Aug. 9, 2016 By Hannah Wulkan
The Long Island City real estate market is dominated by rentals, with permanent homes hard to come by, according to a recent report released by a New York real estate research firm.
The report, put out by Property Shark, noted that permanent residences make up less than one fifth of the housing stock in Long Island City. Its research found that there are 990 single and two family homes in the area and 4,056 condos/co-ops.
Despite the shortage of owner occupied housing, the units are not fetching the same prices as, say, Williamsburg, which is located on the Brooklyn waterfront and also has train access.
The most expensive residential unit to be sold in Long Island City was an 1,800 square-foot condo for $3.35 million in 2014. In comparison, the most expensive unit that has sold in Williamsburg was a $5 million condo by the East River in 2015.
However, according to Eric Benaim, the founder of the Long Island City real estate company Modern Spaces, that price gap is starting to close.
“A lot of people moved to Williamsburg because it was a very hip area, but now with skyrocketing prices and the L train being shut down and the area essentially turning in to SoHo with big brand name stores, people will start shifting and coming here,” Benaim said, causing property prices to increase.
The rental market continues to get bigger as more buildings open.
There were 25,950 rental units at the time of this August 2 report, more than five times the amount of family-owned units.
Most unique about these rental properties, however, is how many low-income units are available.
The report incorporates housing complexes owned by the New York Housing Authority in Ravenswood and Queensbridge. Between these two complexes there are 5,123 subsidized housing units, making up about a fifth of all rental units available in Long Island City.
In addition, there is the affordable housing project at Hunters Point South.
Despite the growing rental market, Benaim anticipates that developers will begin to build more owner-occupied units with the neighborhood being more established.
“Usually when someone gets priced out and tries a new neighborhood they don’t buy right away, so the high percentage of rentals will bring in a lot of new people and faces who will then fall in love with the area and want to buy,” Benaim said.
He added that when the area was being developed in the past decade, many of the builders traditionally managed rentals. This led to a large disparity between rental and owner-occupied properties.
However now that land prices are going up and 421a tax breaks are disappearing, it makes more financial sense for companies to build owner-occupied units, Benaim said.
Though many of Long Island City’s residential units went up in the last decade, there are still some older properties that date back to the mid 19th century. The oldest house in the area is a small redbrick single-family house in the Hunters Point Historic District. It was built in 1861 and given landmark status in 1968.
For report, please click here