Luxury building boom continues in New York City

The housing market may still be somewhat sluggish throughout the country but the luxury market continues to grow in NYC:

New York City developers will spend 60 percent more on new homes this year, while adding only 22 percent more units, a sign of the market’s tilt toward luxury condominiums, the New York Building Congress said.

Spending on new housing will reach $10.9 billion, the most in records dating to 1995 and $4.1 billion more than last year’s total, the trade group said in a report released today. The number of homes that money will build is 22,500, up from 18,400 in 2013.

A record wave of ultra-luxury condo projects planned or under construction in Manhattan accounts for the “wide disparity” between costs and unit production, said Frank Sciame, chairman of the New York Building Foundation, the trade group’s philanthropic arm…

Even as construction spending increases, the number of homes produced still falls far short of the 30,000-plus built annually from 2005 to 2008, the building congress said. In 2008, the city gained 33,200 units at a cost of $5.9 billion.

This echoes the larger housing market in the United States: while the market for cheaper or more affordable homes is slow, the luxury market still has plenty of builders and buyers. And we are talking about New York City, one of the places to be for the wealthy and influential.

The article also hints that New York Mayor Bill de Blasio promised lots of affordable housing in the next ten years. Having more luxury condos doesn’t necessarily preclude also building cheaper units but the statistics above suggest overall building is down. What big-city mayor could truly turn down or fight luxury projects? Cities desperately need such money even as they need to find ways to help promote housing for more average residents.

Want a home with extra amenities? Just buy a condo with hotel services

Developers are building more condos with hotel amenities:

Developers across the U.S. are reviving a concept that collapsed with the real estate crash in 2008: combining condominiums and hotels. In cities including Miami, New York and Los Angeles, a rebounding hospitality market is joining with rising demand for luxury homes, spurring developers to construct new full-service hotels and ask premium prices for residential units associated with a high-end brand…

“I love the amenities the building will have — a restaurant that can provide room service, a concierge, maintenance, a person that can clean your place, valet parking,” said Viete, 25, who works for his family’s real estate company in Caracas. The $250 million project, scheduled to break ground in August, is already 85 percent sold…

Condo developments with a hotel can be structured in several ways. In some cases, residences may be connected to the lodging segment only so that owners can take advantage of the hotel’s amenities and benefit from the brand’s prestige. That tends to put a premium on unit prices.

In other developments, known as condo-hotels, a portion of the condos are made available to the hotel when owners aren’t using them, producing revenue for residents.

Sounds nice if you have some extra money lying around. On one hand, the story doesn’t say how much extra such units would cost over and above condos available elsewhere but on the other hand, if you have to ask, this isn’t the market for you…

Thinking about these units, they are an interesting contrast to a common American narrative about homeownership that goes something like this: you work hard to put together enough to purchase a home, you work hard to maintain it, you are more likely to participate in local community life, and it is a long-term investment and place for sentimental moments. Yet, the housing options available to those with more money goes against these principles. Instead of putting sweat equity into maintaining the home, you can pay someone else. Instead of getting deeply involved with neighbors and local issues, the wealthy can travel from house to house in exciting locations. Instead of holding onto a home because of family life and memories, housing becomes just another commodity to be bought and sold. In other words, condos with hotel features are far beyond normal American conceptions of homeownership.

Countering the suburban McMansion with the city “colossal condo”

Suburban McMansions are known for their size but there is also a recent uptick in the size of condos in New York City:

At the peak of the Manhattan real-estate boom in 2007, the average new condo—from studios to penthouses—was 1,265 square feet. Now, new condos average 1,564 square feet, a 24% increase, said Kelly Kennedy Mack, president of Corcoran Sunshine Marketing Group.

The big condos, increasingly expensive and brimming with high-end details and amenities, are being built in converted garages and walk-ups, as well as part of new, ground-up construction across much of Manhattan…

“In New York, space is the ultimate status symbol,” she said.

