Friday, November 16, 2007

NY Sun: Concerns Rise Over Brooklyn Boom

The NY Sun writes critically about the massive residential building boom in Downtown Brooklyn. This is not an article about the Abolitionist homes, but about the shaky financial situation of this real estate bubble. The article, Concerns Rise Over Brooklyn Boom, has this to say about the recent revisions to the 421-a laws:

A former City Council member and a partner at the law firm WolfBlock, Kenneth Fisher, said recent revisions to the 421-a program could be devastating to downtown Brooklyn's residential market.

"Given the credit crisis and problems on Wall Street, they picked exactly the wrong moment to choke the golden goose," Mr. Fisher said. "Even the biggest developers are worried that there is simply not enough subsidy to meet the need. The 421-a requirement for affordable housing is already skewing the market. Projects are being accelerated to meet the deadline, creating a glut just as the demand might soften."

"Home ownership is at risk as developers switch to rentals because there are no meaningful subsidy programs for condos," he said. "The biggest losers will be the smaller projects, which can't possibly qualify or navigate the subsidy program."

Several other news sources have mentioned that there are three (3) hotels being built on Abolitionist Place (Duffield Street between Fulton & Willoughby), but the Sun mentions this additional project that has not gotten much press:

United American Land is planning to build a $208 million development a block from Fulton Street Mall and MetroTech. The development site occupies approximately half a square block along Willoughby Street, between Bridge and Duffield streets. The 594,000-square-foot development would include retail stores on the base with housing on top.
In any other neighborhood, a $208 million development would be big news. But in Downtown Brooklyn, it's just part of the wash.

It would be nice to think that someone in the New York government was minding the store, making sure none of these many $200+ million project don't fall through given the current market.

The NYC Economic Development Corporation is demanding a high standard of proof of Underground Railroad activity at 227 Duffield. Given the shakiness in real estate, maybe the agency should also demand a high standard of proof of solid financial planning before letting all these skyscrapers rise.