While Manhattan and Brooklyn are usually the darlings of real estate brokers' end-of-the-year reviews and forecasts, there's a lot more to New York City than just those two boroughs. Things are percolating nicely across the East River in Queens, where developers are working on new residential projects to satisfy the demand for housing being voiced by young professionals and their growing families, new arrivals to this country, and businesses looking to spread out without breaking the bank.
Most people - both home buyers and entrepreneurs - cite the slightly-less-daunting prices in Queens as their primary reason for looking past the river and considering putting down roots somewhere other than Manhattan.
According to Norman Ellis of Ellis Group Ltd., a brokerage and development company based in Manhattan, "[Building in the boroughs] is an alternative to Manhattan prices; that's number one. I also think it's easier [to live and work] in the boroughs as well."
According to Charles Singer, director of market research for Rockrose Development Corp., the reason for so many eyes turning to Long Island City and beyond boils down to simple geography. "Well, basically there's no more room on the rock. Because of the excellent transportation facilities available in the form of the No. 7 train for instance - which is only one stop from Grand Central to Vernon Jackson and Long Island City," says Singer, "parts of Queens and Long Island are evolving into more upscale neighborhoods."
Leonard Jacobs of MPJ Realty, Inc. in Flushing agrees. "I think the activity in Queens can be attributed to the fact that people just can't afford to live in Manhattan anymore. I see a lot of young people who would have moved into Manhattan five years ago, but are now sinking their money into Queens. I see people bringing cash into Queens like we've never seen before. They're turning out these old apartments and making them new with complete renovations."
But the reasons for developing and moving to the boroughs doesn't just stop with saving a buck, according to Jacqueline Alvarado, a broker with Coldwell Banker who handles properties in Queens, Long Island, the Bronx, and Brooklyn.
"There are a lot of growing families who are looking for better education for their kids and better school districts. Over here in Bayside and Fresh Meadows, we have School District 26, and people like to buy around this neighborhood for that reason."
And according to Bill Egan, executive vice president of the Queens Chamber of Commerce, there's even more to it than lower prices and better schools. "Queens is unlike any of the other boroughs in that it is so incredibly diverse," says Egan. "Because you have such a tremendous diversity and such a mix of culture. The diversity itself becomes a magnet, and that's one of the reasons Queens is growing."
While there are some larger-scale development projects on deck in Queens, most of the newer residential projects in the planning phases or under construction are on a smaller, more human scale, says Ellis.
"The stuff that we've been seeing in the outer boroughs tends to be a lot of one- two- and three-family properties. Large development is somewhat limited by the fact that the area is so built up already. The whole Bayside area is being looked at by their City Council for a rezoning proposal right now. That's going to limit a lot of multi-family development."
According to Andrew Gerringer of Prudential Douglas Elliman Marketing Group, Queens will still see its share of new residential development in 2005.
"The East River Tennis Club and Condo Towers is going up, and will have approximately 900 units in a 1-million square-foot building. We hope to break ground by August/September and go to sale at the beginning of 2006. Basically, it's going to be two towers on the water with four buildings - three flanking either side - so the development will consist of a total of eight buildings; three on each side of the towers going back from the water towards Vernon Boulevard."
There's demand for new development in Queens, says Gerringer. "It's a value - right now, the boroughs are still an affordable alternative to Manhattan."
"As the rents in Manhattan go up," adds Singer, "people are looking for low-cost alternatives. The outer boroughs offer certain advantages that Manhattan doesn't have. For instance, less population density means cleaner air, less congestion in the streets. A little more quiet. In fact, one of the advertising slogans that we are going to use for our new Queens West project is "˜Manhattan: seen but not heard.'"
Queens West is one of the larger development projects currently underway over the East River from Manhattan.
"The Queens West project established a beachhead with the Citylights project co-op," says Singer. "That was followed up by the Avalon Riverview - both Citylights and the Riverview were built close by a rental tower, and [developers Avalon Bay Communities, Inc.] have another Riverview building under construction, or close to starting construction."
The 522-unit Citylights co-op is a majestic 42-story high-rise that was jointly designed by renowned architects Cesar Pelli & Associates and SLCE Architects in 1997. In addition to apartments, the building also houses a 350-seat public school for pre-kindergartners through fifth graders.
According to Alvarado, new development isn't limited to the areas around the waterfront. "In Fresh Meadows, there are a lot of old houses being torn down and replaced by big new houses (often referred to as "McMansions") that are going for $1 million and up," says Alvarado. "There are more single-family homes in Fresh Meadows than high-rises. For those, you need to look at Jackson Heights. A lot of people move there because they work in the city and it's less expensive to live here than there. They can take the 7 train to the city in 15 minutes."
All the new development is the logical next step in the process of urban evolution, says Singer. "Long Island City, for example, has a separate identity from the rest of Queens because it's traditionally been an industrial area. During the 1970s, industry deteriorated all across the U.S. As rents fell, it attracted artists who were seeking large spaces at low rents and the artists begat the restaurants and clubs. That brought a whole new synergy similar to what happened in areas of Manhattan years ago. Long Island City is right across the creek from Williamsburg, Brooklyn, and has a similar situation evolving."
New commercial development also has the Queens Chamber of Commerce excited. According to Egan, "One development that we are particularly excited about is the exhibition/conference center we've been trying to get developed here for some time now. We've had studies commissioned by a firm called Pinnacle, and we did a market study that showed we do have the market for such a facility here in Queens. Willets Point is the preferable site, and we hope it comes to fruition."
But widespread development and upward pricing mobility aren't always greeted with open arms by everybody touched by the changes, however. With change comes resistance; particularly from old-timers who fear getting priced out of neighborhoods they've lived in all their lives.
