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12 Crown St (near shuttle tracks) to go condo — Brooklynian

12 Crown St (near shuttle tracks) to go condo

whynot_31
whynot_31
edited November 2016 in Crown Heights/Prospect Lefferts Gardens
This building is adjacent to the large, vacant lot that used to have the Sea Crest Laundry on it: http://www.brooklynian.com/discussion/39234/the-sea-crest-linen-site-46-crown-st-#Item_10  

 The conversion of this site from rent stabilization to condos will result in different demographics. 



 Joel Wiener’s Pinnacle Group plans to convert a six-story Crown Heights rental building just east of Prospect Park into condominium units, according to a condo offering plan filed with the New York state Attorney General’s office. The 85-unit rent-regulated building at 12 Crown Street spans 95,500 square feet and includes one commercial unit. As of June, all 84 residential units in the building were rent-stabilized, according to the landlord’s tax records. The conversion has a projected sellout of $74.8 million, which means an average of less than $1 million per apartment. No conversion plans have been filed yet with the Department of Buildings.

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Comments

  • mugofmead111
    mugofmead111
    Well, well, well...

    Good luck to everyone
  • whynot_31
    whynot_31
    edited November 2016
    Yes, it is unlikely that the current tenants have the "less than $1m per apartment" ready to spend.

    Or, have the ability to borrow that kind of $.
  • Marco555
    Marco555
    I agree that these neighborhoods need condos or something city-loving millennials can own. There's a real lack.
    But a million for an apartment (average size is 1,123 sq feet) in that building and at that location? Well, shit.
  • whynot_31
    whynot_31
    Time will tell if the landlord has to abide by a no-eviction plan:  http://www.nytimes.com/2015/03/15/realestate/for-holdout-renters-condo-conversions-can-be-messy.html?_r=0
  • yesbrooklyn
    yesbrooklyn
    Lol that was my next comment.  What does the sellout of 74.8 million mean?  Is that what they'll offer for people to leave?
  • whynot_31
    whynot_31
    I believe that is the amount the owners expect to walk away with if they sell all of the units.   The sum of the prices that are listed in the Black Book (see page 12 on the below link).    

    Note the owners wants to set these prices low enough (and make the payouts to those leaving large enough...) that the right amount agree to the plan.

    Usually, there are some holdouts.   

    The tenants do have rights in this situation:

  • pragmaticguy
    pragmaticguy
    I think this would still fall under New York's non-eviction rules so it may be awhile before this building goes completely condo. In addition, I'm sure that present tenants will get some kind of discount if they buy in right away as the landlord would not have to renovate those apartments. So, I'm figuring maybe 50% of this building will go co-op within the next three years. And though all of the apartments are rent stabilized it doesn't mean that they're all occupied at present and I'm sure those apartments are going to be sold first.
  • mugofmead111
    mugofmead111
    whynot_31 said:
    Time will tell if the landlord has to abide by a no-eviction plan:  http://www.nytimes.com/2015/03/15/realestate/for-holdout-renters-condo-conversions-can-be-messy.html?_r=0
    Not official eviction, but constructive eviction? 
  • whynot_31
    whynot_31
    Defacto?
  • mugofmead111
    mugofmead111
    whynot_31 said:
    Defacto?
    Yes, that. 
    For example, a landlord tries to do "work" on your unit but leaves it unhabitable like this:

    image
  • whynot_31
    whynot_31
    I wonder which is harder to survive as a RS tenant:

    1. The relatively rare scenario in which your building goes condo, or

    2. The relatively frequent scenario in which apartments are flipped to market rate, but stay rental.

    From a legal perspective, the first seems harder than the second.
  • mugofmead111
    mugofmead111
    Marco555 said:
    I agree that these neighborhoods need condos or something city-loving millennials can own. There's a real lack. But a million for an apartment (average size is 1,123 sq feet) in that building and at that location? Well, shit.
    Is there really a lack of condos on the market?

