Photo by D. Bell
A reader wrote in and wanted some advice about purchasing a unit in the new PS 90 Condos in the upper 140s. Perhaps some of our real estate experts can chime in and enlighten us.
I was called for my second interview and asked to select an apartment, but 300K seems like so much money for a so-called “affordable” unit. And it’s a studio. They’re asking 450-800K for the market rate units. In this economic climate. How likely is it that they’ll sell for that much? So why can’t the lottery folks negotiate prices?
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Posted in: Real Estate, What's Up?
123uptownside
November 22, 2009
I have lived in Harlem for along time, with many regrets about not buying into the apartments when I could have a number of years ago, however as I walk the streets and see many developments not complete with buyers just walking aaway. I fear we are returning to the ’80′s. The clientele can not support these prices, low income or otherwise. On the news they wrote that 1 in 10 individuals are unemployed in NYC and 1 in 25 are underemployed. I was called for PS 90 and laughed at the asking price…. These apartments are supposed to be offered at a price that does not lend itself to a profit and I’m sorry these developers are making a mint.
Anonymous
November 19, 2009
There’s always a chance that market units can turn into rentals. The developers would just have to amend or scrap the offering plan. Buyers get their deposits back. All I can say is if you feel funny or at all unsure about moving there, then don’t. The lottery was just a chance to buy the unit. It wasn’t a prize or anything so don’t feel bad or cheated that you aren’t going to take it.
Personally, I think the block is great. The building will have character (a lot of new developments don’t). I saw the model apartment and it was impressive. It’s around the corner from a Police Service Area (Housing Police Station).
Poster number 3 is convinced it will be shoddy construction and I might suspect that from a fly by night developer who is only working on one building but L&M and Goldman Sachs are behind PS90. L&M has been around for decades and built affordable housing all over the place.
Will the building have problems? Sure. But will it fall apart in 5 or 10 years? I hope not.
It’s a tough decision. But don’t feel pressured into buying it just because you won the lottery.
That said, you can probably get a GREAT DEAL in the South Bronx. And with the Gateway Center Mall and the new Yankee Stadium, it’s almost like the Bronx has a real downtown (I’m from the Bronx originally).
Good Luck. Go with your gut and your heart and your head, but not it that order. Reverse it!
Anonymous
November 19, 2009
Harlemite – I would strongly disagree with you. First of all the term “luxury” is applied to anything in Harlem that’s built…and does not mean it actually is….(if you know what I mean). Secondly, just because something is “so-called” inside and lottery based does not mean it’s a “steal”, or even a “deal”. An Example would be Beacon Towers @ 5th Ave between 138th & 139th, “so called Luxury”, blah blah blah, and a lottery development/HPD, etc. Well, Lots of people won, and after winning and the market re-adjusting….that “inside” price was above market and nonsensical. Beacon Towers could not sell to the “lottery winners”, they all passed. I believe that’s a deal with Lemle and Wolff, Inc. with Abyssinian Development Corporation. Also, when a developer builds knowing the prices are capped on a certain amount of units (and profits controlled basically) – from the developer’s standpoint it becomes a race to the bottom, cut every corner you can, as the profit is in getting the building up, quality be damned. Talk to Bradhurst dwellers about shoddy quality of “new construction”. Never buy into a HPD type of project at market rate – the days of Harlem “set aside” deals died 4 – 5 years ago. No more are there real deals like Rosa Parks, I have friend that got into the Renaissance Bldg, 2 Bedroom for under $10,000 in ’01 or ’02 as I recall, they basically gave the shares away. The last “deal” was that development called “Strivers ____?” at the top of 135th above 8th Ave. I believe some people got 1 and 2 bedrooms for under $200K 4 or 5 years ago. Since then…..these HPD “deals” really have not been “deals” at all…and just wait when the new construction falls apart in 5, 10 years…watch how expensive it is to fix stuff…..if I had a $300K budget today, I sooner go to SoBro and get some space, than this shoddy constructed bldg….
dasit
November 19, 2009
I do hear what you’re saying Harlemite. And, ordinarily, 300K for an 800 square foot studio would be a good deal. When it comes to this lottery, however, I think there might be a few problems:
1. The income cap for units at this price is 77-113K annually. (There were a few 205K studios and one 1BR which are now gone. The income cap for those was 57-78K). Maintenance will be at least $600/month. So, for people at the lower end, assuming, say a 5% mortgage interest rate, the mortgage and maintenance alone is almost 50% of gross income. That’s a lot. Seems contrary to the idea of making something “affordable” for certain buyers. Especially when the developers bought the building from the city for one dollar ($1) and are doing everything they can to chintz down the affordable units (e.g., the market rate units have real hardwood floors; the affordable units have carpeting.)
2. There are 20 “affordable” units. The other 74 are priced at market rate:
http://www.halstead.com/developments_search.aspx?numb=68786
But which market?! The 450-800K asking price is about equivalent to another recent condo conversion in the vicinity — the Langston at 68 and Bradhurst — and sales started there in about 2006, if I remember correctly. Maybe half a million dollars for a studio made sense in 2006 (if it ever does), but in 2009? On 148th and FDB? I just don’t see that being a realistic ask and, if the market units don’t sell, won’t the affordable owners not be able to take possession? Isn’t that the way these lotteries work? Or, isn’t there a chance that the unsold market units would be turned into rentals?
Harlemite
November 19, 2009
In NYC, 300k for a brand new luxury condo is a steal. It is very affordable. Lotteries can’t negotiate ecause their prices are already so low and set by several agencies. The prices are determined by the cost of the building and the underlying mortage and funding that made the unit so low priced in the first place.
These programs work for keeping the middle class in NYC so the city doesn’t have a drain to the suburbs and it cAn keep the tax revenue.