Tag Archives: Manhattan

In Spite of It All

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Realtor.com quoted me in 3 Most Mind-Boggling Housing Turf Wars Ever—and What They Can Teach Us All. It opens,

Welcome to turf wars! No, it’s not the latest reality TV show—it’s just a way to describe two (or more) parties insisting that a particular piece of property is their own.

Turf wars are as old as the hills, and the existence of people who could lay claim to them. And they’re at the center of some surprisingly fascinating stories of wealth, greed, and pettiness. It seems that no property is too small to inspire a bitter rivalry—including one about the size of a floor lamp—that could go unresolved for decades.

As proof, check out some of the strangest turf tales below, and the lessons we can all learn from them to avoid the same ugly fate.

1. The smallest land grab ever

In Manhattan on the corner of Christopher Street and 7th Avenue lies a 500-square-inch piece of private property in the shape of a triangle.

The backstory: In 1910, the city demolished a building owned by David Hess to build a subway, but the surveyors missed this small patch in their measurements. Later on, once this error was discovered, the city asked the Hesses to donate it, but the family refused.

For good measure, the family laid a mosaic reading, “Property of the Hess Estate Which Has Never Been Dedicated for Public Purposes.”

Per the New York Times, it’s “one of the smallest pieces left in private ownership as a result of the cutting through a few years ago of the Seventh Avenue extension. It has been assessed on the tax books for $100.”

In 1938 the family sold this parcel to the cigar shop a few feet behind it for $1,000.

Lesson learned: Land survey mistakes—or not bothering with a survey at all—can cost you big-time!

“If there’s any question about who owns what, it’s better to be safe than sorry and get a good survey done,” says David Reiss, a law professor at the Center for Urban Business Entrepreneurship at Brooklyn Law School.

On a more human level, we can learn this: “Spite is about as powerful as an immovable object,” says Reiss. “If you try to dislodge it, you will in all likelihood lose.”

Skyscraper’s Future up in The Air

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The New York Law Journal quoted me in Upper West Side Skyscraper’s Future Uncertain After NY State Court Ruling. The story opens,

The development at 200 Amsterdam Ave. in Manhattan is slated to be the tallest building on the Upper West Side, with its 51 stories rivaling the skyscrapers located further downtown.

But whether this will ever happen has now become questionable, after a state court ruling that found city officials were wrong to follow an interpretation of city zoning law used by the developer to achieve the project’s awesome height.

Supreme Court Justice Franc Perry of Manhattan sided with local community groups looking to halt the building underway at the site. The plaintiffs—the Committee for Environmentally Sound Development and the Municipal Arts Society of New York—were joined by numerous local state and city elected officials in opposing what they say is not only an out-of-character monster development in the Manhattan neighborhood, but one that relied on a faulty zoning law interpretation to move forward.

“It is finally a declaration that zoning law means something and developers can’t make it up as they go along,” said Emery Celli Brinckerhoff & Abady name attorney Richard Emery, who represented the plaintiffs.

Since 1978, developers and city buildings officials have relied on the so-called Minkin Memo, named after the former head of the city’s Department of Buildings’ Irving Minkin, for guidance on what experts call an ambiguity in the city’s zoning law towards so-called tax lots. These are additional subdivisions of city real estate, which can overlap with or be included inside a zoning lot.

Under the Minkin memo, developers have been able to pull together extra vertical building rights that nearby property owners aren’t using, offering the opportunity to boost the size of a project such as 200 Amsterdam beyond what would normally be allowed.

“The zoning resolution is ambiguous about when a zoning lot can be formed from partial tax lot; it never deals with that problem,” said Stewart Sterk, the Mack Professor of Real Estate Law and director of the Center for Real Estate Law & Policy at the Cardozo School of Law.

Initially, city officials had no problem with the move. DOB issued a permit to the developers for a residential and community facility building at the site of the Lincoln Towers condos on the Upper West Side. The developers relied on the Minkin memo as the basis for the acquisition tax lots that combined partial and whole lots to provide the developers with the vertical building rights needed for their skyscraper.

