Rent in Brooklyn Is Finally Kind of Sort of Going Down a Little Thanks to the L Train Shutdown
Nancy Wu, an economic data analyst at StreetEasy, tells us exactly how hard north Brooklyn will be hit by the shutdown.
Getty Images. Photo by Drew Angerer
In early 2019 the L train in New York City will shut down for 15 months to repair damage caused during Hurricane Sandy. Leading up to the closure, VICE will be providing relevant updates and proposals, as well as profiles of community members and businesses along the affected route in a series we're calling Tunnel Vision. Read more about the project here.
Since the L train shutdown was announced in early 2016 there has been much hand wringing over what might happen to real estate along the affected route. North Brooklyn, where the disruption would primarily impact, has some of the most sought-after properties in the world, and their raison d’ être—the L’s direct connection to Manhattan—will no longer be… well, there. A fallout was in order.
But for close to two years, not much happened. The area’s already-inflated prices just continued to grow and grow, as they have largely done citywide. Conversations of how unaffordable Brooklyn—and, really, New York writ large—had become didn’t suddenly stop; in fact, if anything, they got worse. And many speculated that the north Brooklyn climb couldn’t be stopped, not even if it lost the very thing that created it.
And then last month came the first major tangible impact from the L train shutdown on rent prices. The timing makes sense, coming right around when lease renewal agreements for after April 2019, when the shutdown is slated to begin, have arrived at renters’ doorsteps. (And as 15 weekend-long shutdowns have really started to suck.)
According to findings from StreetEasy, a real estate company that crunched its own listings data over the last two years, the number of apartments available in Williamsburg has gone up by a quarter, outpacing demand—a telling sign that many residents have started to relocate. Nearly a third of apartments have received a price cut from landlords, and another 18 percent have seen concessions offered in the form of free rent. And it’s happening across the board, not just for the ultra-lux condos that have come to define the area.
To find out more, VICE spoke with Nancy Wu, an economic data analyst at StreetEasy who authored the company’s latest report. Here’s what she had to say.
VICE: Can you just kind of give us a rundown of what's happening to real estate off the L right now?
Nancy Wu: So north Brooklyn has been the only submarket in Brooklyn so far that has had rents drop the past quarter, whereas everywhere else in Brooklyn, rents have been going up. For this study, we looked further into Brooklyn, and what's going on over there, and it looks as if the apartments that have been relisted for rent in Williamsburg the past two years, we see that almost half of those apartments have a rent decline over the past two years. Whereas the rest of the surrounding area, we don't see rents going down as much.
What about further down the L? What are we seeing in neighborhoods like Bushwick, Brownsville, and Canarsie?
The north Brooklyn we look at covers Greenpoint, Williamsburg, and East Williamsburg. And we don't see the same kinds of drops happening in the other submarkets. I think part of the reason is that when you had a transit disruption, a lot of the biggest impacts are going to be in the areas that are most closely linked to Manhattan. So a lot of people who are living in Williamsburg would take the L train to Manhattan, and are going to be much more impacted by it [not being available], whereas farther along the L, there are alternate methods of transport sometimes. In other cases, we don't see people going into Manhattan as much, or having to rely on the L train as much.
Last week, the New York Post headline read , "Hipsters are fleeing Williamsburg as the L train shutdown approaches." Do you have any sense of where those people are headed?
We haven't looked into where people are leaving yet, but it seems like a lot of people are still staying in Williamsburg. If they are leaving, there are a lot of comparable neighborhoods nearby. Just anecdotally, I know people are looking in Downtown Brooklyn, which is comparable, and lower Manhattan as well.
Related: How the L Train Shutdown Will Impact the Environment
So who does this primarily affect? Renters who live in more luxury buildings, or those who are living in non-luxury buildings?
Looking at the buildings that have an impact this time around, whereas they didn't have an impact a few months ago, a lot of the new buildings that are offering concessions or discounts to incentivize people to stay are occurring in buildings that are right along the L train stop. And it's happening in both new and old buildings alike. A lot of old buildings are seeing the same rent drops in large amounts, and high volumes.
[In a later email, StreetEasy spokeswoman Casey Roberts shared a few examples with VICE. An older building on Havemeyer Street, in Williamsburg, has seen average price drops of $325. A two-bedroom unit on Grand Street, a key thoroughfare that cuts through East Williamsburg, had dropped $450 to $1,850 in barely less than a month.]
Who's better off here then—the person who can afford $3,000 a month for a studio, or the person who's paying half of that, or less?
It's variable. From the data that we see on the average reduction in rent, the average reduction is about $250. But it is much bigger for a lot of more expensive units. A lot of the reason why the reductions are much bigger in the larger buildings with more expensive units tends to be because if they're getting a concession on a one-month free, or something like that, then that's a bigger cut to their rent, or otherwise.
Has there been any notable effect on construction in the area?
There's still a lot of new construction in Williamsburg and the surrounding areas, in both rentals and sales. Part of the reason is that a lot of sales apartments are there for a longer period of time—people take a longer-term perspective on it. So that hasn't impacted new construction as much as we would expect it to, yet.
There have recently been a few articles about the commercial impact of the shutdown, and the construction work leading up to it . We've talked about this potential effect in the past , but it seems like it may be starting. What have you seen on this end?
Our data hasn't covered the commercial side—we really only look at the residential side. But with any disruption to transit, we expect that to happen.
What should we expect to see happen with real estate in these last few months, as the shutdown nears?
For the last months going forward, we definitely expect that rents will keep going the [same] pattern. We expect to see more declines happening… From the data now, we expect that when we get to the actual shutdown period, we will see even more rent decline. Just because with any disrupt in transit, that should impact the local area, in terms of housing and rent.
That said, what advice should renters who live off the L take away from this all? What should they be doing right now?
They're in a strong negotiating power—to either ask for a discount or a concession to make up for that time that they'll be staying there. Renters should definitely negotiate.
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