Building Boom in Brooklyn Developing New York City's Most Populous Borough

For a long time, Brooklyn, the fourth largest city in the U.S. with 2.5 million people, has labored in the shadow of Manhattan; often seen as the "other borough," far away from the hustle and bustle of Midtown.

But Downtown Brooklyn happens to be the city's third largest central business district, after Midtown and Lower Manhattan. While Manhattan developers concentrate their efforts on the few remaining parcels of undeveloped land on the island, others are crossing the river and sinking their dollars into Brooklyn soil. Since the first half of 2004, Brooklyn has been receiving more applications for construction permits than Manhattan. Many parts of Brooklyn are experiencing bona fide building booms, according to Christopher Thomas, a realtor with William B. May's Brooklyn office. "After a long period of watching new residential developments go up primarily in Manhattan, there's starting to be quite a bit of development locally in Brooklyn."

According to Rachaele Raynoff, press secretary for the New York City Department of City Planning, in the Greenpoint-Williamsburg area alone, more than 8,000 residential units are planned for the very near future.

"Our department changes zoning to catalyze development," says Raynoff. "We build in incentives to help create affordable housing. We're working not only on rentals, but also with the co-op and condo market in mind."

Residential properties are being developed with commercial help to enact the area's vision and needs, Raynoff continues. In Greenpoint-Williamsburg, for example, developers plan to create access to the waterfront, which currently doesn't exist.

"There's growth everywhere," says Raynoff, "but at the same time, we're trying to protect character. Sometimes development has been too much of a good thing." Ultimately, without the character, the neighborhoods begin to become less desirable. The city planning department tries to make sure there are open areas and sidewalks, and older homes to preserve New York's great residential variety.

Brooklyn Does Downtown

Perhaps no facet of Brooklyn's development boom has gotten more attention - both in the press and from Brooklynites themselves - than the plans to develop Downtown Brooklyn, an area bounded by Tillary Street to the north, Ashland Place to the east, Atlantic Center and Schermerhorn Street to the south, and Court Street to the west. The area is diverse, dotted with a high concentration of major office buildings, regional stores, residential buildings, government offices and a number of major academic and cultural institutions.

Hatched by developer Bruce Ratner, head of Forest City Ratner Companies, with support from the Department of City Planning, the NYC Economic Development Corporation (EDC), and the Downtown Brooklyn Council (DBC), the plans for Downtown Brooklyn are being promoted as nothing short of a development renaissance, including discussion of bringing the New Jersey Nets basketball team to the neighborhood with the construction of a massive sports and entertainment complex designed by celebrated architect Frank Gehry in the heart of Downtown Brooklyn.

Ratner unveiled his plan in the fall of 2003, proposing not just to redevelop the bustling-but-shabby Downtown Brooklyn, but to expand his vision to the surrounding neighborhoods with both massive commercial and residential projects. The lynchpin of his proposal was a 21-acre, $2.5 billion mixed-use cultural, entertainment, and sports complex in the heart of Downtown Brooklyn.

The complex, located in the Brooklyn Atlantic Yards section of Downtown Brooklyn, is to be an 800,000-square-foot, 19,000-seat arena that will serve as the new home of the New Jersey Nets basketball team. The price tag for the stadium complex alone comes to a cool $435 million.

Along with the stadium complex, the development team has formulated "A new, comprehensive development plan to facilitate the continued growth of Downtown Brooklyn," that recommends a number of zoning map and zoning text changes, inclusion of new open and landscaped spaces for the public, pedestrian and transit improvements, urban renewal, street mappings and "other actions that would foster a multi-use urban environment to serve the residents, businesses, academic institutions and cultural institutions of Downtown Brooklyn and its surrounding communities."

The development group's "other actions" propose that the neighborhoods immediately surrounding the Atlantic Yards would be developed over the next decade, and would include four office towers with hundreds of thousands of feet of retail space, six parks, and 4,500 units of affordable, middle-income, and luxury housing.