Shortly after DOB green lighted the project, the Committee for Environmentally Sound Development challenged the DOB’s decision. The challenge snowballed, and soon seemingly every local elected official, from state Assemblyman Richard Gottfried to borough president Gale Brewer, were opposed to the plan. The project’s permit was appealed by both CESD and the Municipal Arts Society to the city’s Board of Standards and Appeals.

In March 208, DOB made an official about-face on the project. In a letter from assistant general counsel to the BSA, the department said the Minkin memo provided an incorrect interpretation and that zoning regulations did not in fact intend for zoning lots to consist of partial tax lots.

The BSA was not persuaded by the arguments and in July 2018 voted 3-1 not to grant the appeal, with one board member abstaining. The plaintiffs soon after pursued a review of the BSA’s decision in state Supreme Court.

In subjecting the developers’ permit to further review, Perry pointedly took issue with BSA view of the process.

“BSA found that the Subject Zoning lot is ‘unsubdivided,’ within the meaning of the [New York City Zoning Resolution], simply because Developer has declared it to be so,” the judge wrote.

Noting that the referenced law states that a zoning lot is defined by being “unsubdivided” within a single block, Perry said BSA’s interpretation would render the term “superfluous,” and run “afoul of elementary rules of statutory construction.”

Since DOB saw the light on the Minkin memo during the appeal process, the court said the department’s statutory basis for the issuance of the permit to begin with was undermined. BSA’s decision was nullified and vacated, and the board was directed to review the project’s permit application “in accordance with the plain language” of the zoning regulation and Perry’s order.

As Cordozo’s Sterk noted, the development at 200 Amsterdam was far from the first to use the Milkin memo to justify partial tax lot usage in a building plan. Perry’s decision has the ability to throw uncertainty around zoning and building issues into a business sector highly adverse to such things, Sterk said.

But just as important for Sterk is the question now of when a government agency becomes estopped from changing its mind after it’s already induced people to rely on its existing interpretation.

“That’s a big problem in this case, because clearly developers have put millions of dollars into this project in reliance on an existing interpretation,” he said.

Brooklyn Law School professor David Reiss, who is the research director of the school’s Center for Urban Business Entrepreneurship, said he saw the case as less of a “good guy vs. bad guy” dynamic as much as one of whether the assurances of government officials can be binding.

“There’s a reliance on government statements and government permissions,” Reiss said, while noting the project has already commenced.

Should the case stand, he predicted it would serve to rattle developers’ confidence in their dealings with the city going forward.

“It’s more uncertainty in a process that’s already pretty uncertain,” he said.

Agalarov Oligarchs Sell NYC Real Estate

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Emin Agalorov, son of Aras Agalarov

The Daily News quoted me in Oligarch family in Trump Russia dealings sells $2.8M Manhattan apartment. It opens,

The oligarch tied to President Trump’s dealings in Moscow sold a multimillion-dollar apartment in Midtown as his family’s name began to surface in the Russia investigation.

Irina Agalarova, the wife of Kremlin-connected billionaire Aras Agalarov, closed the sale of her pad on W. 52nd Street at the end of June, according to city property records.

The two-bedroom property fetched more than $2.8 million, up only $300,000 from what the Agalarovs paid for it last February.

It was not immediately clear why the wealthy family, whose patriarch rose from his roots in the former Soviet republic of Azerbaijan to become one of the biggest real estate developers in Russia, chose to sell its Manhattan digs.

The sale, which had not previously been reported, closed roughly 15 months after the apartment was purchased.

Agalarov’s connections to Trump came under scrutiny as part of the probes into alleged Moscow meddling in the 2016 election.

Property documents list the Midtown apartment contract date as May 11, as investigations into possible Kremlin collusion with the Trump campaign heated up with the firing of FBI Director James Comey.

The family’s connections to Trump go back further, however, to when Emin Agalarov, the pop-star son of Aras, featured Miss Universe in a music video.

That choice that later led to the family bringing Trump and his Miss Universe pageant to Moscow in 2013, with the then-reality TV star trotting out his catchphrase, “you’re fired,” in another of Emin’s Europop videos.