Developers say that they are responding to the market—strong demand by the buyers in the upper end of the 1%. The new buyers, say brokers, include international clients looking for investment-grades properties, and local families, who after years of falling crime improving quality of life, want to stay in New York to raise families, or return there when their children head off to college.

Sounds like there is plenty of real estate money in New York City, whether it is for the latest offerings from Toll Brothers, big single-family homes, or large condos. Does this mean there is a bubble coming? Or, as the article goes on to note, what about housing options for the majority of New York residents?

It would be interesting to see how critics of McMansions would respond to these larger condos. Urban dwellings are often assumed to be greener and the average size of the new condo is still a couple of thousand square feet smaller than McMansions. Yet, they are quite expensive, aren’t exactly resource-free to construct, and tend to be within the reach of only a small segment of the population. In the end, are large urban condos and penthouses preferable to suburban McMansions?

Converting American churches into housing units

More American churches are being converted into housing units:

The building is one of a number of church-to-home luxury conversions popping up around the country. As dozens of churches close or move to different quarters each year, they’re finding second lives as condo developments and townhouses.

The conversion process is growing more common as shrinking congregations and shifting demographics have made it difficult for some congregations to stay afloat financially. According to a March report from CoStar Group, a real-estate research firm, 138 church-owned properties across the country were sold by banks last year, compared with 24 three years earlier…

Architects have found creative ways to convert these historic buildings—which often have 40- or 50-foot-high ceilings, few or no interior walls and stained-glass windows—into homes and apartments that will sell for millions of dollars.

But it isn’t an easy process: Not only do the structures need intensive interior reconstruction and upgrades to meet modern building codes, but they often have been granted landmark status, further complicating renovations.

This is a good example of retrofitting. As the article notes, hundreds of churches have closed in recent years and converting the churches generally leaves the outside while making the interior reusable. One irony in this story is that I have read in recent years about growing conservative churches making use of vacant shopping structures, often big box stores, rather than building new churches or megachurches. So, in the suburbs, some churches are sacralizing profane spaces while in cities, new residents are secularizing once-sacred spaces.

It would also be interesting to hear how these new residential units were received in the communities in which they were built. The article profiles individual owners and builders but doesn’t talk much about the zoning process or reactions from neighbors. It sounds like people generally want to save the historic church buildings but there might be concerns about adding new residents. On the other hand, converting the churches means the property can be added to the tax rolls and generate revenue for the community.

Also, the examples of this article include fairly expensive condos and housing units. Has anyone turned churches into truly affordable housing? If so, the mission of the church might continue even if a congregation no longer meets there.

American housing reacts to changes in family and household structures

After looking at some data about how much American families and households have changed in recent decades, Kaid Benfield asks an interesting question about how American housing might change to meet these realities:

So, as many of us connect with families in one way or another on Thanksgiving, I can’t help but observe that there really is no “typical” American family living under the same roof these days, if there ever was.  Rather, we have a diverse and changing array of household types and circumstances that smart planners and businesses will seek to accommodate.  The census data show that the growing parts of the housing market are nonfamily households, smaller households including people living alone, unmarried couples, single-parent households with kids, and older households.  The declining parts of the market are larger families, married couples, two-parent households, and couples with only one breadwinner, though each of these categories clings to a significant share of the total.

Interesting stuff, and mostly good for those of us who would like to see less sprawl and more walkable neighborhoods.  But also a bit complex.

The typical answer I’ve seen online to this question is to point to indicators that suggest younger (see here and here) and older adults (see here) will be seeking out denser housing. This may be true. I think we could also argue that American housing has already shifted to these realities in recent decades through several new options.

1. The rise of townhouses, particularly in the suburbs. These have the advantages of allowing for single-family home ownership, the ability to pay an association to maintain the housing as well as help protect property values, and denser housing which frees up more open space.

2. The rise of condos in both suburbs in cities. In suburbs, this has similar benefits to townhouses. In cities, this has been a boon for redevelopment and the movement of people with money into urban cores.

3. New housing products for older Americans beyond group homes including developments like the Del Webb communities and retirement complexes that include owned units (whether more like condos or detached single-family units).

