Friday, August 13, 2010

News and Views, August 13

Stats and the City
What I found particularly interesting is that while $2 today buys you what $1 got you in 1985 (a 100% inflation rate over 25 years), average apartment prices for a one bedroom co-op/condo in Manhattan have increased 185% (significantly higher than the inflation rate), the average asking rent for commercial space has increased 76% (significantly less than the inflation rate), and the average 30-year fixed rate for New York area co-op mortgages has decreased from 13.28% in 1985 to 5.13% in 2010 (which probably explains why the appreciation in co-op/condo prices has greatly outpaced inflation during this period).
Also interesting is that while the city's population increased by 1.2 million people over the 25-year period, the number of people employed only increased by 200,000 during that time. Yet the unemployment rates were 8.2% in 1985 and 9.4% in 2010. Given the large increase in population relative to the modest increase in number of people employed over the same period together with slightly disparate unemployment figures it's difficult to explain this phenomenon.
My guess is that the number of children and elderly in the city relative to those in the workforce has increased significantly during this time period.

Operating Figures for Rent Regulated Housing
The "Highlights from the first three RGB Reports" provide some very interesting statistics relating to rent regulated housing in New York. The statistics are based on 2008 data and show that the average monthly rent for all rent stabilized units was $1,012 per unit ranging from a high of $1,404 in Manhattan to $743 in the Bronx. Operating and maintenance costs averaged approximate $739 per building.
The most startling number to me, however, was the number of properties that are characterized as "distressed" (buildings that have operating and maintenance costs greater than gross income). At 12.8% (or one in every eight buildings) this is an extremely upsetting number, particularly given that this was data collected based upon 2008 results which, for the most part occurred before the economic downturn fully affected New York.
I would expect that for 2009 and 2010 this statistic will be even worse. Under no set of circumstances is it healthy for 1/8 of the rent regulated housing stock to be in distress. This is bad for landlords, the tenants who have to live in substandard conditions as a result, and the city and the state that stand to lose significant tax revenues as a result and who ultimately may become the landlord of last resort.

Alive and Well!
It's expected that the 2010 census will demonstrate the resilience and strength of our city. New York is the only large city in the Northeast and Midwest, including Philadelphia and Chicago, that has shown substantial population gains since 2000. In fact, New York City has been adding, on average, almost 1000 people a week since 2000. What's even more interesting is the characteristics of these people and what it tells us about how the city has changed during the past decade and what we can expect going forward. For more information check out Crain’s white paper on "what the 2010 census..."

Three Years of Law School and This is What We Get
A recent newspaper article headlined " Alton attorney accidentally sues himself". Can't say that I'm surprised.

Great Idea of the Week

25 Big Ideas to Change New York

No, It's Not "Stairway to Heaven" (volume 1)
Rolling Stone magazine just published their list of the 500 greatest songs of all time. I've included their list of the second through 10th. Number one will be included in my next blog posting.

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