Trump and Agalarov also had discussions about creating a Trump Tower Moscow, which never materialized.

While Aras Agalarov had a passing mention in the unverified “dossier” against Trump published in January, his family was brought back into investigators’ orbit after Trump’s son-in-law, Jared Kushner, unveiled his list of foreign contacts in late June.

Those contacts included a June 2016 meeting at Trump Tower with a Russian lawyer promising dirt on the Clinton campaign that Aras Agalarov had obtained from Moscow’s top prosecutor.

Emails show that Rob Goldstone, the British publicist for Emin Agalarov, told Trump Jr. that the information was part of the Russian government’s “support for Mr. Trump.”

Trump Jr. and others have said that nothing came of the meeting, which also included Trump campaign chair Paul Manafort, Kushner, Goldstone, Russian lawyer Natalia Veselnitskaya, Russian-American lobbyist Rinat Akhmetshin, a translator and Agalarov employee Ike Kaveladze.

News of the June 2016 Trump Tower meeting sparked interest in the oligarch family’s dealings, including that Aras Agalarov had put his posh home in Bergen County, N.J., up for sale in mid-June.

Real estate website Zillow shows that the listing was removed on July 14, in the aftermath of the Trump Jr. emails.

Scott Balber, a lawyer representing the Agalarovs in the U.S., told the Daily News Wednesday that the timing was not in any way a reaction to swirling investigations in Washington.

“There is absolutely no connection between selling these two properties to anything in the news,” Balber said.

“I can assure you that Mr. Agalarov knows a lot more about real estate investment than you or I do,” he said.

In fact, the Agalarov clan’s properties in New York, which public records show include two other apartments, are just a few tacks on the map of foreign buyers gobbling up Manhattan real estate.

David Reiss, a real estate expert at Brooklyn Law School, told The News the buyers from abroad can have numerous motivations for coming to New York including “getting real estate as an asset class, taking money from their home country and bringing it abroad so it can’t be clawed back by the local government, or to have another home for family members.”

While Balber trumpeted his client’s investment acumen as a reason for the sale, Reiss said that the $300,000 gain may have actually been a loss after other fees are included, raising questions about its use as an investment.

“In the context of the Agalarovs’ portfolio this is probably a very small item so it was unlikely that this was considered a significant investment by the family,” he said.

While Reiss said there are no indications of wrongdoing on the Agalarov’s part, money laundering has become a persistent worry as multimillionaires and billionaires stash possibly ill-begotten cash in Manhattan apartments.

Urban Income Inequality

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The union-affiliated Economic Policy Institute has released a report, Income Inequality in the U.S. by State, Metropolitan Area, and County. The report finds that

The rise in inequality in the United States, which began in the late 1970s, continues in the post–Great Recession era. This rising inequality is not just a story of those in the financial sector in the greater New York City metropolitan area reaping outsized rewards from speculation in financial markets. It affects every state, and extends to the nation’s metro areas and counties, many of which are more unequal than the country as a whole. In fact, the unequal income growth since the late 1970s has pushed the top 1 percent’s share of all income above 24 percent (the 1928 national peak share) in five states, 22 metro areas, and 75 counties. It is a problem when CEOs and financial-sector executives at the commanding heights of the private economy appropriate more than their fair share of the nation’s expanding economic pie. We can fix the problem with policies that return the economy to full employment and return bargaining power to U.S. workers.

