I got a press release Thursday morning from Greenbrook Partners about its conversion of a vacant, deteriorating former rectory in Prospect Heights into four apartments.
A nice project, judging from the release, but hardly news for The Real Deal. I mean, four units? Really?
But it got me thinking about Greenbrook’s business plan, which is essentially to turn neglected buildings into modern rentals without having to deal with the headaches of rezoning, rent stabilization, litigation or tenant holdouts.
In other words, like a lot of smaller firms in the city, Greenbrook, which operates 400 buildings, does what the government allows it to do, rather than fight to do projects that might be good for New Yorkers but are prone to red tape and the whims of politicians. (The company nonetheless had to overcome controversy at one Park Slope building.)
I asked housing policy expert Mark Willis of NYU’s Furman Center for Real Estate this week for his keys to fixing the New York market. “As-of-right development,” was the first thing he said.
For all the sclerosis and dysfunction in New York real estate, as-of-right is a bright spot: the ability to build, renovate or convert without any special approvals. If the zoning allows your project, you don’t need a political strategy, media consultant or land-use lawyer, just an expeditor to pull your permits.
That is not the case in some markets.
The rub, of course, is that lots of potentially beneficial projects in New York are not allowed or exceedingly difficult for a variety of reasons.
Zoning is often outdated and furiously defended by NIMBYs and industrial interests. Rent stabilization and now “good cause eviction” entitles millions of tenants to permanent lease renewals, allowing even a single person to stop an entire development or gum up a value-add play.
The state legislature and Andrew Cuomo in 2019 basically ended co-op conversions. And multifamily projects of 100 or more units now must pay the prevailing wage to construction workers.
That doesn’t leave enough easy projects to solve the housing shortage. Clearing away those cobwebs would unleash the power of as-of-right development, allowing the investment that the city needs to modernize, adapt and grow.
What we’re thinking about: If you could wave a magic wand and change one thing about New York real estate, what would it be? Send your thoughts to eengquist@therealdeal.com.
A thing we’ve learned: Yitzchok Katz has filed for three 99-unit Boerum Hill projects and a fourth one just below that threshold in the past week, as developers continue to avoid the 485x wage scale that kicks in at 100 units. His development sites are 264 and 282 Bergen Street and 265 and 290 Wyckoff Street.
Elsewhere…
New York City requires new buildings shorter than eight stories to be all-electric, a mandate that will be expanded to taller ones in two years. But John Mandyck, CEO of the nonprofit Urban Green Council, told New York Focus, “What I am hearing anecdotally is that any major new development is going all-electric regardless of the date.”
“We hear the same thing from our mechanical engineers,” AJ Pires, president of Alloy Development, told The Real Deal. “Pretty much every new multifamily high rise in the city they are engineering is going to be all-electric.”
The New York Focus article noted that a 2022 analysis by the climate-oriented New Buildings Institute found that building an all-electric single-family home in New York costs about $8,000 less than a mixed-fuel one.
Pires, whose firm is putting up a major project across from Atlantic Terminal and the Apple Store in Brooklyn, says it would have cost about the same had it not been all-electric.
Closing time
Residential: The priciest residential sale Thursday was $8.1 million for a co-op unit at 1 West 72nd Street — the Dakota — on the Upper West Side.
Commercial: The most expensive commercial closing of the day was $4.5 million for a 6,970-square-foot, mixed-use property at 435 Graham Avenue in East Williamsburg.
New to the Market: The highest price for a residential property hitting the market was $64.7 million for a 7,455-square-foot condominium unit at 53 West 53rd Street — better known as MoMa Tower — in Midtown West. Douglas Elliman has the sponsor-sale listing.
Breaking Ground: The largest new building application filed was for a 94,753-square-foot, 11-story, 99-unit residential project at 282 Bergen Street in Boerum Hill. Hamish Whitefield Architects filed the permit on behalf of Yitzchok Katz of Developing NY State.
— Matthew Elo