February 26, 2012
Why so few larger apartments in first planned tower? Maybe it has to do with not gambling on the market-rate units
Remember how Forest City Ratner said last month that the "goal"--actually a promise--of ensuring half the subsidized apartments (in square footage) would be larger units wouldn't be met in the first tower?
FCR executive said it had to do with the way city subsidies work. Perhaps, but consider that the 175 subsidized units would be the same configuration (mostly studios and one-bedrooms) as the market-rate units. And it's a lot less risky to rent smaller market-rate units than larger ones.
As the Wall Street Journal reported in a 2/13/12 article on market-rate condo units, Brooklyn Feels a Pinch: Few Family-Size Apartments in Borough:
Developers are often loath to gamble on larger units, especially in neighborhoods that are considered up-and-coming. A $1 million three-bedroom unit that doesn't sell is a much greater liability than a smaller unit.
After all, who's going to want to pay market-rate rents to live next to an arena? Likely those who value the location--the proximity to transit and nightlife. That suggests singles and couples, not families.
Posted by steve at February 26, 2012 5:49 PM