The idea behind the new development plan hinges on the "if you build it, they will come" ethos. Downtown Brooklyn and the Atlantic Yards is a hotbed of activity, and the development commission aims to attract and retain major companies in the area, along with creating new retail and housing spaces which would in turn act as a catalyst to expand and enrich the area's academic and cultural facilities.

According to Chris Halliburton, executive vice president at Warburg Realty Partnership, Downtown Brooklyn is ripe for such development for a number of reasons.

"Part of the interest is because of the area's proximity to Manhattan. And really, all of Brooklyn is of interest to developers because it's a dense and populated environment and with lower interest rates and the changes in the demographics of the working society, it's caused developers to put out new product. There are people out there with more cash than they know what to do with, and a lot of them are making the decision to put it into [real estate] as opposed to stocks or bonds or any other type of semi-liquid investment."

But not everybody is as enthusiastic about the Nets' emminent arrival as the developers working to bring them here.

"The arrival of big developers like Bruce Ratner and the possibility of the Nets coming in is going to have a significant change on the downtown area and the areas that are going further east, like Bedford-Stuyvesant and Bushwick," says Halliburton. "They're going to have a great effect on them - but a lot of people are not happy [about the plans to bring the Nets to Brooklyn]. People who moved here 30 years ago are saying, "˜I moved here because I liked the character of the area the way it was when I came, and now it's changing.' "

Is Brooklyn Better?

The reasons for all the keen interest in Brooklyn are multiple: for buyers, you can often get more for your money than would be possible in Manhattan's current climate, and Brooklyn also trades heavily on its reputation as a cradle of creativity and the arts.

According to Chris Havens, leasing director of Two Trees Management, a brokerage and management company that was among the first to market DUMBO as an alternative to Manhattan's SoHo, "I've been told that 70 percent of the registered architects in New York live in Kings County. More important than that - and what drives my commercial real estate business - is that the three counties in the nation that have the most creative professionals, like writers, software people, painters, the whole range of creative professions, are probably L.A. county, Manhattan County, and Kings County. Here in Kings County, that's really what drives it as a place to live."

"And Manhattan has gotten ridiculous," Havens continues. "You spend $375,000 for a 750-square-foot 1960s apartment building with leaky central air systems."

For developers interested in getting new projects off the ground, outside the economic and political pressure-cooker of Manhattan, costs for both administrative tasks and actual construction may be slightly less, and parts of Brooklyn offer more space in which to build - sometimes.

"In certain situations it's more affordable," says Halliburton, "but also I believe last Sunday's Times announced that a townhouse was sold in Brooklyn Heights for $8.5 million, which rivals any townhouse sale in Manhattan. There are parts of Brooklyn - like Columbia Heights area and the Brooklyn Heights area - that have beautiful buildings and great views," making those properties every bit as attractive to some buyers as comparable ones in Manhattan.

Brooklyn has certainly been a fertile ground to work in, according to Tamar Kisilevitz, project manager and director of marketing for the borough-based Scarano Architects PLLC.

Two major trends, she says, are of course, new construction, and secondly, adaptive reuse of old, existing buildings. "We converted The Arches at Cobble Hill - it's the conversion of a church - into 60 luxury condos. We're working on another project right now on Cumberland Avenue - that's the same type of project. We converted an armory on Clermont in Clinton Hill's Historic District into 110 apartments, and a lot of the factory buildings around us in Vinegar Hill and DUMBO and Downtown Brooklyn."

Another project for which the company received a design award was the conversion of a 1920's toy factory on Johnson Street in Downtown Brooklyn into 56 new condominium units. "The Toy Factory Lofts - that one really was a precedent. That really shows a trend," according to Kisilevitz, "because it's the first building that was a manufacturing building in a manufacturing district that was approved by the Board of Standards and Appeals to be residential. So it is the first residential building in the manufacturing portion of Downtown Brooklyn."