4. More interest in tiny houses and tiny apartments (see this latest example from San Francisco).

5. Some New Urbanist communities and neighborhoods that allow for denser housing.

Perhaps the argument here about housing is about a matter of degrees; there have been changes in American housing in recent decades but it hasn’t necessarily been mostly anti-sprawl.

Note: I’ve been following some of these trends about changing family and household composition. For example, check out these posts (here and here) about more Americans living in single-person households.

Designer parking garages in Miami

Parking garages tend not to have good reputations as they are often functional blocks of concrete that are measured by how many cars they can fit. But, Miami apparently has a number of “designer” garages including a proposed parking elevator for a new high-rise:

The $560 million Jetsonesque tower will rise in Sunny Isles Beach as part of a collaboration between Germany-based Porsche Design Group and a local developer, Gil Dezer. It likely will be the world’s first condominium complex with elevators that will take residents directly to their units while they are sitting in their cars…

Here is how it will work: After the resident pulls over and switches off the engine, a robotic arm that works much like an automatic plank will scoop up the car and put it into the elevator. Once at the desired floor, the same robotic arm will park the car, leaving the resident nearly in front of his front door. Voila, home!

The glass elevators will give residents and their guests unparalleled views of the city or of the ocean during their high-speed ride, expected to last 45 to 90 seconds…

The car elevators are the latest twist on Miami Beach’s burgeoning passion for designer parking garages. The highly acclaimed 1111 Lincoln Road designed by Swiss architects Herzog & de Meuron opened in 2009; also planned are garages by London architect Zaha Hadid, Mexico’s Enrique Norten and Miami’s own Arquitechonica.

Being able to live in a luxury condo that is greatly enhanced by parking right outside of your door sounds like a uniquely American prize. This is another reminder how American culture is dominated by the automobile.

At the same time, this could also be seen as an architectural or design issue: how can one successfully design parking garages so they are aesthetically pleasing? While these garages in Miami might be for more luxurious residences, there are other options. One option that seems to be growing in popularity is underground garages. While this is great in dense urban spaces where valuable land can’t be wasted on a separate parking structure, it can also be found in denser suburban developments where the goal is to allow condo or townhome owners to park directly below their units and to keep the garage out of sight. After all, large houses with prominent garages may be called “snout houses” in reference to the overarching emphasis on where the garage is going to be parked.

This reminds me of one of the parking decks in Naperville. The Van Buren structure features a stained glass window memorializing the “Cars of the Century.” Also, Wheaton has done a nice job of hiding their downtown garage behind more traditional looking structures.

Toll Brothers, former McMansion builder, near completion of luxury condos in NYC

During the housing boom of the 1990s and 2000s, Toll Brothers was well-known for its large homes that they often called “estate homes” and critics called “McMansions.” But now Toll Brothers is branching out into new kinds of construction, including luxury condos in New York City:

The kinder, gentler Toll Brothers are debuting new luxury condos at 205 Water Street in Dumbo next month, and to support that image, the 67-unit “modern loft” building just got a huge PR boost from a Wall Street Journal preview calling it “unerringly contextual, but also elegant, and even at some points, whimsical.” Unlike Toll Brothers’ previous, shinier attempts in Brooklyn, the seven-story scale of 205 Water fits right in with its landmarked historic district (zoning allows up to 12 stories) and the rusty steel and concrete facade by architects GreenbergFarrow takes cues from the nabe’s industrial past. Adhering to the LPC’s requirements meant constructing 205 Water out of reinforced architectural concrete, a “temperamental material rarely used anymore as the primary material in new buildings” that projects a “world-weary sort of workingman’s facade” to the street. Upper stories are clad in cor-ten steel, a lighter material also seen on the Ford Foundation headquarters in Manhattan.

I wonder if the people at Curbed are disappointed since it sounds like Toll Brothers is building fewer homes they would view as McMansions and instead built contextualized structures that fit in more urban neighborhoods that maybe could even be considered green. Could Toll Brothers turn their image around?