Brooklyn has become the scorching hot real estate market that Manhattan was in the 1970s: a middle class ghetto surrounded by wealth, eye-popping net worths and double-digit property appreciation. Or at least that’s the case for what is referred to as “downtown Brooklyn”, a collection of tony neighborhoods like Brooklyn Heights, Park Slope, Cobble Hill, Carroll Gardens and DUMBO. Thanks to what’s left of rent control and stabilization, while there are still legacy denizens living in those neighborhoods, one can’t even think about being their neighbors today without a generous Wall Street executive salary. The average 2019 monthly rent paid in the Heights is $3,721 according to RentCafe.com. That means a salary of at least $200k/year if you want to be able to, you know, eat. Because as rents skyrocket, here comes the $25 grass-fed hamburger at the local artisanal watering hole.
Developers have left no stone untouched in their quest to monetize everything in sight. Red Hook, the waterfront area of Brooklyn immortalized for being a crime-ridden, blue collar tenement enclave in Elia Kazan’s On The Waterfront and which was savaged in the flooding of Hurricane Sandy sits next door to Carroll Gardens. It clocked some of Brooklyn’s highest condo prices this year, like this questionable gem at a mere $5 million. PS: you probably could have bought that building for $25,000 in the 1990s. Other adjoining neighborhoods like Kensington have also seen explosive property values in the past year: a 34.6% increase.
So who’s got the cash/dinero/rubles/shekels to live here? Where does all this wealth come from? I honestly don’t know. Obviously, a lot of it is from Wall Street, which generates obscene compensation packages. A friend who acquired three raw Soho lofts in the 1970s for about ten grand each rents them out to self-indulgent 20-something investment bankers today for up to $30k a month. I even met an executive secretary at Lehman Bros who took home a $300k Christmas bonus in 2005. A lot of it is foreign wealth. NYC’s real estate economy is has been historically a safe investment for overseas oligarchs despite the warnings every year that the rug is due to be yanked from under it. It’s a bubble that even when it does burst, repairs itself pretty quickly.
On the plus side, my house is worth 6x what I paid for it in 1999 and the development tsunami hasn’t even struck Bay Ridge yet. I can see the wave on the horizon though. It’s already crashing through Sunset Park and Industry City. Next stop: Us.
A friend sent me a great piece of satire on McSweeneys on who these people are and what they aspire to be.
When Guy Partnerman and Lady Millionaire purchased a brownstone in the most Brooklyn-themed neighborhood of Brooklyn, there was only one drawback: the home was too beautiful.
“Crown-molded ceilings, natural sunlight, not a trace of ‘Live, Laugh, Love’ decor. To call it a fixer-upper wouldn’t be right, but we had some ideas. That’s who we are. People with ideas and the means to execute them flawlessly,” said Ms. Millionaire, 37, a movement-based flautist.