A developer demolished two walk-ups to build a 42-foot-wide mansion. Is that good?
Robert Kaliner is doing the project, which was chronicled Thursday in the Wall Street Journal. His firm, RoundSquare Builders, paid $18 million in 2021 and 2022 for the two three-story walk-ups at 105 and 107 Bank Street in Greenwich Village, then knocked them down. He hopes to get $75 million for the single-family house he’s putting up in their place.
Kaliner is probably optimistic after another double-wide home in the Village sold in January for $72.5 million, the most ever paid for a Downtown townhouse.
That property, at 138-140 West 11th Street, has a similar story. Enrique Alonso, an executive at developer SJP Properties, and his wife Katherine Pozycki-Alonso, daughter of SJP CEO Steven J. Pozycki, paid $19.2 million in 2014 for a decrepit, 11-unit building. Its two rent-stabilized tenants eventually left, and in 2016 the Alonsos accepted an unsolicited, $30.9 million offer for the newly free-market building.
The buyer converted it to a single-family and notched the record sale price in January, The Real Deal’s Sheridan Wall reported.
Such projects are glorified by the Journal, but some New Yorkers are sickened by them. It’s easy to see why. In the examples above, three buildings that once housed 20 or more families are now mansions for just two, and probably for just part of the year. That doesn’t seem like a good way to solve the housing shortage.
Combining apartments or replacing small-unit multifamily buildings with oversized townhouses or 8,000-square-foot duplexes has cost the city more than 100,000 homes over the decades. At one time, it was far more common for developers to convert single-family row houses into co-ops or multifamily rentals.
For instance, 105 Bank Street, one of the buildings Kaliner leveled, was built as a one-family in 1905 but later divided into six units. The walkup was good enough for John Lennon and Yoko Ono, who lived there in the 1970s.
Kaliner and other developers are not making policy decisions or moral calculations. The carve-up and consolidation trends roughly track with income inequality. The middle class thrived in the 1950s and 1960s, but since then the economy has increasingly taken on a barbell shape. For sites in neighborhoods coveted by today’s upper class, developers who create homes that sell for ungodly sums will outbid those who don’t.
But every cloud has a silver lining, and conversions are no exception. The city reaps tax revenue from these eight-figure transactions that it spends on affordable housing elsewhere.
Take 138-140 West 11th Street, which the Alonsos flipped. In transfer taxes alone, the 2014 sale generated $580,000, the 2016 sale $935,000 and the 2024 sale $4.33 million. That adds up to $5.85 million, not including sales and income taxes from the renovations, which cost a fortune.
Also, the owner paid $145,000 in property tax last year. Income taxes on the occupants could be millions more.
In a perfect world, people wouldn’t buy more square footage than they will ever use. But it’s not like the city is getting nothing out of the bargain.
What we’re thinking about: Do any celebrities still live in humble abodes, like John Lennon did at 105 Bank Street? Email eengquist@therealdeal.com.
A thing we’ve learned: Only 1,539 rental buildings got offers from the Tax Commission last year to reduce their assessments, half as many as the year before and the lowest number in a decade, according to property tax attorney Benjamin Williams. Across all property types, the Tax Commission approved shy of 14 percent of requests, the second lowest in the past 10 years. Manhattan rental buildings got the most rejections, the Rosenberg & Estis lawyer said. This year’s assessment challenges were due March 1.
Elsewhere in New York…
— A pro-housing coalition assembled by the New York Housing Conference will have its first meeting with an elected official next week, The City reported. The group will sit down with Brooklyn Council member Shahana Hanif, who will decide the fate of a rezoning to allow two large (by Windsor Terrace standards) apartment buildings at the Arrow Linen site. Hanif flunked her first controversial rezoning, cutting a 48-unit development in half.
— Another new pro-housing group, formed by Borough Presidents Antonio Reynoso and Mark Levine and City Council member Erik Bottcher, held its first meeting with elected officials last week. The founders held the gathering in private but addressed reporters afterward. The founders have signaled that their group might call out fellow elected officials who oppose housing development. That would be a watershed moment in the city, given the tradition of member deference and the taboo against criticizing colleagues.
— City Council members Thursday introduced bills to help keep tenants from losing their rent-stabilized apartments after a fire, structural problem or other issue that triggers a vacate order, Gothamist reported. State lawmakers in 2019 got rid of most of the financial incentives to empty out regulated apartments, but left in place a vacancy-dependent avenue for deregulation called substantial rehab.
Daily Dirt Data
Residential: The priciest residential sale on Thursday was $4.5 million for condominium unit 2C at 22 Mercer Street in Soho.
Commercial: The most expensive commercial closing of the day was $3.1 million for a 7,700-square-foot, 21-unit apartment building at 248 Arlington Avenue in East New York.
New to the Market: The priciest residential property to hit the market Thursday was an 8,700-square-foot townhome at 38 East 63rd Street on the Upper West Side asking $14 million. Sami Hassoumi of Brown Harris Stevens has the listing.