A look at Yorkville’s affordable housing decline

Posted On Mon, October 10, 2016 By

Posted On Mon, October 10, 2016 By In affordable housing, Features, real estate trends, Upper East Side, yorkville

Despite its location just a few blocks east of Park Avenue, Yorkville remains one of Manhattan’s most affordable neighborhoods south of 95th Street. The neighborhood’s reasonable prices partially reflect its reputation. Simply put, Yorkville has never been considered quaint or hip. Since its development in the nineteenth century, it has been best known for its German delis and unremarkable yet practical residential housing. Another factor that has historically kept the neighborhood’s housing prices below average is its high stock of rent stabilized units. Unfortunately, Yorkville’s reputation as a great place to find a bargain may soon be compromised. Recently released data on affordable housing stock in New York reveals that rent stabilized housing in Yorkville is rapidly declining. Indeed, between 2007 and 2014, the neighborhood lost more rent stabilized units than any other neighborhood in the city’s five boroughs.

Second Ave Subway Arup 2

The Impact of the Second Avenue Subway

A driving force behind the neighborhood’s current transformation is the Second Avenue Subway, which is reported to be on track to finally reach completion in 2017 (although not with out delays). CityRealty investigated how just four of Yorkville’s newest developments (all on or within a block of Second Avenue) have already impacted affordable housing in the neighborhood. As detailed below, while most of these new developments will result in an increase in housing stock over all, since in many cases townhouses and walk-up buildings have been destroyed to make way for high rise developments, every one of these developments has also resulted in the elimination of three or more rent stabilized apartments.

Unfortunately, finding out exactly how many rent stabilized units have been lost at each development site is a difficult, if not impossible, task. As John Krauss, who developed the NYC Rent Stabilization Map used to research this article, explains, “If you ask the agency in charge of rent stabilization which buildings are losing stabilized apartments, they won’t tell you. The only information they’ll release is a list of buildings that have apartments in the program. The list doesn’t indicate whether every apartment in a building is stabilized, or if only some are.” To find out which rent stabilized units have been lost in New York City, Krauss matched property tax bills, which are public information, to every building in the city that is listed as rent stabilized. With these two data sets, Krauss was able to determine the number of lost rent stabilized units between 2007 and 2014.

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Even with the aid of the NYC Rent Stabilization Map compiled by Krauss, however, there are some variables for which one can not easily account. First, there is no way to know for certain how many units were lost as a result of sales to developers. It is possible that some units were deregulated prior to the sale for other reasons (for example, the rent had already risen above the threshold required for a unit to maintain its rent stabilized status). In addition, there is no way to know for certain how many rent stabilized units were lost not directly from a sale but rather in anticipation of a potential sale. Notably, landlords often opt to keep units empty, especially rent stabilized units, if they are anticipating a sale, since an empty building nearly always drives up the building’s value. Finally, Krauss was working with data sets up to 2014, but in Yorkville, the housing market has also undergone considerable upheavals since 2014.

The Kent
200 East 95th Street (1681-1689 Third Avenue)
Type: New Condo Development
Loss of rent stabilized units: 5+

When complete, The Kent will be a family-friendly high rise condo development with a pool, music room, and multi-level playroom. Available units are currently listed from $2.5 to $8 million. While The Kent’s address will be on 95th Street, the site occupies the former addresses of 1681 to 1689 Third Avenue. Until 2014, 1681 to 1689 Third Avenue was home to several business/residential buildings. According to the NYC Rent Stabilization Map, between 2007 and 2014, there was a loss of four units at 1687 and one unit at 1685. However, when the site was purchased by Extell in 2013, 1683 also had a one-bedroom unit listed at $1,495 per month. While the map does not indicate any lost rent stabilized units at 1683 Third Avenue, given that the unit was well below market rent for the time, it seems nearly certain that the demolition of 1683 also resulted in the loss of one or more rent stabilized units.

1538-1546 Second Avenue
Type: No-fee Rental
Loss of rent stabilized units: 23

Icon Realty Management, which purchased the site in 2014, plans to build a 30-story tower. The mixed use building will feature street-level retail and 63 residential units. To make way for the construction, five walk-up apartments were destroyed. Data from the NYC Rent Stabilization Map indicates that between 2007 and 2014, the walk-ups located on the site lost a total 23 rent stabilized units (five at 1540 Second Avenue, 12 at 1542 Second Avenue and six at 1546 Second Avenue). Of course, it is possible that some of these units were lost prior to Icon’s purchase. Either way, the total impact on affordable housing stock in Yorkville was still notable.

1562-1564 Second Avenue (301 East 80th Street)
Type: No-fee Rental
Loss of rent stabilized units: 9

Just up the street, Icon Realty Management has also purchased 1562-1564 Second Avenue with plans for another rental building. Originally, Icon filed to build 12 prewar-style apartments on the site with an additional 2,192 square feet of retail space. More recently, those plans have been revised and the developer is now proposing to build a residential building with 28 apartments. Data from the NYC Rent Stabilization Map reveals that nine rent stabilized units were lost at 1564 Second Avenue between 2007 and 2014. While it is unclear whether or not the rent stabilized units were lost before or after the Icon Realty purchase, it is possible that even if the units were lost prior to the sale, they were lost in anticipation.

The Justin
225 East 81st Street
Type: Condo
Loss of rent stabilized units: 3

The Justin, a condo development by Michael Paul Enterprises, has maintained the address of the previous walk-up rental building on the site but not much else. While described as a conversion, the current condo developmental at 225 East 81st Street appears to be entirely new building. What is known is that between 2007 and 2014, at least three rent stabilized units were lost at the address. A two-bedroom unit at The Justin is currently in contract with a reported sale price well above $3 million.

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