    The impression I got is that a number of the young millenials (ugh at that term) are transitional residents. Why put down roots, especially if one is looking to move if/when one starts a fmaily?
  • Marco555
    Marco555

    Marco555 said:

    I agree that these neighborhoods need condos or something city-loving millennials can own. There's a real lack.
    But a million for an apartment (average size is 1,123 sq feet) in that building and at that location? Well, shit.

    Is there really a lack of condos on the market?

    The impression I got is that a number of the young millenials (ugh at that term) are transitional residents. Why put down roots, especially if one is looking to move if/when one starts a fmaily?


    Millennials encompass a large age range, many of whom are looking to settle down or are in the process.
    Yes, the housing stock in Crown Heights/PH is such that either you buy a brownstone and gut renovate it or a tiny, overpriced apartment in a newly built building. There's no normal or in between. Manhattan fares better in this department. Plus, because of the tax breaks, most of these new buildings coming on line are rentals.
  • whynot_31
    whynot_31
    This unit at 12 Crown Street appears to have already been renovated.


    The rent is $2k for a 2 bedroom.    If two tenants split the rent, $1k each.

    "Must have income or combined income of $80,000. Guarantors welcome"
  • mugofmead111
    mugofmead111
    Millennials encompass a large age range, many of whom are looking to settle down or are in the process. Yes, the housing stock in Crown Heights/PH is such that either you buy a brownstone and gut renovate it or a tiny, overpriced apartment in a newly built building. There's no normal or in between. Manhattan fares better in this department. Plus, because of the tax breaks, most of these new buildings coming on line are rentals.
    NYC as whole (not just Crown Heights or Prospect Heights) is a city of renters though. 

    "For New Yorkers in in their 20s, 30s, and early 40s, the renters outpace the buyers by substantial numbers. Only when the householder age reaches the 50s does the number of homeowners catch up with the number of renters—and that’s only when you factor in owners who own their homes free and clear (i.e., magical, mortgage-free unicorns)." (Source: New York Is a City of Renters at Every Stage of Life: The American Dream trajectory of renting while young and owning a home later doesn’t quite apply in NYC.)

    Also:
    "Renters run New York City. Renting is fate for the young and trending in Brooklyn and Queens and the Bronx. It’s also just a cold, hard fact of life for most everyone else in NYC."

    Why is this a problem?
  • booklaw
    booklaw
    It is a problem because renters have little or no protection against rent increases, or worse, eviction, as neighborhoods gentrify and developers raise rents or convert buildings to condos.
  • whynot_31
    whynot_31
    Perhaps needless to say, renters who pay more in rent have more "protections".

    However these protections seem to primarily stem from their power in the market place, as opposed to better government regulations and enforcement.
  • Marco555
    Marco555
    edited November 2016
    @mugofmead111 I agree with @booklaw and add that NYC is a renter's hell ("cold, hard fact") doesn't have to be reality. I see no reason to accept that. 

    Plus, wouldn't it better for the neighborhood/community to have homeowners who pay property taxes? I'm no expert in this field, but I imagine the current owner of the building enjoy various tax breaks for housing rent stabilized residents. 
  • whynot_31
    whynot_31
    Renting is less of a hell in the parts of the city where there is not a large difference between what one is paying, and what others WILL pay.
  • mugofmead111
    mugofmead111
    edited November 2016
    @Marco555 - the article which I cited does state that renters do pay a share of real estate taxes too. "The real problem with New York City is that renters pay a wildly disproportionate share of the property tax burden. High property taxes for renters defray the correspondingly low property taxes for owners. So renters are in a direct sense subsidizing the high quality of life enjoyed by owners in New York City. Gotham renters are paying the way for owners, and renters are not exactly living the dream."
  • Marco555
    Marco555
    @mugofmead111
    All the more reason renting is a problem for renters!
  • mugofmead111
    mugofmead111
    Marco555 said:
    @mugofmead111 All the more reason renting is a problem for renters!
    Here it comes with the territory. 
  • mugofmead111
    mugofmead111
    booklaw said:
    It is a problem because renters have little or no protection against rent increases, or worse, eviction, as neighborhoods gentrify and developers raise rents or convert buildings to condos.
    For rent-stabilized tenants, protection exists on the books. Whether it is enforced is another matter.
  • whynot_31
    whynot_31
    My time estimate depends upon the price difference between market rate units and RS ones, but I think rent stabilization protects tenants for about 2 years.