And that approval has led to more of the same, she adds. "We're seeing more of the old warehouses here - since the river's not used the same way it used to be used - all these warehouses are abandoned and they all have these spectacular Manhattan views and Brooklyn views. They're very fun for us to work with and they're very profitable for developers because it's a building that's already there and you don't have to invest in the structure."

Kisilevitz estimates that her company alone will be developing in excess of 10,000 new units over the next several years. "We must have about 300 projects in the works right now in our office - 99 percent of our work is residential and of that, about 80 percent is condos."

The September 11, 2001 terrorist attacks, which resulted in an influx of new business to the borough, and Brooklyn's rezoning have played a major role in this building boom, Kisilevitz says. Another factor is foresight in envisioning future development. "It used to be that a developer in order to be successful had to have the vision to foresee the success of a certain area," she explains. "For example, David Walentas' [Two Trees Management] in DUMBO, where he bought all the buildings for $6-a-square-foot. Now they're getting sold for $1,000-a-square-foot, that's vision because in the "˜70s no one would have dreamed of living on the river in an old factory."

Certain sections of Brooklyn, that previously were the domain of the immigrant population, are now very posh, she says, a factor, which is changing the area's demographic. "The idea of selling a 600-square-foot apartment on South Second Street in East Williamsburg for $650-a-square-foot would have been a joke four years ago. But it happened and it will continue to happen."

From the developer's perspective, it also often takes less time to get a project from conception to completion in some parts of Brooklyn, according to Ilyse Fink, a spokesperson for the Buildings Department.

"The average time for Brooklyn project evaluations is shorter than Manhattan requests, and speedier than in the Bronx. It takes an average of 10 days for a new building plan to be filed, data entered, assigned to plan review and examined in Brooklyn."

Whether that will be true as the year wears on into 2006 remains to be seen. According to some, it's getting to be just as hard to secure building permits and file paperwork in Brooklyn as it ever was in Manhattan. Ironically, it's because of the building boom in Brooklyn that a lot of buildings are getting held up, instead of built up.

In an article appearing earlier this year in The Real Deal, architect Karl Fischer points out that the development community in Brooklyn may be a victim of its own success.

"Brooklyn has too many projects and too few staff," he said, and added that the Department of Buildings is simply "overloaded with work," making it difficult to make appointments with the plan examiners. The building department's workload in the borough has tripled over the past five years without a corresponding increase in people and resources. The infrastructure in place at the department "hasn't got a fair shot" at handling the larger workload, he says.

"There's a direct correlation between the volume of work that's coming to the desks of these plan examiners and their ability to turn out and approve plans," he said. "It's simply untenable to maintain the same schedule and the same turnaround time for three or five times the business."

Hot Spots

Along with all the big plans for Downtown Brooklyn, the borough's other neighborhoods are abuzz with activity as well. DUMBO (Down Under the Manhattan Bridge Overpass) continues to be a hot area, as well as Brooklyn Heights, Cobble Hill, and Carroll Gardens.

"There's a lot going on," says Thomas, "and it's a lot relative to what the density of available residential properties has been. A couple of years ago, there were essentially only two buildings in DUMBO in which you could legally reside. Since then, that number has tripled. Over the next two years, you're probably going to see that number double again just in terms of future contemplated buildings in that area. The demand in these areas has been very strong."

According to Havens, the DUMBO area alone is in line to get a 1,000 units over the next five years, half of that within the next two or three. "There are three projects going on between the bridges and one big project east of the bridge," says Havens, "because there are a lot of places to build. There's vacant land and buildings people could tear down, so there's been a lot of opportunity."

And opportunities exist even in once unthinkable locations. Beacon Towers, a 79-unit residential condominium being developed by Brooklyn-based Leviev Boymelgreen is a 23-story high-rise that is going up literally within earshot of the Brooklyn Bridge. It is so close, in fact, that the architect and developers are planning to install soundproofed windows and other acoustical measures to mitigate the traffic noise associated with the bridge and nearby subway trains.

