May. 12, 2009
Tags: Renters Market New York City
, Co Op
, High Rise
Great Recession prices are drawing even the most loyal outer-borough dwellers back to Manhattan. The migrants hail from Hoboken, Astoria and the brownstone blocks off Prospect Park, as New Yorkers who found themselves priced out of the gilded isle in the boom years are bidding farewell to long commutes and skinny-jean chic.
Among the lures: $1,600 one-bedrooms on the Lower East Side. Lenient landlords who no longer require security deposits. And an overriding sense that an obscenely overpriced borough is now, well, slightly more reasonably overpriced.
“There’s a part of me that feels like I’m cheating on Brooklyn,” said Keith O’Brien, a 30-year-old in marketing and public relations who recently jumped from a spacious two-bedroom in Greenpoint, Brooklyn, to a Lower East Side walk-up. “But this was a unique moment in real estate history where renters have the upper hand, which seemed unbelievable a couple of years ago. I realized that it would have been foolish not to start looking at places.”
For an extra $100 a month, Mr. O’Brien — a seven-year Brooklyn stalwart — is now enjoying a trendy location and a six-minute commute, in exchange for losing half of his living space. “There’s no sink in the bathroom,” he said, “but concessions must be made.”
Newly minted Manhattanites range from 30-somethings seeking a professional edge through a shorter commute, to out-of-work recent graduates who think they can get a better deal on the Upper East Side than in the usual post-college enclaves of Williamsburg and Fort Greene.
Numbers on the New York rental market are notoriously unreliable, but recent reports suggest that rents are falling faster in Manhattan than in neighboring boroughs.
In the first three months of the year, one-bedroom rents in Manhattan fell 6.7 percent compared with the previous year, while Brooklyn one-bedrooms dropped just 3.2 percent, according to data from Citi Habitats and Ideal Properties Group, both brokerage firms. Other reports show some Manhattan rents down by 10 percent from a year ago.
“I just got lucky with the whole financial meltdown,” said Kristi Giamichael, 26, who earlier this year gleefully tracked falling rental prices on Craigslist from the Hoboken duplex that she shared with two friends. She liked her neighborhood bar scene and the $1,172 rent, but realized Manhattan was no longer prohibitively expensive.
On May 1, Ms. Giamichael and a roommate moved into an 800-square-foot one-bedroom in Ruxton Towers, a landmark prewar building on 72nd Street off Central Park West. The two will split the $2,600 rent, and the landlord paid the fee to their broker, Caroline Bass of Citi Habitats.
Like many young adults, Ms. Giamichael moved to New York at a time of brutally high rents in Manhattan. Those seeking perks like in-house gyms and roof decks flocked to Hoboken and Long Island City, where amenities could be had for the price of a Yorkville walk-up.
Now, prices at upscale rental buildings like 45 Wall Street have come down significantly, discounted by 15 to 20 percent in recent weeks. At 20 Exchange Place, a tricked-out conversion around the corner from the Stock Exchange, the management company will waive the security deposit if the prospective tenant’s credit checks out. Stuyvesant Town offers the same perk on some apartments, along with waiving the broker’s fee.
“We do see that certain neighborhoods in Manhattan may be a better deal than certain neighborhoods in the boroughs,” said Stephen Love, a broker at Ardor Realty.
So some New Yorkers who came to appreciate the outer boroughs — spacious apartments, neighborhood charm — are finding reasons to return.
Matthew Creamer spent nearly a decade in Brooklyn (with a brief stopover in Hoboken), rotating through Smith Street, Cobble Hill and finally Sunset Park, where he spent four happy years in a 1,000-square-foot one-bedroom for $1,400 a month.
“I told a lot of friends that I would never move back from Brooklyn, had no desire to move back to Manhattan,” he recalled. “I said that on a lot of occasions.”
But in March, Mr. Creamer, 32, began to feel anxious about his 45-minute commute to Midtown, where he works as an editor at Advertising Age. “So much has changed in the past six months,” he said. “In the past, people wanted a separation from work on the weekend. I liked the fact that the neighborhood I lived in couldn’t be any more different from the place that I worked.”
Andrew Baisley is Bushwick’s loss and Chelsea’s gain.
Now, Mr. Creamer said, “people are so worried about their jobs and the general economic situation, that people don’t mind being near work. It may even make them feel a little bit safer.”
The possibility of subway cutbacks made him worry about making morning meetings on time. “At a 45-minute commute, it’s not the worst thing in the world,” he said. “But if something goes wrong, it gets ugly really quickly.”
