Can a new era of affordable housing be created from the wreckage of failed luxury real estate?

[marmar]

from the American Prospect:



Gentrification Hangover
How New York could create affordable housing from its empty glass condo buildings and failed takeover projects.

Alyssa Katz | January 6, 2010


Commuters arriving in Brooklyn via the Manhattan Bridge are greeted with a shiny vision of New York City's future that never came to be: condo buildings with names like the Oro, the Toren, and Forté, towering monuments to real-estate developers' credit-bubble hubris. Two-bedroom apartments in the Oro were priced at nearly $1 million apiece; today, just 90 of 303 units have been sold. The Forté would have gone into foreclosure had its developer not voluntarily relinquished the building to the bank, losing investor Goldman Sachs its $13 million stake. Property records declare 37 of its 108 units purchased, and the high-rise itself feels even lonelier -- as night falls, just a few windows in its upper reaches are illuminated.

On the opposite sidewalk of Flatbush Avenue one drizzly fall evening, more than a hundred demonstrators, members of the Right to the City Coalition, drew attention to another possibility: A city starved for affordable housing could find it in the glassy confines of failed luxury dreams. They had converged from hardscrabble neighborhoods on the frontiers of gentrification, where jackhammers had provided the soundtrack for Mayor Michael Bloomberg's second term.

At the height of the national mortgage boom, New York City was deluged with cash -- fees for packaging, rating, and selling securities. Wall Street bonuses alone totaled nearly $24 billion in 2006, and finance employed almost 200,000 people at its peak. That money had a ripple effect out from Lower Manhattan, bringing formerly fringe working-class neighborhoods -- Bushwick, Crown Heights, East Harlem -- into the limelight as desirable new frontiers. Developers raced to catch the wave, armed with funds not just from the local banks that usually back speculative construction but from some of the biggest names on Wall Street. New York City made the Scarface mistake: It got high on its own supply.

Developers' speculative fever far outstripped any real demand for the real estate they were building or acquiring. The Right to the City Coalition surveyed downtown Brooklyn, Bushwick, Harlem, the Lower East Side, the West Village/Chelsea, and the South Bronx and counted more than 600 incomplete or largely empty condominium buildings, some with units priced at more than many longtime residents of these communities could hope to earn in a lifetime. In Bushwick, Brooklyn, where over one-quarter of households fall below the poverty line, apartments in one 15-unit building have been on sale for more than a year at over $500,000 each. Only one has found a buyer. In Chinatown, where the median household income is $36,538, all 13 apartments in one condo were on offer for an average $1.3 million. In Harlem, a new building with pads priced at $1.47 million sat vacant. ..........(more)

The complete piece is at: http://www.prospect.org/cs/articles?article=gentrification_hangover

[jwirr]

1. Many old school buildings were converted into this use. This is assuming

that the final product would be affordable.

[Sen. Walter Sobchak]

2. how 'is that "Luxury City" working for you now Bloomberg?

Fuck that was a stupid idea,

[Fearless]

3. So long as people want to make a buck instead of a happy home... nope.