According to Halliburton, DUMBO isn't the only area getting a lot of attention from developers and apartment-seekers.

"There's a triangle between Williamsburg-Bushwick-Bed Stuy-Clinton Hill. I can't even tell you how many new buildings are being put up there. Some of them are being developed for the expanding Hasidic community in Williamsburg, though most are for the general population. There are easily 15 new buildings in the works, if not more."

"Greenpoint is almost impossible to buy into on word-of-mouth because it's so hot," says Havens. "The Bedford-Stuyvesant area is also very hot, because it has the most affordable houses closest to Manhattan and Downtown Brooklyn."

"There's also the Schaefer Landing project in Williamsburg," Halliburton continues. "It's right on the water, and it's an extremely interesting project because of the way it's structured." Halliburton says he understands that the project is being marketed to the Hasidic community, middle-income tenants, and market-rate buyers alike. "It's a fantastic location," says Halliburton of Schaefer Landing. "The views across the East River are just tremendous.

"There's also a property in Fort Greene in the final stages," Halliburton continues. "It's about 14 stories, brand-new construction, top-of-the line appliances at a very high price points. It's certainly the largest condominium building in that neighborhood."

And don't forget Red Hook, says Thomas. The cobblestoned area that was one home to light industry (and organized crime) and cut off from its early days of prosperity by the construction of the Gowanus Expressway in 1946 is rebounding in a big way. Artists and some pioneering families have discovered the area, and several big-time retailers have signed major leases, or will be soon.

"IKEA is there," says Thomas, "and a Fresh Fields [grocer] is coming, too. I believe that will alter the character of the neighborhood dramatically, for better or worse. It will certainly increase the traffic, and the city will most likely adapt to make getting out there easier."

"[Red Hook] is the next big thing - it really is," says Thomas. "Like Tribeca in the late 1980s, or Hoboken in the "˜70s, or like DUMBO exploded in the last few years. You've got some really great 19th century architecture in the housing stock, and the Brooklyn waterfront in Red Hook is some of the best of all neighborhoods anywhere. There's a great deal of playground and park area in Red Hook, too, and that's a big draw for people and families, especially."

As for the kind of buildings being erected in Brooklyn's expanding residential neighborhoods, brokers and developers say they're mostly either condominiums or what's referred to as "home clusters;" two-family or three-family townhomes built in a continuous strip. Most of them are being built in Bed-Stuy and in some parts of the Williamsburg and Bushwick areas.

"A developer will work on projects with the city where the city owns the land," explains Halliburton. "The mandate is to make affordable housing, so they'll make two- or three-family houses that the owner can afford because he's able to generate income from the second or third family."

Halliburton says that these buildings are being put up on previously vacant lots or by developers who have purchased several continuous frame houses - none of them architecturally significant, in the interest of preserving the neighborhoods historic sites - knocked them down, and built up blocks of townhomes and mid-rise apartment buildings.

The New Brooklynites

And who's moving into all these new developments and purchasing apartments at near-Manhattan prices? According to Brooklyn brokers, it's not the empty nesters that one sees in Manhattan, moving downtown for a piece of the fast-paced city life. According to Halliburton, "I find it's singles, cohabiting couples and young married couples. And they're looking for one of three things: space, value and being in a less-dense environment that's still just half an hour from work."

And like its sister boroughs, Brooklyn prices have been creeping up a well. According to The Corcoran Report's Brooklyn Snapshot, "2004 was another banner year in the Brooklyn real estate market, as the borough solidified its emergence as New York City's premier locale for young urban professionals and families seeking luxurious yet affordable property, particularly new development."

