Never enough space for the richest New Yorkers

The economy of France may not be booming, but it just cashed in on one of it’s best investments.

Spring flowers blooming at Park Avenue in ManhattanIn 1979, the government of France paid $600,000 ($1.9m in 2014 dollars) for an 18 room duplex at 740 Park Avenue on the 12th and 13th floors, a Rosario Candela designed pre-war, 18 room “mansion in the sky”. This year the French government decided that the present value of the apartment which they assumed to be around $50m was a little too large an investment to house their U.N Ambassador. They put it on the market in April 2014 for an asking price of $48m.

It went to a bidding war with multiple buyers and sold for $71.3m (a 3,500% profit!) to a resident in a continuous apartment on the 14th floor. The purchaser, Israel “Izzy” Englander founder of the Millennium hedge fund ostensibly purchased it as a pied-a-terre for his children and grandchildren when they were visiting.

Rumor has it that there’s a large line up of potential adoptees, should the Englanders decide that they would like to increase their offspring.

The 1% strike again, this time from the air!

White HelicopterThe concept of “noise pollution” is a fairly recent one. On Eastern Long Island, known as “the Hamptons”, New York’s premier beach resort where the Atlantic Ocean meets beautiful, pristine white sand beaches, noise pollution used to mean the odd early morning tractor from the nearby farms, or perhaps the occasional late night party.

Recently, noise pollution has taken on another, much more disturbing meaning. Residents who frequently battle the traffic and drive several hours to reach their summer homes are now accosted by the noisy commuter leased helicopters transporting the ultra-rich to and from Manhattan. The helicopter traffic has increased by 40% over last year which has caused increased tension between what the NY Times refers to as “the very affluent and the exceptionally rich”. Broadly interpreted this means between the 1% and the .01% who are constantly in competition with each other for status.

A Shelter Island resident quoted in the Times may have most aptly described the situation: “Quality of life truly is being diminished for the commercial greed and the convenience of the same people who burned the economy.”

NYC Riverfront Development

High Line Park, New York

High Line Park

During the past twenty years, there has been extensive riverfront park development in NYC. The most notable is the very diversified Hudson River Park which winds its way from the George Washington Bridge along the Hudson down to the Battery. It encompasses all types of recreation activities which can be read on the Hudson River Park website. The elevated High Line Park is another such project.

Most recently however, the riverfront of the Bronx, often referred to as the “forgotten borough”, has been discovered by the architects Alexander Levi and his wife Amanda Schachter of SLO architecture. They saw recreational possibilities along the Bronx River, formerly a very unattractive site along a very polluted river. Having captured the imagination of 100 architecture students, they have plans to create a park around the abandoned Westchester Avenue Train Station in the Bronx. This was originally commissioned by J.P. Morgan and designed by one of NYC’s most prominent architects of the time (Cass Gilbert) in 1908. It has been out of use since 1931.

These activities won SLO Architecture the Dwell Vision Award from Dwell Magazine. The project is being supported financially by two Fitch Foundation grants and promises to add another innovative, recreational park to NYC.

Affordable Housing Continues to Motivate Migrations

For the past 10-15 years, the formerly less desirable neighborhoods of urban centers have regularly become populated by city residents willing to urban homestead as these areas have become gentrified.

Growing families who resisted the move to the suburbs were attracted by the larger space that their money could buy. They were also attracted by the interesting industrial architecture that was being converted into spacious, well designed, family-sized homes. The expression, “build and they will come”, became “convert industrial architecture and they will flock to these areas”.

This was especially true in areas around Minneapolis, Cleveland, and the neighborhoods in Manhattan, Brooklyn and Queens that abut the rivers, i.e. Tribeca, the Lower East Side, Dumbo, Williamsburg, and more recently Long Island City in Queens.

Affordable housing moves migrationsSince the recession of 2008 however, there has been a new type of migration and people have become willing to relocate much further away from the urban centers on either coast to the inland cities. The Redfin data analysis in “Why Cities Grow: The Data Behind the Story“, by Nela Richardson shows that home prices are significantly lower for higher quality homes in these upscale neighborhoods where good job possibilities also exist.

These cities include Oklahoma City (now the 12th fastest growing city in the U.S. in spite of the frequency of tornados), Columbus, Ohio, San Antonio and El Paso, Texas, and Provo, Utah amongst others. Job growth in these cities seem to also be a motivating factor; companies who need well educated, middle class employees are following this migration by establishing offices in these regions.

Are you noticing an increase of people moving into your city?

End-users Excluded from Accessing Housing Values

Recent statistics indicate that in 2014, 42% of Americans live in middle class neighborhoods down from 65% in 1970! This is another sign that the middle class people and their young adult children, who normally would gravitate to these neighborhoods simply can’t afford to own homes in these neighborhoods which they normally would have sought out because of the good schools and services available there. It is also indicative that there has been a long-standing bias about building rental units in these middle class neighborhoods by home owners who felt that this would downgrade their neighborhoods and bring in rental residents who are “not like us”.

