PITTSBURGH | Development Rundown II

[Private Dick]

^ Maybe because he is an egomaniacal wannabe-playboy who blows through daddy's money and put SSW in a financial mess.

[BrianTH]

Originally Posted by bruchaus

10-15 years ago there was a TON of housing available in Williamsburg but yuppies didn't want to live there and had no demand for the housing.

I think it is important to note that in those 10-15 years, NYC has continued to have very high rates of growth in the higher-income brackets. In other words, there are many more "yuppies" in NYC than there were 10-15 years ago, and more all the time. It is that underlying growth in the number of "yuppies" that explains why "yuppies" have spread into many more areas of Manhattan and Brooklyn and so on during that time period. Exactly where they end up increasing in numbers at any given moment may depend in part on what has recently been built, but the overall spread of that population is being determined on a city-wide basis.

but new construction all over this city seems to only benefit the wealthy because the new construction is all luxury buildings. If they built some buildings and charged $1500/month rather than $4000 you'd have a much more diverse population moving in. They don't want that though.

Developers will build whatever they can make the most profit on. In a situation where their overall rate of building is constrained and there are a growing number of higher-income people looking for new housing, that market segment will be the first served because providing premium-priced units to that market segment is how the developers will make the most money. If that market was instead fully supplied and developers could still build more units, they would in fact keeping moving farther down the market segments until they stopped just above the cost of providing basic new units (below that and they can no longer profit).

Now reaching that price level wouldn't do much good for the lowest-income people, meaning those who can't afford market-rate units even at that price. But the sort of middle-income people who could afford such units but can't actually find them in the market are the ones being most ill-served by the current constraints on new units.

[bruchaus]

Originally Posted by BrianTH

But the sort of middle-income people who could afford such units but can't actually find them in the market are the ones being most ill-served by the current constraints on new units.

I agree 100% with this but it isn't constraints that make the housing unaffordable, it is the developers desire to build whatever will bring them the most profit. My wife and I make around $110,000 a year combined. We aren't rich, but we certainly aren't poor either. It is difficult finding middle class housing in this city that is worth it. We could pay $1800 for an apartment but it would be 400-500 sq ft. We are currently in a 900 sq/ft 1 BR and pay $2450. When moved in it was $2150, a "deal". We will be leaving the city soon because 1) we want to own and not pay $400,000 for 400 squares. 2)We can't save living here. We spend nearly 40% of our income on housing.

New York City is becoming a playground for the wealthy. Middle-class existence is threatened daily in this city. I love living here but crap like that Greenpoint Landing project is going to encourage a lot of people to move out of the city. It sounds drastic but I know plenty of people with the same attitude who live in Greenpoint. It is time to get out of this city. I'm coming home to Pittsburgh soon.

[Private Dick]

Applying the theories of supply and demand as providing the governing structure to the NYC real estate market is a tough exercise, as the "rules" have taken on such a pliability there that actuality proves them almost meaningless.

[BrianTH]

Originally Posted by bruchaus

I agree 100% with this but it isn't constraints that make the housing unaffordable, it is the developers desire to build whatever will bring them the most profit.

Those aren't two different explanations, they are two parts of one explanation. If they could, developers would build everything that would bring them a profit, including middle-income units. But if they can only build an artificially constrained number of units, they will only build the most profitable units, which is units for the highest-income segment.

What you really can't expect is to constrain the number of units developers can build, then have them build those units for a less profitable market segment than the most profitable market segment available.

By the way, it might be worth looking at some numbers. Comparing NYC 2011 3-year ACS to the 2000 Census long form, number of households in a given higher-income bracket:

$75K-99.9K went from 274K to 354K
$100K-149.9k went from 236K to 364K
$150K-199.9K went from 76K to 158K
$200K+ went from 104K to 206K

Even accounting for inflation, that is a huge growth in higher-income households, including an effective doubling from $150K+.

By the way, none of this is meant to suggest the housing situation is not dire in NYC for middle-income households. But it really isn't about developers suddenly deciding they don't like middle-income people. And it really is about the number of new units not being able to keep up with the explosive growth in higher-income households.

In short, if your playground is very desirable AND you only let in a few people at a time based on their ability to pay rent, then of course it will eventually become a playground for the wealthy. If you instead want less wealthy people to also use the playground, you will need to let in more people.

[BrianTH]

Originally Posted by Private Dick

Applying the theories of supply and demand as providing the governing structure to the NYC real estate market is a tough exercise, as the "rules" have taken on such a pliability there that actuality proves them almost meaningless.

Eh, the details don't really matter all that much at the end of the day for the sort of conversation we are having.

Admittedly there are a gazillion different ways in NYC to try to stop, slow down, or trim new development plans, and a corresponding gazillion different ways for developers to try to get their projects done in some form, on some schedule, anyway. So in any given case, predicting in advance how this will all play out may be difficult (at least for outsiders).