The specific findings are very interesting. They include,

  • Overall in the U.S. the top 1 percent took home 20.1 percent of all income in 2013. (4)
  • To be in the top 1 percent nationally, a family needs an income of $389,436. Twelve states, 109 metro areas, and 339 counties have thresholds above that level. (2)
  • Between 2009 and 2013, the top 1 percent captured 85.1 percent of total income growth in the United States. Over this period, the average income of the top 1 percent grew 17.4 percent, about 25 times as much as the average income of the bottom 99 percent, which grew 0.7 percent. (3)
  • Between 1979 and 2013, the top 1 percent’s share of income doubled nationally, increasing from 10 percent to 20.1 percent. (4)
  • The share of income held by the top 1 percent declined in every state but one between 1928 and 1979. (4)
  • From 1979 to 2007 the share of income held by the top 1 percent increased in every state and the District of Columbia. (4)
  • Nine states had gaps wider than the national gap. In the most unequal states—New York, Connecticut, and Wyoming—the top 1 percent earned average incomes more than 40 times those of the bottom 99 percent. (2)
  • For states the highest thresholds are in Connecticut ($659,979), the District of Columbia ($554,719), New Jersey ($547,737), Massachusetts ($539,055), and New York ($517,557). Thresholds above $1 million can be found in four metro areas (Jackson, Wyoming-Idaho; Bridgeport-Stamford-Norwalk, Connecticut; Summit Park, Utah; and Williston, North Dakota) and 12 counties. (3)

The income threshold of the top 1% for individual counties is also interesting.  For example, New York County (Manhattan) comes in second, at $1,424,582 (following Teton, WY at $2,216,883) and San Francisco County comes in 24th at $894,792. (18, Table 6)

Income inequality is a fact of life for big cities and affects so many aspects of American life — housing, healthcare, education, to name a few important ones. The Economic Policy Institute focuses on union-movement responses to income inequality, but urbanists could also consider how to respond systematically to income inequality in the design of urban systems like those for healthcare, transportation and education. If the federal government is not ready to do anything about income inequality itself, states and local governments can make some progress dealing with its consequences. That is a far better route than acting as if income inequality is just some kind unexpected aspect of modern urban life and then bemoaning its visible manifestations, such as homelessness.

 

 

Gentrification in NYC

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The NYU Furman Center released its annual State of New York City’s Housing and Neighborhoods (2015). This year’s report focused on gentrification:

“Gentrification” has become the accepted term to describe neighborhoods that start off predominantly occupied by households of relatively low socioeconomic status, and then experience an inflow of higher socioeconomic status households. The British sociologist Ruth Glass coined the term in 1964 to describe changes she encountered in formerly working-class London neighborhoods, and sociologists first began applying the term to New York City (and elsewhere) in the 1970s. Since entering the mainstream lexicon, the word “gentrification” is applied broadly and interchangeably to describe a range of neighborhood changes, including rising incomes, changing racial composition, shifting commercial activity, and displacement of original residents. (4)

The reports main findings are

  • While rents only increased modestly in the 1990s, they rose everywhere in the 2000s, most rapidly in the low-income neighborhoods surrounding central Manhattan.
  • Most neighborhoods in New York City regained the population they lost during the 1970s and 1980s, while the population in the average gentrifying neighborhood in 2010 was still 16 percent below its 1970 level.
  • One third of the housing units added in New York City from 2000 to 2010 were added in the city’s 15 gentrifying neighborhoods despite their accounting for only 26 percent of the city’s population.
  • Gentrifying neighborhoods experienced the fastest growth citywide in the number of college graduates, young adults, childless families, non-family households, and white residents between 1990 and 2010-2014. They saw increases in average household income while most other neighborhoods did not.
  • Rent burden has increased for households citywide since 2000, but particularly for low- and moderate-income households in gentrifying and non-gentrifying neighborhoods.
  • The share of recently available rental units affordable to low-income households declined sharply in gentrifying neighborhoods between 2000 and 2010-2014.
  • There was considerable variation among the SBAs [sub-borough areas] classified as gentrifying neighborhoods; for example, among the SBAs classified as gentrifying, the change in average household income between 2000 and 2010-2014 ranged from a decrease of 16 percent to an increase of 41 percent. (4)

The report provides a lot of facts for debates about gentrification that often reflect predetermined ideological viewpoints. The fact that jumped out to me was that a greater percentage of low-income households in non-gentrifying neighborhoods were rent burdened than in gentrifying neighborhoods. (14-15)

This highlights the fact that we face a very big supply problem in the NYC housing market — we need to build a lot more housing if we are going to make a serious dent in this problem. The De Blasio Administration is on board with this — the City Council needs to get on board too.

