For Brooklynites Cheering the L Train, Price Is Higher Rents
For Brooklynites Cheering the L Train, the Price Is Higher Rents
(Bloomberg) -- Brooklynites thrilled that the L train won’t be shutting down after all are about to discover the trade-off: They just lost their power to negotiate sweet apartment deals.
Some renters have already locked in lower rents as the prospect of a 15-month commuting nightmare forced landlords in some neighborhoods -- particularly Williamsburg -- to drop their prices and offer concessions to get their units filled. But now that trains will be running into Manhattan, those same landlords may get the upper hand again.
“I think we’re going to see a turnaround in the Brooklyn market starting today,” said Grant Long, senior economist at New York listings website StreetEasy said by phone Thursday, after the shutdown was called off. “For renters who signed leases in the last few months, those renters lucked out.”
While some commuters have fled to areas with more-reliable transit, those who stuck it out in Williamsburg and nearby Greenpoint were rewarded with cheaper rents. Leasing costs across north Brooklyn, including the two neighborhoods, are down 1.5 percent since April 2016, when plans for repairs that would close the L train tunnel into Manhattan were first announced, according to StreetEasy. That contrasts with a 3.3 percent increase for Brooklyn as a whole.
Thanks to advances in rail technology and materials, the L line will continue running between the boroughs during construction, Governor Andrew Cuomo announced on Thursday. The Metropolitan Transportation Authority had planned to close the tunnel for 15 months starting in April to fix damage from Hurricane Sandy.
Some Williamsburg landlords have already put a hold on deal perks. David Maundrell, a Citi Habitats broker for new developments in Brooklyn and Queens, said that unless prospective tenants had already paid their security deposit earlier in week, incentives to sign, like getting a month or two of free rent, are off the table in the neighborhood. That effectively means tenants’ costs jumped between 8 percent and 16 percent overnight, he said.
“We’re not honoring any new deals,” he said. “If someone doesn’t have a deal in the works, then we’re going to stop, and now we are scaling back with concessions, based on each building’s strategy and need.”
If actual rents do turn around, they may not head straight up. Some nighttime and weekend tunnel closures will still be necessary. And changes to how the L train will be repaired may cause confusion for the market, putting pressure on rents, according to Tali Berzak, a broker with Compass in Williamsburg.
“When you don’t know the answers in the real estate market, there’s a lot of uneasiness, and that uneasiness usually results in it affecting prices,” she said. And the direction they head is “usually downwards.”
To contact the reporter on this story: Justina Vasquez in New York at jvasquez57@bloomberg.net
To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Christine Maurus, Daniel Taub
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