    After that, the average RS tenant has to be seriously determined and know their rights in order to stay.

    ...and not be susceptible to buyouts.
  • booklaw
    booklaw
    What percentage of Brooklyn rentals are still rent stabilized? As RS apartments reach $2700 rent levels, they become eligible for de-stabilazation. Accordingly, as Crown Heights continues to gentrify, the pace of destabilization is likely to increase.
  • booklaw
    booklaw
    edited November 2016
    What percentage of Brooklyn rentals are still rent stabilized? As RS apartments reach $2700 rent levels, they become eligible for de-stabilization. Accordingly, as Crown Heights continues to gentrify, the pace of destabilization is likely to increase.
  • whynot_31
    whynot_31
    This chart used a broader term "rent regulated" and says that in 2011, 44.3% were.   


    Screen Shot 2016-11-22 at 7.10.42 PM


    However, we should account for the fact that the rent regulated rates have been falling about 5% every 10 years, and it is 2016.


    Screen Shot 2016-11-22 at 7.07.00 PM


    So, let's (for the heck of it) estimate that around 41% of Brooklyn apartments are still Rent Regulated and that about 27% of them meet the stricter term Rent Stabilized.

    (To get an accurate number we'd need to factor in the growth of overall housing units, add  the number of RS apartments created under tax and zoning programs, and subtract the number of units that legally get out of RS by methods such as exceeding $2700 or converting to condos).

    We should also keep in mind that apartments can remain under rent stabilization and still respond to the market.   For example, as a result of having a few renovations, Unit C5 in this building would now like a tenant (or tenants) that can pay $2k a month in rent and has a household income of $80k.        http://www.zillow.com/homedetails/12-Crown-St-APT-C5-Brooklyn-NY-11225/2109335469_zpid/

    So, even if this building were not going condo, landlords are able to respond to changing market conditions.  Some do it via methods that are legal, some use illegal methods, and some use a combination of legal and illegal methods.    
  • mugofmead111
    mugofmead111
    edited November 2016
    booklaw said:
    What percentage of Brooklyn rentals are still rent stabilized? As RS apartments reach $2700 rent levels, they become eligible for de-stabilazation. Accordingly, as Crown Heights continues to gentrify, the pace of destabilization is likely to increase.
    Piggybacking on what @whynot_31 said, one needs to scrutinize what is done as part of "major capital improvements" ("MCIs"). Know what is allowable and what isn't.
  • whynot_31
    whynot_31
    edited November 2016
    I'm kind of surprised that landlords no longer use a tactic I saw on the LES in the late 1990s.

    Then, landlords would basically "clear the building" by giving a vacant apartment to large groups of drug users, given "free" or ridiculously cheap rent, and sometimes recruited directly from homeless shelters. 

    The drug users would deal out the apartment, have pitbulls, fight, urinate in the common hallways, etc. 

    The non-drug using tenants would complain and the landlord would (predictably) do nothing, Slowly but surely,  the non-drug using tenants would move out.

    Then, the landlord would tell the drug users they could no longer stay there because construction was imminent, but -fear not- he had another apartment building they could move to.

    ...where the process would begin again.   

    It isn't clear to me why this tried and true tactic has gone out of fashion.  Perhaps the NYPD now effectively goes after such tenants, and does not need the help of the landlord.

    Perhaps landlords no longer need to resort to such tactics, because the tactics discussed above take less time.   

    Perhaps NYC's homeless drug users are more difficult to find then they were in the late 1990s.   

       
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