Lots more of interest in the Furman report — worth curling up with it on a rainy afternoon.

 

All The Single Ladies . . . Buy Houses

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Realtor.com quote me in More Single Women Hunt for Homes, Not Husbands. It reads, in part,

Alayna Tagariello Francis had always assumed she’d marry first, then buy a home. But when she found herself footloose, free, and definably single in her early 30s, she decided to make a clean break from tradition: She started home shopping for one.

“After dating for a long time in New York City, I really didn’t know if I was going to meet anyone,” she says. “I didn’t want to keep throwing away money on rent or fail to have an investment because I was waiting to get married.”

So in 2006, Francis bought a one-bedroom in Manhattan for $400,000—and was surprised by how good it felt to accomplish this milestone without help.

“To buy a home without a husband or boyfriend wasn’t my plan,” she says, “but it gave me an immense sense of pride.”

It’s no secret that both men and women are tying the knot later in life. A generation ago, statistics from the Census Bureau showed that men and women rushed to the altar in their early 20s; now, the median age for a first-time marriage has crept into the late 20s—and that’s if they marry at all.

The surprise is that even though today’s women still make 21% less than men, more single women than men are now choosing to charge ahead and invest in a home of their own. It’s changing the face of homeownership in America.

And while that decision to buy can help build wealth and ensure financial stability, plenty of women are finding the road from renter to owner is filled with unforeseen obstacles—and plenty of soul-searching.

*     *     *

Why women shouldn’t wait

But then again, few of us have fully operational Ouija boards we can pull out of storage to pinpoint exactly when our ideal significant other will arrive on the scene. So putting house hunting on pause is something fewer women are willing to do.

“Women today don’t sit around and wait for Prince Charming,” says Wendy Flynn, a Realtor® in College Station, TX, who has helped numerous single women buy homes. After all, Flynn points out, “The time frame for meeting your dream man, getting married, and having kids—well, that’s a pretty long timeline.” So even if you do meet The One a day after closing on your home, “you could sell your home in a few years and still make a profit—or at the worst, probably break even.” If you buy right, that is.

That said, women who do want to marry and have kids as soon as possible will want to eye their potential home purchase with that in mind. Is the new place big enough for a family? Or, if you think you’ll sell and move into a larger place once you’re hitched, how easy will it be to sell your original home—or are you allowed to rent it out?

And if you marry or a partner moves in, make sure to consult a lawyer if you want your partner to share homeownership along with you.

“You definitely should not assume that your spouse’s home is transferred automatically to you once you get married,” says David Reiss, an urban law professor at Brooklyn Law School.

Buying Into The Sexiest Real Estate

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Metropolitan Transportation Authority of the State of New York - Construction at Hudson Yards

Newsmax quoted me in How to Buy and Sell in the Sexiest of Real Estate Markets. It opens,

With the opening of the 7 subway station at 34th Street last year, more than 100 shops and 5,000 residences, the Hudson Yards neighborhood in Manhattan is creating new demand for housing.

“We’ll likely witness a progression of rising prices as the entire development grows both residentially and commercially,” said Brad Malow, licensed real estate broker with Charles Rutenberg, a real estate firm in Manhattan.

Stretching from West 30th to 34th Streets and 10th to 12th Avenues, Hudson Yards is just one example of how supply of inventory impacts pricing in the world of real estate.

“The problem right now in the sales market is that supply is not catching up fast enough to pent up demand,” Malow told Newsmax Finance. “If supply increases and demand stays the same, what usually results is lower pricing.”

The New York housing market is very different from most others in the U.S. The vacancy rate in New York has hovered at 2% on average, according to a Douglas Elliman/Miller Samuel data and new development inventory is up 101% with supply and demand fluctuating from season to season.

That makes proper pricing important to the marketing of all types of property given the extraordinarily low vacancy rate.

“The supply of new housing is very low given the size of the market and the rental market is heavily regulated, depressing the rents for many units,” said David Reiss, professor of law with the Brooklyn Law School in Brooklyn.