As for the consequences of big-ticket development for long-time residents of an area, Ellis says it's a function of the economy and New York City real estate market. "The prices are ridiculous," says Ellis, "But look, being priced out is a way of life. People need to either find a way to earn more money or you move and go further out."
Ellis also feels for the older homes in developing neighborhoods that often get torn down in the face of new construction. "For example," says Ellis, "There's one site that we were involved with on 33rd Avenue and 172 Street in Queens where there was a beautiful old house slated for demolition. It was a lovely house situated on a large lot - and now it's gone, and has been replaced by four rather large single-family homes very close to each other. Luckily, we were able to bring in one of the guys who saves the architectural pieces of old buildings to reuse as ornaments on new buildings. I don't know if you are ruining the history of Queens, when you tear down an old house, but it's certainly sad to see some of them go. It would be beautiful to come in and see some of them - but what can you do?"
"I think people are being priced out," agrees Jacobs. "I see neighborhoods that we have been involved in for 20 years completely turning over - which is not necessarily a bad thing - but I do see some of the old-timers who can't afford to live here anymore. And I also see a lot of the old-timers who never would have sold getting prices that they can't say no to. So they are getting high prices and moving."
"The other question is about price parity," Ellis continues. "Prices in Forrest Hills have skyrocketed. You are seeing townhouses now for a million and a half dollars and more. Townhouses! You are seeing the price of a good townhouse in some neighborhoods in Queens equal to Harlem. You have row houses here in Bayside that people are asking $600,000 or $700,000 for. We're never going to equal Manhattan's prices, but prices in Queens are outstanding."
Whether they're outstanding for everyone remains to be seen. "It's like Mayor Giuliani mentioned once," says Alvarado, "you can't even touch Queens. It's going to be as expensive one day as living in the city - I already see it happening slowly. You can't find places now for less than half a million in a lot of neighborhoods, and the people who live here are seeing how much they can get, and are getting out and moving to Florida."
You always have community members who have lived there a long time (especially Long Island City), who are afraid," agrees Singer. "They are used to mom-and-pop places. Some people love Starbucks opening up, and some people see it as encroachment on their lifestyle. I think people like to see reminders of the history of the neighborhood because it adds character. People don't want to live in a cookie-cutter apartment. They want to live in something beautiful and unique, and we try to be in tune with those sentiments."
Singer agrees. "We like to incorporate historical features into our projects. In the East Coast project that we're developing that will consist of seven high-rise luxury towers on the site of an old Pepsi bottling plant, we've incorporated the Pepsi sign in the project, which is an icon that Pepsi insisted on keeping - and we will accommodate them."
As for offering a long-term projection for the outer boroughs' residential development, Ellis is optimistic.
"Development in the boroughs is a different world than in Manhattan because there's not much you can develop; it's built up. Unlike Manhattan, you can't build as high and dense [in the boroughs] because of zoning. I can tell you we have plenty of clients who are scouring, looking for every piece of developable land that there is. It's just a matter of, "˜Can you find it?' and "˜Will they sell it?' "
"Queens is never going to be Park Avenue or Fifth Avenue," says Singer. "For people who want new construction with easy access to Manhattan only five minutes away, this is what they are looking for. There's also a ferry from Long Island City. Many people who work downtown are able to have one-stop access - and there's nothing like being on the water."
"Certain people are getting priced out of Manhattan," says Gerringer, "and that's why these other areas, when they start getting expensive, it makes a place like Long Island City look like an attractive area to go to. As long as you are near transportation, people have no problem moving to other areas. I think Manhattan will always be a step ahead, but the prices that are out in the boroughs will probably hit prices that are in Manhattan today, but Manhattan is Manhattan and will always be a few steps ahead."
Jacobs agrees. "I don't think it will ever be quite as desirable; people's first choice will probably always be Manhattan. But what I do see is that desirable as it may be, the majority of people won't even look at Manhattan anymore, because they know they can't afford it."
"I do think it's getting harder for young people, as prices continue to go up, to try and stay and raise a family," says Egan. "I don't see Queens becoming Manhattan, and I don't think it will match Manhattan prices. But it's a different type of community. Many more of the people who work in Queens live in Queens, and that's not true of Manhattan. The demographic will always be different - and that's a good thing."
"Development in the boroughs will continue," says Ellis, "simply because people who develop property are trying to obtain every single piece of property that is available. But the problem is, there's not much property, so development won't continue because of that. You're going to see much more multi-recycling of older buildings. Commercially, development in Queens and the outer boroughs isn't astounding, but you do have increases. You can still get $20 to $25 per-square-foot for office space, and there's a competitive market for leasing. It's not a situation where you could just open up a store on a main drag and make a lot of money just because you're there. You have to run a good business, it's very competitive, and people are very careful about how much rent they are going to pay. It's not Madison Avenue around here."
As far as the near future is concerned, says Gerringer, "We see a sunny picture right now. People are buying to live in. It's a very solid base of buyers. It's not like people are buying apartment units for investment and trying to rent them out. People want to buy to live in, which is always what you want to have as a solid base in any building."
As to where things are ultimately heading in Queens, says Jacobs, "With my co-ops and condos, an apartment could come onto the market and we'll have 15 people waiting to see it before it's even available. You don't even need to advertise anymore. I've been doing this for over 25 years, and there's always ups and downs - but I have a hard time seeing when the next down is coming, because there's still not enough housing for the number of people who want to live here."
"I see continued growth for Queens," says Egan. "I think there will be more and more development in Queens. Larger projects. If Willets Point happens, it will be tremendous. I see the Queens West development in Long Island City as a tremendously big boon to the area. A lot of this will happen in the next five years."