Marketwide, co-op prices "rose a robust 19 percent, while condos fueled by new state-of-the-art developments, increased in price by an average of 33 percent," according to the report. Average co-op sales prices jumped from $349,000 in 2003 to $417,000 at year-end 2004; and the average sales price for condos went from $442,000 in 2003 to $586,000 at the close of 2004. Studio co-ops jumped 17 percent from $162,000 to $189,000; two bedrooms, $418,000 to $519,000; and three bedrooms, $741,000 to $937,000, Corcoran says. In Brooklyn Heights alone, prices ranged from $445,000 for a one-bedroom co-op to $1.35 million for a three-bedroom, an increase of 49 percent from 2003. Condo prices jumped an average of 20 percent: topping out at $513,000 for the average unit, and townhouses came in at close to $2.3 million.

While this evolving demographic spells good news for brokers and some sellers, it - along with the looming stadium development downtown - has some neighborhood old-timers a little put out; both out of fear of losing the borough's low-profile architectural charm, as well as the possibility of being priced out of neighborhoods that haven't changed much in the last few decades.

Developers are trying to be sensitive to some of those concerns, says Halliburton. "There's concern about maintaining the architectural integrity of certain neighborhoods," he says, "And there's concern about the gentrification of certain neighborhoods. In any situation like this, there are going to be people who are happy about what's going on, and there will be others who don't like it. Some neighborhoods that have been ignored in the past are now getting attention from developers - and therefore buyers, and therefore new residents. There are a lot of longtime residents of these neighborhoods who appreciate that these new residents are coming to the neighborhood and occupying space that was maybe vacant before that were dangerous, or that attracted unsavory types. For as many people who complain about gentrification and say that they're losing this or that, there are also people who have been living there for 40 years who are saying, "˜Thank God there are people living next door to me - I feel safer.'"

The Long View

So with the development of Downtown Brooklyn and the ever-expanding array of desirable neighborhoods, new development, and new residents, what does the future hold for the fourth-largest metropolitan area of the country?

"I don't see it ever becoming as expensive as Manhattan," says Halliburton. "There are certain areas that will be very expensive, like Brooklyn Heights and Park Slope that will continue to mature. And Fort Greene is an area that will probably, in my opinion, become one of the most expensive neighborhoods, because unlike Brooklyn Heights and Park Slope, you're not surrounded by that immediate commercial concentration. So it becomes more of a residential oasis, and therefore more desirable."

And there's no doubt that as development and population growth continue apace, Brooklyn will continue to evolve and change. So in light of all that, is now the time to make the move to Brooklyn?

"I guess it is and it isn't," says Havens. "If everybody's buying, then it's a good time but it's also hard. There's been shortage of apartments for sale for seven or eight years. The co-op market has never been tighter in the whole history of co-ops. It's basically a numbers game: people want to buy something from $300,000 to $700,000, and that's tough in Manhattan unless it's a studio. So you can get more for you money, and it's a good place to live. There are even people from Manhattan who spend a lot of their time in Brooklyn now."

Hannah Fons is the associate editor of The Cooperator. Freelance writer Anthony Stoeckert also contributed to this article.

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  • And wait to they travel south of Prospect Park, and get views of the gorgeous bays and Atlantic Ocean that cradles the southern areas of the borough. The areas like Bay Ridge, Bensonhurst, Flatbush, and Sheepshead Bay, where the overwhelming majority of Brooklyn's world famous talent grew up...Then the boom will really take off because the sun shines no better than in those parts of that beautiful borough!
  • I am a 49 year old Brooklynite....was born of Italian and Puerto Ricen parants in 1961. I have seen many changes in Brooklyn.....back in the day when Flatbush and Norstun had many Movie Houses in beatiful buildings...the neighborhoods were all nice families that new was could leave your windows and doors open....Can you imagine?.....Ive seen it be replaced with more rats and roaches than people.....Dogs being thrown out of the windows with the garbage.....I am so happy I could cry.....I want to see the kids today see how wonderful Brooklyn was and could be again.....Unfortately I no longer live in Brooklyn but I have always love my home....and would love to move back home again someday....