Thursday, December 1 2022

The Benson

New York’s housing shortage is causing an affordability crisis, and a practice of developers building fewer units than sites allow will only compound the problem.

Zoning regulations and community reluctance to density are often seen as one of the main reasons why little progress is being made to increase supply. But a trend toward taller new buildings — but with fewer apartments — is also playing a role, reports The New York Times. The publication found several examples of new residential buildings with fewer units than they replaced, even where many more could be built in their own right.

“In a city that desperately needs housing, all kinds of housing, how can you allow a builder to build fewer units? said Gale Brewer, former Manhattan Borough President and current City Council member for the district that includes the Upper West Side. “The idea that these people can get by without building anything affordable is mind-boggling to me.”

City planners told The Times that development sites in high-density areas of the city are scarce and valuable opportunities to build more housing are being lost. For example, Naftali Group’s Upper East Side tower called The Benson was completed last year and offered 15 units priced between nearly $13 million and $35 million, all of which have found buyers. The site had pre-war buildings, and it was zoned to allow up to 83 apartments, according to the Times.

Similarly, at 15 West 96th St., the developer is building a 21-unit condominium building on a site that would allow for 66 units. At 1165 Madison Ave., there is a new 13-story building with only 11 units. The site could have had 88 units – but instead, a single apartment spans 13K SF, four stories and trades for $65 million.

As a result, in the decade to 2020, the Upper East Side lost more units than any other neighborhood, largely due to this practice, according to the Planning Department.

“It’s a very simple answer: it’s market demand,” Naftali founder Miki Naftali told The Times.

In addition to the Benson, the company is trying to build a planned 210-foot tower with 45 apartments on West 84th Street. Even though the building is three times the height of the current property, if Naftali goes ahead with the condominium, an 83-unit network will be lost.

Rents in the city have hit records this year, with Manhattan averaging $5,113 a month in July, an all-time high, and rents also broke records in Brooklyn and Queens.

In August, Manhattan’s median rent and median net effective rent were the second highest on record, ending a six-month streak of record rents. At the same time, the number of affordable housing units produced over the past year has fallen.

The Department of Housing Preservation and Development funded the creation and preservation of 16,042 units in the fiscal year beginning July 1, 2021, Crain’s New York Business reports. This marks a 45% drop from the previous year, according to the mayor’s management report.

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