In May 2005, the City Council passed a rezoning of 175 blocks of Williamsburg and Greenpoint that The New York Times rightfully called “the last major hurdle to the city’s most ambitious redevelopment effort in decades.” The city designed the rezoning to foster residential development, with incentives to encourage developers to build moderately priced housing.
The land rush was on.
Over the three years since, the state approved thousands of new for-sale housing units for Williamsburg and Greenpoint, mostly market-rate condos. Developers would request permission to build 1,154 new units in 2007 in the two neighborhoods, accounting for more than 20 percent of all Brooklyn requests that year, according to The Real Deal magazine. In 2006, the percentage was similar. Over half of the developments with these new units fell within the rezoning.
Is it so surprising, then, that Williamsburg and Greenpoint have had Brooklyn’s sharpest home price jumps over the past 12 months?
A Brooklyn market report last week from appraisal firm Miller Samuel and brokerage Prudential Douglas Elliman concluded that the steepest average price increases from the spring of 2007 have been in Williamsburg and Greenpoint.
And this was due “almost exclusively” to new development, according to appraiser Jonathan Miller, the report’s author. Deals in new developments made up 50.8 percent of Williamsburg and Greenpoint sales in the second quarter.
The average Williamsburg-Greenpoint sales price increased 12.7 percent annually, according to the report, which tracked closed deals for the quarter ending June 30. The average price per foot increased more than 20 percent annually (for condos specifically, the average per foot increased nearly 50 percent). Although Williamsburg and Greenpoint remain cheaper, on average, than several other neighborhoods, these annual price jumps were greater than those throughout Brooklyn.
Think about that: The average Williamsburg-Greenpoint home now costs upward of $663,946.
It wasn’t so long ago that these neighborhoods were known as the vanguard of gentrifying Brooklyn, “emerging neighborhoods” where deals could be had in abundance, close to Manhattan, if tenants and buyers were willing to sacrifice a bit of amenity and amiability. The neighborhoods were not high-end in housing or retail; their geography was simply convenient, even if the zoning then made residential living a bit creative (loft squatters) and residential development sparse.
Enter the 2005 rezoning and the development since; and now, apparently, the prices.