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New Yorkers Fail Economics — Rob Long
It sometimes seems like the New York Times does a piece about rising real estate prices hourly. The components are almost always the same: rising prices, high demand, tight availability. (The NYT tends to see these things as distinct from each other, rather than interconnected.)
Usually, they’ll pick a “typical” New Yorker — read: a friend of a friend of the reporter — as a peg on which to hook the piece.
Last week, true to form, the NYTimes breathlessly reported that the median price for an apartment in Manhattan is now roughly $1 million, and found your basic run-of-the-mill New Yorker to illustrate the problem. From the NYTimes:
With a budget of about $1 million, Patricia Marx began looking for a two-bedroom, two-bath apartment in Manhattan last fall. She soon realized just how limited her options were.
“For a while, we were determined to acquire the large two-bedroom in the back of a building on Fifth Avenue,” said Ms. Marx, a staff writer at The New Yorker who is looking for a larger space with her boyfriend, Paul Roossin, a scientist and tech entrepreneur.
Just your typical New Yorkers. Just a staff writer at a national magazine and a tech entrepreneur who want to live on Fifth Avenue. You know, ‘mericans. Like you and me.
It gets more interesting:
Eventually, Ms. Marx went into contract on a two-bedroom, two-bath with a lovely view in the Sutton Place area that was listed for $995,000. “The apartment is a wreck,” she said, noting a crumbling bathroom, gaping holes covered with blue tarp and a vintage oven. With an impending renovation, she expects to pay at least $1.2 million in all. “I convinced myself I was dealing with play money,” said Ms. Marx, who recently listed her current home, a gracious one-bedroom corner unit on East 88th Street in Carnegie Hill for $975,000. “A million dollars to me still seems like an unfathomable amount of money.”
Got that? She’s selling her one-bedroom on East 88th for $975,000. She’s buying a two-bedroom on Sutton Place for $995,000. And the NYTimes thinks this is worth wasting newsprint over.
What stuck in my craw, of course, wasn’t the lateral — and eminently fair — transaction Ms. Marx and her tech entrepreneur boyfriend are engaged in. What bugged me was the shock she evinced at finding a rich real estate market while at the very same time benefitting from it.
She and her ilk are the equivalent of Daffy Duck, who pleads with Elmer Fudd to shoot Bugs Bunny instead of him, because, as Daffy puts it, “I’m different. Pain hurts me.”
Published in General
Well, when your city is built on an island, it shouldn’t be surprising that real estate is pricey.
“You can print money, manufacture diamonds, and people are a dime a dozen, but they’ll always need land. It’s the one thing they’re not making any more of.” – Lex Luthor
However, the last time I checked, New York City had five boroughs. Why the focus on Manhattan?
Did anyone else think a million for a two bed/two bath on 5th Ave. sounded like a steal? I thought New York was much more expensive than that. I hope the place was is terrible condition.
And of course the Times would interview a Ms. Marx.
What bugged me was the shock she evinced at finding a rich real estate market while at the very same time benefitting from it.
Well, you know. The invisible hand is, like, invisible.
Besides, how dare you put your hand on her? What are you, some kind of war on women-er?
Besides-er: if she were depending on me to buy that apartment of hers for those 975 stacks, she’d be out of luck. I don’t buy used. [sniff]
Eric Hines
Sigh. “City folk.”
Just another reason I love living in flyover country.
So how does one explain Galveston, TX? North county (League City, Friendswood) sells for more than comparable property in Galveston.
(It has more to do with the invisible hand than with hurricanes, by the way.)
You said it. I’ve visited New York City… nice place to talk about having visited. But what a God-awful place to live (or to actually visit, unless you have gobs of money to waste).
But the mentality amazes me. Even – sorry to say – among NY Ricochetti, who seem to have zero understanding of what exists outside their tiny world. Another proof for why central planning in large cities is the worst idea in the history of bad ideas.
In most of America, that million bucks can buy you a home and basically allow you to retire. Or at least never need a job more complicated than bagging groceries to make ends meet.
A million bucks for a 2-bedroom apartment? And they think they’re smarter than midwesterners?
Not too long ago my wife showed my a Buzzfeed article about European castles that were cheaper than New York Apartments*. Seriously … progressives ruin just about everything.
*I’d link the article, but Buzzfeed is a site blocked at my office.
How is that rent-control working out?
Some years ago, a friend of mine who managed housing in Manhattan brought actor Darren McGavin (best known for the playing the father in A Christmas Story) to court in an attempt to evict him from his rent controlled apartment. One of the requirements of the rent regulations was that the apartment be the tenant’s primary residence. McGavin’s defense was to claim ignorance of the law, despite the fact that he owned a brownstone in which he too was trying for evict a tenant of his for the same reason.