3D Concept Of Real EstateOf course, this has changed since the Great Recession of 2008 when many homes in these areas went into foreclosure and were purchased in bulk for cash by REITS and Hedge Funds directly from the banks at numbers far below their current market value. Their business model was to minimally repair these foreclosed homes and turn them into rental units until the real estate market had recovered and then sell them at a greatly appreciated value.

There are pros and cons to their business model. The advantage for the community is that the flood of foreclosed homes in some neighborhoods were taken off the market which preserved the image of the neighborhood and reduced the number of FOR SALE signs. The disadvantage is that individual purchasers seeking homes were prevented from accessing these properties which they previously couldn’t afford, at good value. The current situation is that these bulk purchases of homes are now being packaged and traded from one investment group to another, with the individual buyer excluded for the most part, and substantial profits being reaped for these funds.

Read more about this on the New York Times Dealbook by Matthew Goldstein.

Manhattan in Springtime

Housing Demographics 2014

Patricia CliffYounger people, the group that advertisers like to focus on, like to live close to where they work. They also value access to efficient public transportation. This is in part because they have little patience for traffic jams but also because many are interested in reducing the carbon footprint. Since people are working longer hours and harder, they also welcome the opportunity to live close to their places of business. They also prefer to live within walking distance of the shops and restaurants that they choose to frequent. Given that Mad Mothers Against Drunk Driving has made their inroads felt throughout the country, people also prefer to enjoy themselves on an evening out and be able to walk home or take public transportation without fear of incurring DWI infractions.

Tyson Corners, a regional shopping hub in Northern Virginia located 13 miles from downtown Washington D.C. will be welcoming an 11.7 mile extension of the regional Metro rail system called the Silver Line. The goal of developers is to transform what they have now named Tyson into an urban stand alone city. There are presently four new office towers under construction, 850 new apartment units which are scheduled for completion by the end of 2015, and considerably more in the planning stage. In addition, a consortium of developers and planners called Tysons Partnership aim to continue developing new housing and renovating older apartments in the area. What about some affordable housing in the mix? Nothing has been said about this to date but given the need for affordable housing in the beltway area, it certainly should be part of the mix.

The lesson to be learned here is the need for efficient public transportation combined with more easily accessible living arrangements that are close to the urban services that people use and frequent. The secondary advantage is to save many large scale malls around the country which are less frequented by consumers today and only accessible by car. These malls usually have large parking areas that could be developed for housing and office buildings by placing the parking underground.

Read the New York Times article about Tysons here.

Are there any malls in your city that would benefit from be transformed in this way?

Buying a Home in NYC: Digital vs Personal

HouseAnother big time international techie coder, Ori Allon, who has triple citizenship: Israel, Australia and the U.S. sold his prior business, Julpan to Twitter. Ori has now decided that he can turn the NYC residential real estate search solely into a total technology driven experience. He has created the website: urbancompass.com.

On Urbancompass.com, properties all over NYC can be searched regardless of which real estate company actually has the exclusive listing. Furthermore, the exclusive agents of these properties are not identified anywhere in search results.

When a property of interest has been found, detailed information is not available until the visitor signs in via email or Facebook (which of course allows Urbancompass access to your personal information.) At that point, an Urbancompass agent that they consider appropriate, based upon your personal profile is assigned to you.

Value your privacy? Care to spend a huge amount of money to purchase a home and miss out on the personal experience of dealing with an experienced agent of your choice who will unravel all of the issues that come along with the purchasing process? When was the last time that a hand jumped out of your computer, patted your hand and told you that everything was going to turn out okay? Not to worry? Not likely to happen.

Buying and selling real estate is a personal experience not an exercise in Google style technology!

Portland Home Remodelers | Neil Kelly

The owner of Portland, Oregon based Neil Kelly Co., a design and remodeling firm with a portfolio of environmentally responsible projects, Tom Kelly and his wife Barbara Woodford decided to built a mountain retreat for their family which would inspire others to build sustainable homes. Tom felt that “manufacturers won’t create sustainable products without demand, so it’s important for us to keep moving them forward”.

The 2,000 square foot home, which was completed in 2006, is as cutting edge today as it was eight years ago. They chose Alaska based architect, Liz Olberding to design the home, which has a great deal of their personal input and preferences. The result was the first West Coast Leeds Certified single family home.

There is a Great Need for Affordable Housing Right in our Nation’s Capital

Calendar mark  with Pay rentIn Washington, D.C., the nation’s capital there is a severe lack of affordable housing in all parts of the city. It’s the working poor who are especially affected. How can a single mother make meaningful efforts to elevate herself and her children from poverty when her housing choices are living either living in shelters or being victimized by aggressive landlords who fail to make necessary repairs and deliver sub-standard housing?

Read more at NPR’s Lack Of Affordable Housing Puts The Squeeze On Poor Families by Pam Fessler.