The entire world is in a state of economic downturn. China plans on pumping $586 billion through an economic stimulus package. Iceland is in a state of “hell has frozen over and we really need to get the heck out!” type of situation.

And as the economy lowers our demand for gas prices here in NYC – prices are dropping at the pumps – latest was $2.55 per gallon.

But what surprises me is that real estate prices in the city are not budging—at least not until now. The latest data shows that neighborhoods like the East Village, Midtown West, Hell’s Kitchen and Harlem are seeing significant overall drops in pricing. According to the linked article, real estate agents in NYC now encourage their clients to price 10 to 15 percent lower than a year ago.

This is not the whole story. Due to the situation presented with the highest unemployment rates of all time, people like Danh Le are getting rid of their apartments and trying to find cheaper ways to survive. He is in search of a place to live for $100/month. An excerpt from his craigslist post:

I want to get rid of my expensive rent and be semi homeless. Obviously there are a lot of risks so I’m wondering if there’s anybody out there willing to lower my risks with a certain place to stay. I know the economy is bad so maybe you would like some extra money. I want to believe that there are people who are willing to help a person in need. I have up to $100 to spend on housing a month. Could I sleep outside in your backyard?

And as we all know, 30 is the new 20. More and more kids are staying at home with their parents, especially in the NYC area than ever before. The situation is difficult but if we’re as determined and positive as some of our friends over in Iceland, we too can overcome this awful economy.

No, it’s not Fringe week just yet. Don’t get all Shakespeare-eyed on me and reminisce about those days you became an unpaid stage hand just so you could watch the gritty and real life of off-off-Broadway productions. Don’t think of that time you did gigs with your band for free drinks. Don’t even try to recall the PA gig you did on the Sopranos in hopes that some day you will make Second Second Assistant Director.

No. Forget those dreamy gigs you’ve taken in the past. Live in the now. Let’s snap back into reality as Eminem would say. It’s time to take a deep look at your wallet, your pocket, your bank account and measure it against your lifestyle.

Are you living with more than 2 people you’ve never met before you started living here? Are you working multiple jobs and having barely enough time to sleep? Do you survive on Cup of Noodles and Mac n’ Cheese? Does the thought of free food still excite you?

It seems that a lot of people did take into account all of the above and the big moves have finally started. A few of my personal friends have done so, but this New York Magazine article proves it: people are fleeing NYC for more affordable places where their dollar goes farther. Places like Buffalo, NY – imho one of the biggest architectural nightmares ever. But you know what? It beats sleeping on an air mattress.

Are you moving?

My friend Sean sent me this copy of a letter he sent to an apartment broker’s company management about how his wife was yelled at and harassed by the broker when she tried to find an apartment. It’s a lovely, heart-warming tale of bullying, harassment, and attempted bribery right here in good ol’ Brooklyn. Enjoy! (All phone numbers and e-mail addresses have been redacted to protect the innocent and not-so-innocent, as the case may be. Warning: the language is not for the squeamish.)

To Whom It May Concern:

As you can clearly see from the text message I have forwarded below, one of your “representatives”, Seth (xxx.xxx.xxxx), has gone above and beyond his duties in representing your company.

Backstory:

My wife called Seth in regards to an ad posted on Craigslist for a 1 Bedroom Apartment for rent in Greenpoint. Upon making contact with Seth, my wife was asked the following:

“When do you need to move by?”

When my wife explained to him that we were flexible, as our current lease was month-to-month, Seth responded with the following (which is pretty similar to what he said to me in his text message):

“People like you will never rent the apartment, and if you want to see the apartment, you need to give me $1000.00.”

My wife asked if that was his broker’s fee, he said no, that the broker’s fee is one month’s rent, but the $1000.00 was to just “see the apartment”. My wife, shocked and upset, then tried to explain to him why we were moving (repeated break-ins in our building), but Seth decided he should scream at her, saying “show me the money, you fucking cunt”, and then he hung up on her.
(more…)

It seems like the MTA has finally woken up to the potential value of the land it is selling at the Hudson Yards site, the last substantial piece of undeveloped land in Midtown Manhattan. It’s now interested in holding some kind of equity stake in the property and a cut of future profits from its development. This is highly logical, since a large chunk of the land’s value will come from the transit improvements the agency will be building such as the westward extension of the 7 line. The developers point out the potentially weakening property market and the billions they will have to be putting out as reasons for opposing such an idea.

Chanel Thirteen recently showed the American Experience documentary on the construction of Grand Central, a huge project largely funded through land development by the New York Central Railroad. A core problem at work here is that a government agency neither has the skills or more importantly the financial incentive (it’s not their money) to run the numbers properly and think about these projects in a business like way. Hong Kong’s awesome transit infrastructure is funded by a private company that also acts as a land developer.

Though I bought an apartment a little over a year ago, I still check out the Manhattan rental market report every couple of months or so, just to see what’s going on. According to the January update, average rents in Manhattan are down overall due to economic factors, though some neighborhoods are bucking that trend, notably TriBeCa (I blame you, Bobby DeNiro). Notable neighborhoods to find “bargains”: midtown (both east and west), Greenwich Village, the east village, and the LES all had rent drops, but are still averaging ridonkulously high rents. Harlem remains the cheapest in the city. Looking to spend more? Head to the aforementioned TriBeCa, Gramercy Park, Chelsea, and Battery Park City.

I’m interested to see what happens in the upcoming months – economic downturns that start with giant screw-ups in the financial industry usually affect NYC earlier, longer, and harder than most other parts of the country (see economic downturn, 1989-1992, where the city lost 1/10 of its jobs and the median home price in Manhattan dropped by a quarter). Not that rental prices are necessarily the only bellwether of the city’s economic downturn, but the nationwide real estate mess is going to affect everyone, especially when the axes start falling more in the financial industry.

Kind of scary.

The Times indicates there may be hope for the tenants of 475 Kent Ave. The article looks at the buildings history with more depth and context than most other stories. What comes out is a history similar to that of many other informal/non-legal artist buildings in NYC, a history which shows the tremendous value that these tenants added to the property.

“Painstakingly, foot by foot and floor by floor, the three began breathing life into 475 Kent. Colonies of rats were chased out and puddles of pigeon droppings mopped up. Windows were unsealed to reveal startling views of the Manhattan skyline, and of the Manhattan and Williamsburg Bridges. Pipes were stretched; walls were built.
Word spread, and more artists followed. Ms. Masters moved from Dumbo in 1998, building studios on the seventh floor using money that she said she received from a different settlement with Mr. Guttman. The boxy, soaring building soon became a place where ascendant and established sculptors, writers, filmmakers, musicians, printmakers and photographers worked, collaborated and thrived, and became enmeshed in one another’s lives.”

The residents of this building were not responsible for the city’s failure to provide safety in this area over the years. They also were not responsible for the lack of transit and infrastructure investment that made such a potentially valuable area undervalued and they certainly were not the creators of the antiquated zoning laws that barred mixed use residential development in the area. In fact they were one of the major groups to see the areas true value and unlock that value by deciding to live there. Now that the city has woken up to the value they helped create, its pure injustice to kick them out.

The just solution, for most of these buildings is at minimum some kind of buyout situation, which recognizes long term residents as de-facto co owners of the properties they helped make so valuable.

The NY Times had a great story on the weird effect its tight real estate market can have on relationships in the city. Love seems to come and go, but that rent controlled apartment on east 76th is priceless.

Here is part two of my rant that I am re-posting.

Things got really quiet. I mean really and I could tell that there were a lot of other birds that were listening now.

Me: Yes. I came there because I want to help make scene that revolved around the artists.

So, I think that by now, I’m not to confident in the citys future ability to hold the position as the the world’s cultural capital or even a decent place for creative people to exist in. Like almost everyone, I know– I am keeping my options open.

The federal reserves latest BIG ASS BURSTING BUBBLE seems to be in housing and one of it’s epicenters is starting to look interesting. There certainly seems to be nice oversuply of fancy new construction in Miami, which just happens to be the location of the world’s largest art fair orgy. Could we end up with prices getting down to artist levels? Chances are that they will at least attract more dealers.

This is kind of an open thread– anyone think this makes sense?

This video about a squater eviction in London indicates it’s the same over there if not worse. The particular symbiotic relationship between these squaters shows they were in fact doing some good for the neighborhood by maintaining the building, keeping out vandals and helping keep the area safe, things it’s unlikely the city was prepared to do. Of course, a number of them may have also worked in and patronised local businesses.

Who is Hernado de Soto???