Looks like the Borough of Queens, the largest in area of the five boroughs, is becoming the place to reside, especially if the residential development is convenient to mass transit.
Transit-oriented developments located near Manhattan and Brooklyn are on the radar of real estate developers with roots in the metropolitan area, as well as around the world.
As reported in the “Commercial Observer” in 2014, Queens was issued the highest number of full building demolition and new building permits, according to Dept. of Buildings data. The data shows that Queens obtained 643 new building permits and 575 full building demolition permits last year. Of the new building permits issued in Queens, 190 were for commercial buildings and 453 were for residential. Of the residential buildings, a large majority of the developments are in the 80/20 program, where 80 percent of the units are rented at market rate and 20 percent are set aside for low-income households.
The combination of rising rents and record low mortgage rates has created a market for renters to seek ownership opportunities, especially in Queens. Many of the affordable units for sale in the Borough are located in apartment buildings that were converted into cooperative apartments nearly 20 years ago. Hundreds of these units are located in Flushing, Forest Hills, Kew Gardens as well as Bayside. Street Easy reported that currently a total of 298 units are available in Flusing with the median sales price of $639,000.
Developers who are fortunate to have a 421(a), property tax exemption, allowing for a phase-in of real estate taxes, are active in the development of new residential properties. According to data compiled by the Long Island City Partnership, about 518 condominium units are being planned or are under development in the neighborhood, more than three times the number built in the past two years. According to Bloomberg Business, Long Island City homes sold for an average of $1,020 per square foot in the third quarter, 21 percent more than a year earlier.
According to trade sources, if a development is convenient to the city (especially in areas like Astoria, Long Island City and Flushing) and offer the possibility of a tax abatement, developers are working hard to make the numbers work to build a condominium as opposed to a residential rental.
Looks like the signs for residential development in the Boroughs, especially in Queens.
Michael Stoler is the managing director for Madison Realty Capital and president of New York Real Estate TV LLC. He is also the host of the Stoler Report – New York’s Business Report, which airs eight times per week on CUNY TV.