $2,275), since after she set her TV show “Girls” there, the neighborhood exploded. Of course, even the ‘point can’t compare to what I lovingly call “Barely Brooklyn,” the parts of the borough that may as well be Manhattan: