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Wednesday, December 26, 2007

Invasion of the Condo Snatchers

Last night I expected the plane to be empty. Mark had told me about a Christmas Day flight where he and a skiing buddy flew first class because there were so few passengers. In my fantasy I was stretched out, reading a magazine between naps.

Not so. The flight was packed, and I may have been the only American. People spoke Korean, Mandarin, various Indian dialects, French and Spanish. Everyone had their passports out as ID.

I sat next to a father and his five year old son. Their family of five and I were stuck in the last row of the plane, unable to lean backwards. For some reason, I couldn't figure out where they were from. Their quiet conversations sounded first like French, then Spanish. So either they were bilingual or this was a hybrid language (Mark suggested Catalan).

Well-dressed attractive brunettes, they sported the latest gizmos. The little boy tinkered with his father's iphone and later played chess on a Sony Vaio. I was impressed by how well-behaved he was. Meanwhile, I nursed a slight bout of air sickness and avoided watching the bad movie that was playing above me.

I started thinking about the other passengers and the recent tide of foreign investors in New York. The Times real estate section has been publishing articles like this one for the last several months about foreigners purchasing condos as investment properties. Condos make it possible to have not just a city pied-a-terre, but one that makes financial sense. You can sublet your apartment for however many years, use the income to pay off your mortgage and sell it later for a profit.

This fall, the Times described a man in Ireland who bought his apartment without seeing it. The place was near Wall Street, and the man reasoned that Wall Street wasn't about to leave, so it had to be a good investment. (Wall Street also isn't much of a neighborhood, but who knows. Things change).

There are good and bad things to this scenario. The good thing is that the New York real estate market hasn't slowed much at all. Those that have bought in don't have to worry yet. The bad thing is that the real estate boom will induce more growth, more landlords will be enticed to sell their buildings to developers for renovation and even more of the middle and lower classes will be forced out of the city. Brooklyn will continue to thrive and grow. All the boroughs will spread outwards.

The thing is, we aren't feeling the weakness of the dollar in America quite yet, since for whatever reason, countries are selling us their goods at discounted prices. At some point, though, the gap will become too great and we'll start feeling it.

Here's my fear, and it's a conclusion I made after finally succumbing to the movie on board: the dollar will continue to weaken and New York will become another Disneyworld that people visit from abroad. America will be lured into thinking it's still doing all right because it doesn't feel the weakness of its own currency. We'll be lulled into submission. The rest of the world keeps us happy and we keep doing what we do best - producing fashion, gadgets and movies. It happens in the animal world, too, when parasites keep their hosts just healthy enough to run around.

I don't blame the foreign investors. It makes financial sense for them to take advantage of the market. However, as a New Yorker, I'm petrified. I fear the city will essentially die, and become another Venice, a likewise glammed up, overpriced shopping mall. I fear people will move in for the short term, without care for the neighborhoods. And I fear that New York will become a parody of itself, a member of the walking dead. We'll be talking about it in the past tense, longing for what it once was.

Photo by myself in the West Village.


A Red Mind in a Blue State said...

I wouldn't be too worried-- NY is too big and too frothy to allow that to happen. Back in the 80's the Japanese economy was roaring and they were buying buildings, and companies, like they were hot cashews from the guy on the corner. Don't hear much about that anymore.

One of the reasons Alexander Hamilton came to NY in the 1700's was because there were over 15 languages being spoken in NY-- and remember, you probably have more people living ion your block than lived in Manhattan at the time! (Quick aside--when Washington lost the battle in lower Manhattan, he and his troops escaped through the wilds of what is now midtown!)

NY will survive; it will just adapt a bit. Its not Venice. First, the population of Venice is about 200,000-- or about the same as only Harlem, Greenwich Village and the East Village. It will take a heck of a lot more than a temporary devaluation of the dollar to turn NY into a theme park!

Tammy said...

I remember one of the last plane rides I was on, it was from Montreal to Vancouver and I swear me, my mother and my daughter we the caucasians on board. It was filled with orentials and I didn't know why. I later learned that you have to fly out of Vancouver to get to Japan. I hope you are having a great Christmas vacation, it's going so fast.

Ha Ha Sound said...

Actually, I think that it has already happened. When I first moved to NYC in 1995 fresh out of college, it was still possible for a broke 22-year old to find an affordable one-bedroom apartment by doing a lot of legwork. Now, you more or less can't afford to live in Manhattan unless you make mid-six figures or have roommates. The entire borough has more or less become investment bankers and students. It's dull and soulless now.

After living in Manhattan for 10 years (I took a 2 year break to live abroad), I'm finally leaving the borough for Brooklyn because Manhattan just isn't interesting anymore. I'm late to the game, but I'll be joining pretty much all of my friends.

And I'll just lastly say that I think the entire city is that much poorer for this trend. There's very little culturally exciting going on in Manhattan beyond museums. It's a generalization, to be sure, but still.

As best as I can see, absolutely nothing has been done by our city leaders to preserve affordable housing for the middle and lower classes. I hope somebody throws that in Giuliani's face while he's on the campaign trail.

OK, rant over. Happy holidays.

kitty said...

Red Mind, I hope you're right.

Ha Ha, I'm completely with you. The prices in Manhattan are insane.

Come to Brooklyn, it's lovely here!

(hi Tammy! :-))