Make No Big Plans: The End of the Mega Project Era
Hudson Yards. Atlantic Yards. The Williamsburg waterfront. For the past decade, residential development has been defined by the creation and conversion of soaring condo towers across the city. From Extell’s Ariel twins on the Upper West Side to so many of the Financial District’s former office buildings, this was the way we built, the way we were to live. But the era of the condo project is over, according to The Journal.
Because banks will not lend, developers have lost their zest for large-scale projects. Small loans in the $25 million to $75 million range are becoming available, but with rare exceptions like the Rudins’ St. Vincent’s project, anything upwards of $500 million is nearly impossible to come by. This has left developers taking a different tack.
At least a dozen boutique projects in Manhattan and Brooklyn are now under construction or set to break ground in the coming months. At least six more are launching sales—from the Story House, an eight-unit condo in the Flatiron District, to 174 Jackson in Williamsburg, Brooklyn. [snip]
For condo buyers that means a very different product. The brand-new 40th-floor bachelor pad with sweeping views of Central Park could become rare, as developers increasingly sell the pleasures of a project’s intimacy or exclusivity.
“Buyers recognize the scarcity value of these projects,” said Joe McMillan, chief executive of DDG Partners, which received a $26 million construction loan for a brand-new roughly 40-unit condo building at 345 W. 14th St. near the Meatpacking District.
But this also means a big problem for the city. There is still a housing crunch, and while luxury condos were not going to fix that, a shortage of new units of any type still creates problems. That is part of the reason it is no cheaper renting now than it was three or four years ago, even though we’re still in the midst of one of the worst recessions in decades.
Meanwhile, developers keep dreaming up their big plans. Oldies like the Edge and Northside Piers in Williamsburg are both short one additional tower, and with units still left in the buildings and financing far away, who knows when they will do anything more than serve flea market food. As for all those unfinished sites up an down the coast, their beginning is anyone’s guess. It also leaves the Rudins and Relateds and Ratners of the city battling for what financing is out there.
New York will build big again, we always do–don’t forget the booms of the ‘80s on the Upper East Side, or the ‘30s on the Upper East Side for that matter. Still, it might not be until the 2030s we start doing it again.