But for the purposes of applying the basic logic of supply and demand to observable housing price trends, we don't need to track individual projects, but instead just have to have some overall sense of whether the supply response to the known demand increase is being slowed down. And in NYC, there is really every reason to believe that on aggregate basis that basic proposition is true.

[bruchaus]

I suppose my only argument in this whole discussion, which I feel has been really good, is that in NYC more housing doesn't always result in lower rents.

[BrianTH]

Originally Posted by bruchaus

I suppose my only argument in this whole discussion, which I feel has been really good, is that in NYC more housing doesn't always result in lower rents.

Indeed, but the counterpoint is that not enough new housing will ultimately result in even higher rents than you would otherwise see. Constrained supply in that sense is not the fundamental cause of housing price increases--increased demand is the fundamental cause--but constrained supply makes those price increases much worse than they could be in a relatively unconstrained supply environment.

If you didn't want rents to increase at all, anywhere in NYC, you would have to stop NYC from being a place where more and more people each year can make higher incomes. And that is not really possible to achieve through housing policy, nor should we want it to happen anyway.

[glowrock]

Originally Posted by BrianTH

Yes, it is.

As we have walked through before, unless you are going to exercise Kelo-style eminent domain, we are stuck with Buncher as the land owner.

That means if you can't work out a mutually-acceptable deal on developing this land with Buncher, it will remain fallow, which is far worse than doing something good but not perfect.

Fortunately, if you are willing to read past the headlines and some of the more sensational criticism, there is actually a lot of potential in the Buncher plan. As I keep pointing out, the plan actually allows for those residential buildings to be up to 15 stories high, and some of the other buildings to be up to 20 stories high.

That would be a very good use of that land in my opinion. So rather than carping about extremely small-ball stuff like non-resident car access on the side streets, if you really care about these issues you should be thinking about how to get Buncher to do something at or close to the high end of what the plan allows.

+1 to everything you just posted here, BrianTH.

Aaron (Glowrock)

[Evergrey]

Originally Posted by bruchaus

It is time to get out of this city. I'm coming home to Pittsburgh soon.

Welcome back! You'll find plenty of opportunity to harness your positive energies here.

[bruchaus]

Originally Posted by Evergrey

Welcome back! You'll find plenty of opportunity to harness your positive energies here.

I sense some sarcasm here, but I'll take what I can get! I miss Pittsburgh.

[George Woods]

Guys, for years this forum has been a fun place to turn to for Pittsburgh development news that we might otherwise not hear of or have time to look for in the media. Lately, there's a lot of hostility and bloviating over fairly inconsequential shit. Can we maybe rein it in a little? There's a lot of great stuff happening in Pittsburgh nowadays. Let's just talk about how excited we all are to see it. And to anyone who lives elsewhere, but misses Pittsburgh enough to keep checking here for updates, and who contemplates moving back, I say, sincerely, welcome back.

[bruchaus]

Originally Posted by Austinlee

Why do you use the the derogative term YUPPIES so much? Do you feel that Y.oung U.rban P.Professionals are out of place in our nations and the worlds biggiest cities? Also, you seem to like to bring up the Hipsters alot as well with a nice tint of distain in your words. So artistic bohemian people and their darn coffee houses and art collectives moved in but then the horrible prospect of educated young adults were willing to pay more for newer, nicer digs (which is such a terrible thing) that they hurt the also annoying class of hispters who homogenize an area with their damn free thinking and bold style choices. Who exactly are you rooting for?
Also, quick question - (2 part): a. Why are you moving back to Pittsburgh you intelligent young marxist? and b. If we take up a collection can we keep you in Brooklyn for uhh, continued socio-economic commentary 101 that you seem to be abreast of?

I don't like what happens to established communities when rich folk move in and build organic homemade pet food businesses and polynesian breast milk stores. Most of my argument above has been defending the long-established Polish community that will be hurt by the creation of that abomination.

If you think I'm "rooting" for one particular class over another you are wrong. I just want to see people have a shot at affordable living in a neighborhood that isn't on the edge of the city, or that they can afford to stay in a neighborhood once its socio-economic make up changes.

Also, just because I oppose a project in Brooklyn from a NIMBY point of view doesn't mean I would do that in Pittsburgh. The cities are very different and have incredibly different circumstances surrounding them. But I think god that there were NIMBYs like Jane Jacobs who opposed things like LoMax in the 1960s so a huge portion of lower Manhattan wasn't decimated in the name of progress. Not all growth is good.

I don't appreciate the condescension I experience when I post here sometimes. I may oppose things based on their looks (my biggest complaint most of the time) but almost never because of negative consequences for the city.

