Wednesday, July 11th, 2012

"Micro Apartments" and the Nefarious Rezoning of New York

I love me some Michael Kimmelman, even when he is profoundly wrong, in his new role as Times architecture critic, about how New York City does and should work. (Though when he's right, he's right! People should be rioting over the $4-BILLION World Trade Center PATH station!) He is a gentle and thoughtful soul. I will also point out that Kimmelman has published thirteen times so far this year, which, my goodness, that's the last good job in America. So I suppose when I see things like his Twitter output today I recoil in horror, because, while I am perhaps a bit overly cynical about the rationale behind development in New York, even a fairly normal person might think that radical rezoning and the introduction of free-market "micro-units" of 250-square-feet is perhaps something of a dark sign!

Let's talk about this touted micro-unit business!

Officials say there are about 1.8 million one- and two-person households in New York City, but only about a million studio and one-bedroom apartments—a sign, they say, that the city's housing stock has not kept up with its changing demographics.

Those one- and two-person households include much of the City's stock of middle class and well-off gays, for one thing. And rich singles. You can't really shove small/childless households into a single demographic club. For another thing, it's the larger households—particularly with children—who are more likely to be poor. And the un-rich singles form households out of roommates.

Young, single New Yorkers in particular can find it hard to find an affordable apartment as demand outstrips supply.

Hmm. It's in part "demand" and "supply," which certainly has an effect on vacancy rate, but what's actually happened to force the vacancy rate to its current crazy breaking point is owner occupation, due to amazingly rising rents and low interest rates. When you do the math on mortgage v. rent, mortgage currently makes sense—if you're well-off enough to put a lot of money down. But new owners is really what squeezed the rental market—not an increase in renters.

The mayor is calling for proposals over the next two months for a building containing about 80 micro-units, all of which must have kitchens and bathrooms…. The apartments, once built, will be sold or rented on the open market. The city will not be subsidizing the project. If successful, the pilot project could help usher in a loosening of the city's zoning laws regarding minimum housing size.

That's right: no subsidies, and welcome to the open market. So now we can introduce a stiff competition to get into a building of 250-square-foot apartments. The future is actually going to be worse than Blade Runner.

The mayor said the project is part of his plan to create or preserve 165,000 affordable homes in the city by 2014.

I believe that the Mayor believes in this plan. But no on else does, because they don't have the incentive. (Also, let us never forget that the plan says "create OR preserve," which is sort of like… okay so a baseline of success is zero new affordable homes? Okay!)

Let's take 8 Spruce! That's the Frank Gehry building downtown. (Which is lovely, by the way, on the inside! Though frankly, Mr. Gehry, I found the pool to be small.) As you may recall, the building got "$203.9 million in tax-free financing from the New York Liberty Bond Program," and got a 20-year tax abatement by, instead of creating affordable units, donating 3% of their financing to the New York City Housing and Urban Development Council. (That's how it works: either you cough up some cash, or you have to put poor people in your building.) Wouldn't you cough up $6 million in exchange for being able to rent out $6400 750-square-foot one-bedroom apartments? (Though you get two months free rent on a 14-month lease! And amazing views! Plus no broker fee! Those apartments are really pretty, especially if you don't own anything and/or are Patrick Bateman.)

As far as I can see, every bit of development and rezoning from Giuliani to Bloomberg has only served rich and upper-middle-class people, from the new garbage high-rise canyon that is Sixth Avenue in the 20s and 30s to the Williamsburg waterfront. The development, while adding needed dwelling units, has had profoundly negative impact on middle-class and not rich people. And it's had a profound impact on neighborhoods: what happens to your rent when there are $6400 one-bedrooms all around you? Yup.

The pro-development agenda of the Mayor—which, yes, is part of the lifeblood of the City! Money is what makes the City go round!—cannot compete with the pro-affordable housing agenda of the Mayor. There is absolutely nothing about rezoning Midtown East and creating "free market micro-apartments" that will serve people who should have affordable housing, really it's quite the opposite.

