June 24, 2015 By Jackie Strawbridge
Developers are continuing to build rental buildings at a rapid clip, as their interest in constructing condos in Long Island City remains tepid.
At the LIC Partnership’s second annual LIC Summit Tuesday, business owners, developers, community leaders and neighbors gathered to discuss the myriad of issues facing Long Island City including development and population growth.
Modern Spaces founder Eric Benaim, who introduced a panel addressing LIC’s residential community, said that about 95 percent of the 20,000 new housing units that are currently in construction or being planning for the neighborhood will be rental. Five percent will be condominiums.
Benaim said these numbers came from Modern Spaces and LIC Partnership data.
One developer on the panel, however, said he expects market forces to change this dynamic in the near future.
“With current land prices where they are, and current construction costs where they are, the concept of doing a rental at this point doesn’t really make sense,” Frank Monterisi of Related Companies said.
“I think going forward the proformas that work are going be the proformas where you’re selling condos at a pretty high value,” he went on, referring to developers’ profitability calculations.
According to a recent Douglas Elliman market report, Queens condo and co-op prices are rising, while rental prices sank compared to last year.
Such a shift could provide an opportunity for the City and developers to explore affordable home ownership, which some panel speakers said is vital to pulling low-income populations into the middle class.
“If we really want to consider equitable wealth building, there should not only be affordable rental living, but affordable purchase opportunities as well,” Bishop Mitchell Taylor of Urban Upbound, a nonprofit that works with public housing communities, said. “We don’t want to lose good people from our neighborhoods.”
According to John Young, director of the Department of City Planning’s Queens office, the City is examining how to make affordable condos work in Long Island City.
“Our goal when we’re coming up with our zoning recommendations [as part of an ongoing Long Island City zoning study] will be to ensure that housing, regardless of whether it’s a for sale or rental projects, will be including a portion of housing that’s affordable,” he said.
However, Young acknowledged, “ownership is a much trickier problem to solve [than rental] for long term affordability.”
“It’s tough to make affordable home ownership work,” Monterisi agreed. “How do you give a long term tax abatement to an owner? How do you stretch that far enough in the future so someone’s going to write a mortgage on that… It gets really complicated and technical.”
Speakers at the LIC Summit also contemplated pressing infrastructure needs as new housing in Long Island City continues to sprout, from transportation, to artist space and especially to schools.
One Hunters Point resident and biotech entrepreneur said that he is worried about recruiting senior employees to his company without assurance from the City that their children will have seats in neighborhood schools.
Liz Lusskin, President of the LIC Partnership, echoed these sentiments.
“The biggest recruitment issue isn’t so much about LIC as a place to work, it’s as a place to raise your children, and will there be schools,” she said.