This is why I’ve never bought liberal solutions to housing affordability problems. Too corrupt. The root problem, ultimately, is a lack of supply, and no amount of rent control, “low-income housing units,” or other boondoggles will fix that. The only real solution is the dreaded, evil, urban sprawl that liberals hate so much, i.e. develop on more land. Increase supply.
Rob writes: “What bugged me was the shock she evinced at finding a rich real estate market while at the very same time benefitting from it.”
And that perfectly illustrates the willing blindness of Leftism. A Leftist refuses to see the cause and effect relationship of their idiocy.
I saw that article. If my memory is correct, it failed to report why Manhattan apartments are cheaper than European castles. e.g. European property taxes, stifling European regulations on renovation and development of the lands, inconvenient locations, the cost of renovation and upkeep, the cost of staff, the cost to heat the damned things, etc, etc, etc.
Your logic and factual data are ruining my comedy.
In my town, one of the big reasons we have suburban sprawl is because the liberals impose ridiculous height restrictions on new construction downtown. They claim they believe in increased density as an alternative to sprawl , but then they turn around and bitch and complain whenever a developer wants to build a condo in their neighbourhood, or whenever someone wants to develop vacant land rather than building a park. They want it both ways, and they fight development at both ends, hence driving up prices.
Reverse Vampires?
Pretty much.
It would be unfair to call Galveston the Detroit of Texas, but the two share characteristics — including a city government dominated by Democrats, and a disdain for business. Plus, like many places dominated by Democrats, it has a caste system. If you are not BOI (Born On the Island) the established hierarchy wants you to sit down, shut up, and Know Your Place.
Plus, like the Palestinians (the ones in the Middle East, not the Anderson County, TX town), the Galveston elite never miss an opportunity to miss an opportunity.
You are certainly entitled to your opinion of NYC; heck, I myself have a love/hate relationship with it. But I would suggest that your having merely visited the city doesn’t put you in the best position to judge that it is “a God-awful place to live”.
I’m not an idiot, and I lived in NYC for about 20 years and quite enjoyed it, on a modest salary by NYC standards. (I write this from an office tower on 6th Avenue, as I now commute to the city from the suburbs.)
I can also assure you that I have a pretty good “understanding of what exists outside [my] tiny world”, having spent plenty of time in “flyover country”, for which I have immense respect and would never think of bashing.
Actually one of De Blasio’s most popular campaign promises was to add several hundred acres of landfill to expand Manhattan island for more real estate development.
But . . . but . . . but! That changes the environment. The only folks that would profit are the big developers — you know the folks that want the Central Park horse stable space.
Oh wait!
Seattle is like that, too, with some of the same space constraints. I have never understood people who will spend $1 million on an 800-square-foot condo downtown.
While zoning has certainly played its part, price controls themselves limit supply. New York would have more housing within its borders if the rent regulations hadn’t encouraged the premature abandonment of existing housing and discouraged new rental units from being built.
While I’m certainly no fan of De Blasio, Manhattan landfill is nothing new. It’s been going on hundreds of years. If you walk along South Street towards the South Street Seaport, you’re walking on landfill that used to be London. Ships bringing armaments to England during World War II sailed back to New York with debris from the London blitz as ballast. That ballast was used as landfill. Battery Park City was created from the land dug up to build the foundations for the World Trade Center’s twin towers.
And people wonder why I live in South King County.
The most amusing part of all this is the blithe, oblivious way these folks think that exorbitant real estate prices are a state of nature, a given. Is it simply their way of coping with the reality that they cannot change, or are they really that provincial that, like the famous New Yorker cover, they think that the world begins & ends between the Hudson & East Rivers? At least in London they are worrying aloud about sky-high real estate costs (whether they will do something intelligent about it…); over here it’s seen as a sign of economic health & more money in real estate agents’ pockets.
Sure, everyone wants their home value to appreciate (especially after the last 7 years), but some relationship to the underlying economy would be nice.
It was? That’s the first I’m hearing of this. I guess I missed it last fall, being in a depressive stupor at the time, unwilling to accept that NYC was about to elect a communist.
You know, ‘mericans. Like you and me
Hey, Patty Marx is entitled to gripe. It’s a professional obligation. She’s a comedy writer! (Harvard Lampoon, SNL, Rugrats, and twenty humor books including the breakthrough How to Regain Your Virginity … and 99 Other Recent Discoveries about Sex.)
And in 2008, when all the markets in New York crashed, she penned this useful guide to local discounters so that the Friends of Eustace Tilly could find their way to DSW and Jack’s 99 Cent Store.
After pointing out that shopping pieces are difficult to write — so much walking around — Ms. Marx says “I hate not to complain …” but she enjoyed writing her last book.
Patricia Marx may have a lot more to complain about after leaving Carnegie Hill for that squalid dump on Sutton Place!
I can believe that. I’m not a fan of price controls; the only way to lower the price of something is to increase its supply.