Updated 07/19/2009 03:17 PM
Brooklyn: Overdevelopment Leaves Hundreds Of Apartments Vacant
This week, the station is taking a look at how the recession is affecting the borough of Brooklyn. In the following report, NY1's Jeanine Ramirez examines the hundreds of high-end condominiums on the market with few buyers.
To view our videos, you need to
install Adobe Flash 9 or above. Install now.
Then come back here and refresh the page.
It is not an uncommon sight in Brooklyn to see a new luxury condominium building empty, except for the security guard. There are currently hundreds on the market that remain vacant.
Then there are hundreds more being built.
"A recent study shows 5,200 luxury apartments are set to hit the market by 2010," explained David Amsden, contributing editor for New York Magazine. "So what's going to happen to those apartments is a big question on a lot of people's minds right now."
The question is especially nagging for developers who started constructing high-end condominium buildings when the real estate market was at its height. Then the economy slowed down, financing fell through, construction loans disappeared.
Some projects cannot be completed. Many that are done cannot get the buyers.
"They were building apartments for people priced out of Manhattan, someone who wanted to live in a luxury loft in TriBeCa, but couldn't afford $2 million, so they'd come out here and spend $750,000 and right now that market has just evaporated."
Developers are looking to sell their condos as soon as possible and so they're offering plenty of incentives.
On the Williamsburg waterfront, Northside Piers will absorb a buyer's mortgage payments for an entire year, as well as the common charges and real estate taxes. At 150 Berry Street, there are open houses every Saturday and Sunday, a mortgage broker on site, and the developer has cut prices about 15 percent to sell the last seven of the 40 units here.
"We've of course lowered the price to be more competitive," said Mike Morton, owner of development company the Morton Group. "We've offered no closing costs."
The problem is not unique to Williamsburg, luxury condos sitting empty are found throughout the borough. This one is in Clinton Hill. Assemblyman Hakeem Jeffries did a study and found that 66 buildings in his district alone are either under construction, partially vacant or completely vacant.
"We have an opportunity in the midst of this recession, with all of these luxury condominium buildings, to be able to do something to address the affordable housing crisis," Jeffries said.
Jeffries has launched an initiative called Project Reclaim to provide tax breaks and re-financing options for developers to turn their apartments into rentals for the working middle class. Jeffries has a meeting scheduled with state housing finance agency officials later this week to work on the details, in hopes of making these neighborhoods habitable.