11 Comments / Post A Comment

julebsorry (#5,783)

As someone turned down today for a $2300 "1.5 bedroom" apartment (as in, a long railroad apartment with a decent-sized kitchen and living room on the ends, and two tiny, dark cubbies in the middle carved out of the hallway) because my bank statement – which is now apparently part of the docs needed for apartment approval – didn't show enough "liquid assets" despite making almost 70 times the rent…fuck NYC real estate.

I'm moving to Los Feliz, Montclair and/or Rye.

whateverlolawants (#19,108)

@julebsorry Wow, this is giving me a whole new perspective on NYC real estate. I knew apartments were expensive and small, of course. But getting approved there is that ridiculous? I'm just gonna be grateful for what I have in my midwestern city, which is a nice apartment so big and so comparatively cheap that I don't want to talk about it here and rankle anyone.

bassknives (#2,903)

Next: We all get to live in pod hotels and giant human-on-the-cob farms from The Matrix.

A suggested policy upgrade: hurricane-proof air-conditioned dome.

SkinnyNerd (#224,784)

@bassknives Seriously, this guy will have us paying rent to live in coffins, go to some corporate sponsored public bathrooms that we still have to pay for, and whatever other way he can get his wealthy buddies to extract our blood from our bodies, because at this point, that is all we have left.

Anyway, I usually refrain from picking on people's physical characteristics, but I will make an exception for this nefarious character. Is he not the New Yorker that takes up the least amount of space? Both on the vertical and horizontal planes. Yet he has merged I do not know how many townhouses together for him to live in. What does he use all that space for? And on top of all that, his double wide townhouse apparently is so good that he refuses to live in Gracie Mansion. Has anyone seen Gracie Mansion? What does he have in those townhouses?

I do not even know why I am ranting, because I enjoy small living spaces. Oh yeah, Bloomberg.

And I love how he takes the subway, yet he has two huge SUVs drive along the subway route, in case he decides he wants a ride somewhere along the line. I can go on for hours.

Mr. B (#10,093)

People should be rioting over the $4-BILLION World Trade Center PATH station!

No way, dude! We Jerseyans want the fanciest, most expensive train stations we can get. We love us some PATH!

Lockheed Ventura (#5,536)

Increasing supply will eventually reduce prices. Owning an apartment or renting one is still "demand" for the limited "supply" of apartments. If a highrise that once held 200 apartments, can now hold 250 apartments due to the rezoning for smaller apartments, that will increase the relative supply and therefore reduce prices. The problem of course is the demand for Manhattan apartments is so steep that it would take a great deal of new supply (or a massive economic downturn) to actually affect prices in any meaningful way.

Just look at all the high rise apartments built in the Miami area in the last decade and how much more affordable luxury apartments are in that area.

The upzoning of Midtown East is not being done to provide affordable housing. It is driven by the concern of landlords in the area that the commercial core is less competitive with all the new office construction that has taken place in Midtown West, the new construction at the WTC site and the proposed massive development at Hudson Yards. Many of the older highrises in Midtown East are less attractive for Class A tenants so Midtown East building owners want a rezoning for taller buildings which will make highrise teardowns (a very expensive proposition) cost effective enough to encourage construction of new Class A highrises in the Midtown East core. This issue is currently arising in the case of the 425 Park Avenue redevelopment where zoning rules make a tear down impractical or at least more complicated than it needs to be. Plus, they are likely eyeing some of the last remaining tenements on the East Side for high rise development.

The Midtown East rezoning is largely driven by the commercial market and is separate from the studio apartment rezoning which I believe eventually would be a city wide regulation.

Art Yucko (#1,321)

"Microapartments" + "New York" = "Redundant"

flossy (#1,402)

"My apartment is too damn big!"


Reading this, I was trying to calculate just how much somebody would have to pay ME before I'd live in a micro-studio in Midtown East.

stuffisthings (#1,352)

The zoning change is unlikely to do much for NYC housing, but I can't really see how it would hurt. And 250 square feet is a decent size for a one bedroom by international standards…

@stuffisthings I feel like it would hurt in that it creates a terrible baseline for apartments. The microapartments still would cost over $1,000 per month.

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