Surviving NYC's Housing Crunch
By David Abramowicz
amNewYork Staff Writer
August 7, 2006
Wondering whether you can afford to buy a Manhattan apartment? Here's how to find out:
Convert all the money you're willing to spend into crisp $100 bills, then put those bills in a bag. Lug that bag to the apartment in question (bend your knees!) and dump the money onto the floor.
Now spread the cash around the apartment, bathroom and all.
Finally, look around. Can you see the floor? If the answer is yes, collect your money and move on. You can't afford this apartment.
This is not hyperbole. An average Manhattan apartment costs $1,083 per square foot, according to the latest market report from real estate firm Prudential Douglas Elliman.
Ten $100 bills, when spread out flat, occupy about a square foot. In other words, a 1,000-square-foot Manhattan apartment costs about as much, on average, as a 1,000-square-foot carpet made of $100 bills.
But New Yorkers already know how expensive city apartments can be. Three hundred eighty years after Peter Minuit bought all of Manhattan for $24, many New Yorkers, no matter the borough, can only fantasize about renting an apartment for $24 a day.
Just to live, people squeeze into apartment shares or end up getting into major debt to buy or rent a place they really can't afford. Susi Shropp shares a one-bedroom, 400-square-foot, rent-stabilized East Village apartment with her brother. While she pays just below $1,000 a month, the deregulated units in her building rent for nearly $3,000. "I don't know these people can afford the higher rent," she said.
"Relatively speaking, the prices seem crazy," said Dottie Herman, Prudential Douglas Elliman's president and CEO. "Whether you live in the city, whether you live in Brooklyn, whether you live in Long Island, I think that housing is tough."
So tough, in fact, that the local real estate situation has come to be known as a "crisis." Low- and middle-income families are finding it harder than ever to afford housing in the city. And politicians, even as they echo each other's calls for more affordable housing, are finding it harder than ever to make that happen.
Newcomers can't find places to live. Residents find themselves priced out of their longtime homes. Housing-wanted ads on craigslist.org read like autobiographical essays, with cash-strapped apartment hunters using emotional appeals as currency:
** "I need a 2 bedroom apartment for me and my aunt & uncle. They have 2 little babies in a crib."
** "I have separated from my ex. and am looking to find my own place."
** "Help me get my family back to Chelsea!!!"
Advocates for more affordable housing fight their battle on two fronts -- preservation and construction -- and encounter bureaucratic obstacles on both.
Laws aimed at preserving affordable housing weaken over time as rent control and rent-stabilization regulations expire or the lucrative open market lures building owners away from government-subsidized projects. Meanwhile, zoning laws make it difficult to construct new affordable housing, leading some tenants to cope by breaking those laws, such as by illegally converting single-home units into multi-family dwellings.
"The protections that were put in place to try to solve the crisis – to protect working people – those protections are falling apart right now," said Tom Waters, a housing policy analyst at the Community Service Society of New York, which advocates for poor New Yorkers.
Mayor Bloomberg has focused much of his tenure on finding ways to create more affordable housing, and advocates generally commend his efforts. He even has expanded his original five-year New Housing Marketplace Plan into a 10-year plan that he says will create or preserve 165,000 units of affordable housing by 2013.
"Affordable housing," the billionaire mayor has said, "is fundamental to our long-term economic prosperity."
But how do you define "affordable" in New York City?
Bloomberg's plan creates units for people from both low- and middle-class income brackets, and some say he is not striking an appropriate balance.
"There's a difference between what Bloomberg calls affordable and what we would call affordable low-income housing," said Vic Bach, who works with Waters at the Community Service Society of New York.
The mayor's definition covers a wide range. The housing lotteries on the Web site for the city's Affordable Housing Resource Center offer units to a variety of income levels. A drawing for a studio on Gates Avenue in Brooklyn is open to anyone with an income of $21,118-$26,400, while a drawing for a two-bedroom apartment on West 116 th Street is open to tenants with an income of $72,400-$141,800. The city considers both units "affordable."
Inevitably, the housing issue boils down to the simplest of economic concepts: supply vs. demand. In other words, more people want to live here than can actually fit here.
Ingrid Gould Ellen, an associate professor of public policy and urban planning at NYU, said New York, which has a population estimated at 8.1 million, is the densest city in the country, leaving developers little room to build.
"Normally when you have an increase in demand in a market, you just increase supply, and prices don't rise that much," she said. "But if you can't increase supply, prices are going to rise."
As those prices rise, so do concerns about the city's future. Some worry that the housing market will crash, leaving property owners with no return on their investment. Others worry that lower-income residents will be forced to leave the city, depriving businesses of a valuable employees.
And still others say that the housing situation is not a "crisis" at all, but a sign that the local economy is prospering. According to this perspective, the market will sort itself out, pricing out some people and bringing in others, but keeping the city humming along.
Either way, the city is changing, and how well we adapt to those changes depends at least in part on how many $100 bills we have available to stuff into a bag.
Copyright 2006 Newsday Inc.