Mr. Creamer began searching for a place near Grand Central Terminal, aware that he would have to sacrifice space (and price) for peace of mind. Last month, he moved into a studio in a building with a doorman at 33rd Street and Park Avenue with views of the Empire State Building. Although he pays more in rent than he did, he calculates that he nearly breaks even, now that he’s free of his monthly MetroCard and hefty late-night cab fares. And he received one month free on a 13-month lease.
The place is a third the size of his last apartment, and he does not have the basement storage he enjoyed in Sunset Park. At times, he misses the neighborhood feel of his old haunt.
“Nothing has changed as far as the way I feel about Brooklyn as far as it being one of the best places on earth to live,” he said. “I doubt I’ll come out of my experience in Midtown thinking that. I’ll probably like it, but I can’t imagine having the same feeling for it.”
Brooklyn on the whole is still more affordable than Manhattan: one-bedrooms east of the river cost an average of $1,901 in the first quarter, compared with $2,432 in Manhattan, according to market reports.
But the flow of Manhattanites into Kings County has apparently slowed. In the first three months of 2008, nearly a quarter of renters moving to Brooklyn hailed from Manhattan. A year later, only 9 percent of renters came from across the river, according to data from Ideal.
And some of Brooklyn’s trademark tenants — underemployed recent graduates — are also changing their minds.
For two years, Mark Schenkel, 25, has lived with roommates in a ground-floor apartment in a Windsor Terrace brownstone. Mr. Schenkel is paying $1,175 a month for a building with no laundry. His commute to work in the West Village was a half-hour haul on the F train.
“I always assumed that Manhattan was way too expensive for me and out of my reach,” said Mr. Schenkel, who moved to the city in 2006. But when his landlord threatened a $100 rent increase, he decided to shop around.
“Just for fun, I started looking at the Upper West, Upper East,” he said. “Everybody talks about how nice and ritzy it is. I was shocked to see some of the prices.”
In Yorkville, for instance, he found rents that were several hundred dollars cheaper than what he and his roommates are paying in Brooklyn.
“They’re a little bit smaller, but they have some of the amenities that I don’t have now,” he said, citing perks like a laundry and an elevator. Most of the apartments he has toured are renting for under $1,000 a person.
“A lot of these places are just desperate to find people,” Mr. Schenkel said. “People are responding to my e-mails within minutes to look at the apartment. People are saying, ‘Come whenever you want.’ ”
Craigslist directed him to a three-bedroom in a small building off First Avenue on 88th Street; the monthly rent came out to $730 a person, with no broker’s fee.
Alas, that particular apartment was “big, but had no kitchen or place to sit,” Mr. Schenkel later wrote on Twitter. “It’s like the builders forgot to include that.”
The recession has not been kind to Mr. Schenkel, who recently lost his job with a record label. But unemployment has only underscored his interest in moving across the river. The Upper East Side is home to big retail franchises like Barnes & Noble and Best Buy that may still be hiring.
In Brooklyn, he said, “all the local stores have two or three people working for them at a time. Mom-and-pop shops don’t need people in this economy.
“I never thought losing my job would be one of the reasons I end up moving to Manhattan,” Mr. Schenkel said, sounding a tad dazed. “It seems backward to me, what’s going on.”
Renters aren’t the only ones looking to move. When Paul Kolbusz, a broker at the Corcoran Group, decided to buy in 2007, he opted for a new development in Long Island City. He was willing to give up Manhattan conveniences for the extra living space.
That was before the bubble burst. Earlier this year, with construction still incomplete, the developer was obligated to offer Mr. Kolbusz the right to rescind his contract. He jumped.
“They were trying to negotiate with me in order to keep me,” Mr. Kolbusz said. “I decided against it because Manhattan opened up in ways that it hadn’t before, and I didn’t want to miss the opportunity.”
Now he is shopping in prewar buildings in Murray Hill, and mulling over a $500,000 one-bedroom with beamed ceilings on East 28th Street. The unit is just $30,000 more than the Long Island City condo he left behind, but has two-thirds of the living space.
Even as rental prices fall, a little bit of luck can’t hurt in finding that dream apartment. Perry Balin, 28, spent a year in a $900 studio in Boerum Hill. Children ran screaming in the hallways and the heat cut out in the middle of winter.
“I’d always wanted to live in the city my entire life,” she said, “and Brooklyn was my second choice. I took it because it was what I could have at the time.”
Encouraged by chatter about cheap apartments, she set off with her broker, Jeff Brenner of Citi Habitats, to a fourth-floor walk-up studio on West 95th Street just off Central Park.
“It faces the back of the building, all of the really rich people’s yards on 94th Street,” Ms. Balin said. “I look out the window and feel like a millionaire.”
Her terrier, Tess, is more social and enjoys walks in the park.
The rent: $1,225 a month. Ms. Balin, an aspiring singer, hummed when she disclosed the figure. “Now, don’t be jealous,” she said with a laugh.