For many New Yorkers, the recent news of Tishman Speyer and BlackRock turning over Stuyvesant Town to its creditors isn’t all that important. After all, it is not as if any one in Manhattan that doesn’t live in Stuytown will be affected by this, and neither will many of Stuytown’s residents either.
However, this does give many New Yorkers a reason to reflect on the state of real estate in this city, and how the “average New Yorker” is slowly being priced out of Manhattan. At a time when people are losing jobs, Wall Street is on unstable ground and discretionary income is the equivalent of a 4-letter word, real estate—even renting—still remains a point of emphasis in this city.
I was in Austin, my hometown, not too long ago, and while in the car with one of my friends, my mouth practically hit the floor. Just driving down one major road in Austin I saw several signs boasting, “One free month of rent,” “Two free months of rent,” and of course, “Three free months of rent.”
But that wasn’t even the half of it!
Some of these places actually listed there prices on their advertisements, and should such prices be attributed to just about any apartment in Manhattan, there’s not a New Yorker alive who would not be willing to pay 3 additional months of rent in order to attain such a mythical apartment listing.
Needless to say, there are a lot of people in Austin who spend more money on gas than they do on rent, and you can check out the prices on Craigslist if you don’t believe me. They also don’t have to deal with the hazards of brokers’ fees, high application fees and the absurd lack of vacancy that encumbers every apartment search in this city—at least the searches of those who don’t have rich guarantors or aren’t receiving a fat bonus check from Goldman Sachs.
Of course, New Yorkers understand why they pay the prices they do for apartments in this city, and it goes right back to the wise, old adage of real estate: “Location. Location. Location.” We pay more because we like being able to catch a Broadway Show, go to Madison Square Garden, eat at the world’s finest restaurants and attend the numerous events and parties that are exclusive to the Big Apple, all at a moments notice, and sometimes, within walking distance.
Why is entertainment, fun, dining and accessibility factored into our rent?
Because of greed!
And that brings me back to Stuytown. A property which was bought some odd years ago for $5.4 billion by Tishman and BlackRock. Their bid was $900 million more than the group the board of Stuytown had offered, representing the biggest real estate deal in the history of the United States. That bid was inspired by greed though, a greed that was prevalent in the city at the time, as real estate had become fashionable around the country, but had become financially motivated here in Manhattan. The new owners of Stuytown were willing to pay an absurd amount of money for the property, because they were going to increase rents like nobody’s business, and let those who fight them be damned. They were willing to eliminate the long beacon of apartment-pricing sanity below 96th Street, and they were going to get rich off of it.
Unfortunately for them, they couldn’t get through all of the rent-stabilization laws they thought they could surpass, and now, in a slightly ironic fashion, Tishman and BlackRock can’t make the payments on their property.
Still, that doesn’t mean that Stuytown is going to return to its original stature as an affordable place to live in Manhattan. Quite frankly, what Stuytown once promoted as affordable, never really was that to man of New York’s residence.
The fact remains that Manhattan is a city for the rich, wealthy and affluent. It no longer caters to the hard-working, hungry and modest. Unless of course, you’re working in Manhattan, then they spit you out back to the outerborough or 8-roomate domicile from which you came. The only “affordable” housing left in Manhattan is in Harlem, which is why the New York Times recently did a report on the numerous numbers of Caucasians moving above 125th Street.
However, sooner or later, Harlem won’t be affordable either. Columbia University is already in plans to displace residents with its new construction project, and rents are increasingly rising with new developments being constructed north of 96th Street. It’s only a matter of time before New York actually becomes a “City of Gold.” Then that tough, hard-working, brash, New York mantra attributed to the city since its inception will only be representative of those who live outside of Manhattan’s boundaries. And if we were even the least bit smart and vengeful, we would stop coming to the city to work and leave the millionaires to do their own pooper-scooping until the price of buying a studio apartment is somewhere south of the average senior citizen’s 401k.