Angry New Yorker

Tuesday, August 26, 2003
Good-bye Columbus Avenue

The debate about NYC as a viable city for the middle-class where the next generation can still live as well as the previous generation is over. NYC is closed to the middle-class, if you define middle-class as at least living as well as what NYC once defined as middle-class. As evidence to support this statement, consider the following:

A house, three houses up the block from my parents' house in north Flushing, near Bayside, just went on the market at the asking price of $699,000. ( That price is NOT a typo, and I'm sure the place needs a new kitchen and general updating from stem to stern. I knew the owner, a charming old lady -- Helen was her name if I recall -- who I, as a teenager, shoveled snow for and generally helped out on occassion with little errands. The house itself is an average-sized house in the area -- and even smaller than many of the houses nearby. My parents' house is of exactly the same tudor style, and was built at the same time in the '40's.

The description at the link above strikes me as stretching things a bit. Four bedrooms? Only three by my counting, unless you in fact count the basement, or an extra room was added onto the back, which as far as I know wasn't. 2.5 baths? Again, only if an extra room was added onto the back. Solar? I have no idea what that means. Den/family room? Try your basic living room off the dining room. Estimated annual taxes: $2636? Not a chance in the world after you've bought it for $699K. Add one to two thousand to that figure. But these items are mere quibbles.

My parents bought their house up the block around 1981, I think, for roughly a bit over $80,000. So, in 22 years the house has appreciated by approximately 773%, or roughly 35% a year. Now there was one very good year, back in 1993 where I did actually get a raise in salary of 35% -- but that was a unique situation -- and my salary since has never topped that glory year, and in fact, diminished. See where I'm going with this? estimates the monthly mortgage payments (with its default assumptions of a 30-year mortgage at 6.3% with a 20% down payment ) as $3,461 a month. If you spend 40% of your net salary on the mortgage (and this figure is not uncommon in NYC) you'd have to pull in about $103,000 - after taxes, or about $145,000 gross. That is NOT the average middle-class person's salary in NYC. Nor is half that. And this house is not some special case in the north Flushing area.

Here's another one, three blocks away from the one above, which in my opinion is a hideous house on a very high-traffic corner of Utopia Parkway and 33rd Avenue - MLS ID#: 1523020 - listed for $695,000. Directly opposite from this house they just tore down an amazing large house that dated back to at least the '30's, with a barn-like garage and beautiful spanish-featured architecture, and are no doubt going to slap a few square, brick-like two-family houses on the lot and sell them off to new arrivals who don't know any better and who have no sense of what is steadily being lost in the neighborhood. And yet another one on Utopia Parkway -- MLS #1506034 -- just down the block from the house above, for $675,000. That $699K price for the house on my parents' block - a much quieter and out-of-the-way block - is not a fluke.

But it raises the questions: Who has this kind of money to spend? How did they manage to amass a 20% down payment figure of $139,800 in this post 2000 stock-market bubble popping economy?

More troubling, though. In 25 years, will my children have to pay $5,137,650 for this self-same little house if prices keep going up in the area an average of 35% per year? I don't see how it's sustainable, and frankly I'd tell them they were crazy. Or worse, the monied development interests in NYC will manage to get zoning changed in the area, and then every one-family house will eventually be torn-down and a multi-family put on the lot(s). The economics are simply ineffable and ineluctable.

Which returns me to my initial statement. NYC is no longer a middle-class friendly city, unless you define middle-class down from a state of being able to afford a reasonably comfortable, detached single-family house.

Comments: Post a Comment

This page is powered by Blogger. Isn't yours?