But I will agree I'm a generally negative person. Hell, bruchaus is a portmanteau of two German words meant to mean "to break a house". A forum about development may not be the best place for a guy who is not 100% about growth. But I love following what is going on in my home town and I think that 99% of the development in Pittsburgh is great. I love to see the city flourish because I love Pittsburgh. I try to be polite most of the time, maybe I've crossed a line in the past. I doubt it. I don't make personal insults at people. I've followed the decorum of the forum. I want an open debate where I don't get told to stay out of Pittsburgh through some veiled insults and smart ass remarks.

Also, thank you George for understanding my presence on this forum.

[glowrock]

Austinlee, I'm going to say this only one time: Cut the crap, please. Thank you.

Aaron (Glowrock)

[Austinlee]

Originally Posted by George Woods

Guys, for years this forum has been a fun place to turn to for Pittsburgh development news that we might otherwise not hear of or have time to look for in the media. Lately, there's a lot of hostility and bloviating over fairly inconsequential shit. Can we maybe rein it in a little? There's a lot of great stuff happening in Pittsburgh nowadays. Let's just talk about how excited we all are to see it. And to anyone who lives elsewhere, but misses Pittsburgh enough to keep checking here for updates, and who contemplates moving back, I say, sincerely, welcome back.

George, I have many many great conversations (mostly in real life but also on the online forum world) with people excited about the city and with ever expanding ideas and developments that make me proud. That would explain why I have close to 10,000 posts on this site alone, mainly related to Pgh but also discussing many other great cities and topics; I also have around 3,000 posts archived on two different cutting Pgh cutting edge music forums discussing the evolving music and arts scene in the burgh.

That's why when certain people who only CHIME IN with disparagaing remarks about Pittsburgh being stuck in the past or how much better their new adoptive city is I get upset that nothing constructive is being said. Rather that let forumers get away with such a waste of drivel I like to call people out to shame them into talking less. That is what you just witnessed with the ubiquitious pessimistic/negative world view bruchaus has which really gets under my skin. Even when he tries to be constructive he comes across as ignorant on many issues. You can't win: If people do well locally and become wealthy they are the dreaded YUPPIES gentrifiying neighborhoods and pushing out the poor defenseless hispters for example. Which ironically enough (which also happens to be the ultimate compliment in that lifestyle) always seems to be disparaged as well. And of course then there's the other city dwellers such as the "horrible government", the "brutal police", the poor, welfare ghetto gangs or just the middle class uneducated yinzers. Can we ever have a talk about this city without every single socio-economic group being vilified?
Recently myself and two other prominent Pittsburgh forumers were at my house discussing some of the more productive members of this subforum and Pgh knowledge. Bruchaus was a topic of discussion for his relatively consistent pessimistic views of everything. We had a chuckle.

I am always willing to back up my remarks with reasons on why I would have the "gall" to bring up certain topics in the first place. These are some of the reasons.

And George Woods: We would love to have you join in on more discussions as well considering you have contributed 43 posts in 4 yrs and I literally spend 5 hours a day on this site reading and learning.

[glowrock]

Originally Posted by George Woods

Guys, for years this forum has been a fun place to turn to for Pittsburgh development news that we might otherwise not hear of or have time to look for in the media. Lately, there's a lot of hostility and bloviating over fairly inconsequential shit. Can we maybe rein it in a little? There's a lot of great stuff happening in Pittsburgh nowadays. Let's just talk about how excited we all are to see it. And to anyone who lives elsewhere, but misses Pittsburgh enough to keep checking here for updates, and who contemplates moving back, I say, sincerely, welcome back.

Agreed on all counts, George Woods.

Aaron (Glowrock)

[Austinlee]

Originally Posted by bruchaus

I don't appreciate the condescension I experience when I post here sometimes. I may oppose things based on their looks (my biggest complaint most of the time) but almost never because of negative consequences for the city.

But I will agree I'm a generally negative person. Hell, bruchaus is a portmanteau of two German words meant to mean "to break a house". A forum about development may not be the best place for a guy who is not 100% about growth. But I love following what is going on in my home town and I think that 99% of the development in Pittsburgh is great. I love to see the city flourish because I love Pittsburgh. I try to be polite most of the time, maybe I've crossed a line in the past. I doubt it. I don't make personal insults at people. I've followed the decorum of the forum. I want an open debate where I don't get told to stay out of Pittsburgh through some veiled insults and smart ass remarks.

Originally Posted by glowrock

Austinlee, I'm going to say this only one time: Cut the crap, please. Thank you.

Aaron (Glowrock)

Aaron, my main point was not a personal attack but that he generally a pessimist. And he politely confirmed it in his rebuttal. No need to delete posts or anything.

Discussions... Moving on....

[Austinlee]

Originally Posted by glowrock

Austinlee, I'm going to say this only one time: Cut the crap, please. Thank you.

Aaron (Glowrock)

[bruchaus]

I'm flattered that despite posting here so infrequently I'm still a topic of conversation in your real life.

[Private Dick]

Originally Posted by bruchaus

polynesian breast milk

Mmmmm... my favorite type