clock menu more-arrow no yes mobile

Filed under:

Do developer-owned coffee houses accelerate NYC gentrification?

New, 9 comments

It’s important to take a close look at how these coffee house brokers operate before painting them as villains in the gentrification saga

The Chipped Cup in Harlem.
Felix Zeltner

Journalists Felix Zeltner and Christina Horsten are the brains behind NYC12x12, a project in which they move to one New York City neighborhood each month, living in different areas of the city for one year. They’ll be blogging for Curbed during their journey, sharing insights and anecdotes from their travels through the five boroughs. Read on for Felix’s first dispatch, and check back for more insights from their NYC exploration.

We spent the month of December in Bushwick, on the southern edge, closer to Bed-Stuy, where the streets are quiet and filled with rows of brownstones. We sublet a duplex next to an old Methodist church, which became the center of the world for a few nights when Oceans 8 was filmed there. But other than that, living there felt almost suburban, lacking the infrastructure and atmosphere we’ve experienced in other neighborhoods we’ve stayed in.

We were happy to discover The Platform, a little coffee shop a few blocks away from our apartment. It provided us with good espresso and a sense of community, as they hosted poetry readings and open mic nights in their basement.

One day, we took the shop’s business card, turned it around, and were surprised to see a real estate brokerage—Subway Realty—advertising on the back.

I ask the barista whether Subway Realty runs the place. “Sure,” he says. “They bring their clients here all the time when they sign contracts.” He points to a corner near the door with apartment listings, many with photographs, pinned to the wall, all from the same firm.

The Platform in Bushwick.
Felix Zeltner

It was then that I remembered an article in the Daily News describing how real estate brokers had opened coffee shops in Harlem to drive business for their listings in the area. We had actually been to two of them without knowing anything about the owners. The message of the article was clear: These “coffeehouse brokers” had found a way to accelerate—and benefit off of—gentrification. Was The Platform yet another outpost of this pricey coffee gentrification machine?

I ask for the owner and end up in a huge, turn-of-the century mansion around the corner. A young employee leads me to the wooden-paneled living room, where Ari Freed, the owner and founder of both Subway Realty and The Platform, sits behind a huge desk stacked with paper.

“It’s not like I’m doing this for business or for money,” he explains. “I did it for the community, I did it because I am an entrepreneur, and I did it because there is nothing around here.”

Freed is a born and raised Brooklynite who came to the neighborhood five years ago because friends of his had purchased buildings, and he too wanted to get into real estate. Since then, he’s expanded his team at Subway Realty (so named because “Brooklyn is all about the subway,” he explains) and now manages around 100 properties, with 20 to 30 listed at any given time.

Ari Freed in his Bushwick office, near The Platform.
Felix Zeltner

Freed ran a wine store before launching Subway Realty, so when a friend asked him for a business idea to revitalize an empty commercial space in a nearby building, he came up with the coffee shop. “Coffee is like wine today,” he says. “Who sat over coffee back in the days? Now, coffee is like an art.”

Still, Freed says he wasn’t aware of fellow brokers opening coffee shops in Harlem, and disputes the notion that $4 lattes would raise the value for his real estate business—he says the shop is more of a risk than an asset. When Freed opened it last fall, he didn’t know much about the coffee business, but had spent a lot of money on the interior and the coffee beans and had hired a manager to run it. Now, The Platform sells coffee from Irving Farm in a wood-paneled room with laptop-friendly lighting.

When I press him on the fact that a $4 cappuccino still attracts different people than a $1 filter coffee, he argues that the shop simply attracts a younger crowd. “It has to do more with a different age of people,” he says, noting that “diverse groups of younger people” come to The Platform to meet over coffee, or to co-work.

A post shared by The Platform (@_the_platform_) on

Perhaps what his coffee shop shows, then, is how Bushwick has transitioned into a neighborhood with more of a transient, younger population. The streets in the southern end of the neighborhood consist largely of two- and three-family homes, limiting the range of available apartments to mostly two or three bedrooms. Freed says the area attracts a lot of shared living (students on one-year leases, for example), with many properties constantly changing tenants. Landlords, in turn, raise rents with every new tenant, even if they lose money in between.

So is The Platform really just a mirror of the local community, more than driving its change? And is it the business of a hardworking entrepreneur or a calculating real estate guy?

A few days later, I connect with Andrew Ding, the subject of the aforementioned Daily News article. The piece claimed that he and his colleagues at Harlem’s Bohemia Realty Group systematically open coffee shops for sub-standard prices scored through relations with landlords, which in turn drive prices for the units above the shops. The article spurred several similar stories with the same claim.

Over the phone, Ding tells me he is a classically trained violist from Sydney, Australia. When he moved to New York, a friend of his, Jeff Green, took him in. Green had started working as a real estate agent to support his artistic career and showed Ding how easy it was to get into the business: One 72-hour course, and you’re done. “That’s how I fell for real estate seven years ago,” Ding explains.

Living in the Sugar Hill area of Harlem, Ding learned about the demographics on his block and saw people commuting to downtown Manhattan every morning, buying high-quality coffee there instead of where they lived because there were fewer options.

Then, a landlord approached his friend Green. He was looking for new business in an unused former barber shop on 129th Street and thought about a coffee house. He offered Green a “decent rent”, as Ding put it, and his friend became the founder of Lenox Coffee, with “very little investment.” And so Ding thought, “Maybe I can try the same thing, transitioning away from the business of real estate.”

The garden at The Chipped Cup.
The Chipped Cup

Together with another artist-turned-broker from his firm, Karen Cantor, he asked a landlord on his street about opening up a coffee shop in a subterranean space he hadn’t been able to rent out. “We didn’t receive any funding from the landlord—he gave us a ten-year lease at a normal price,” says Ding. “This place was not a hot spot, and what we knew was that there was an audience for it.”

Soon after, the Chipped Cup opened its doors, also offering open mic nights and readings, just like The Platform in Bushwick. “Everybody relies on outside living rooms these days, and it feels pleasant to have this kind of sanctuary,” Ding explains. “That’s the whole thing about a New York City coffee shop.”

Since then, his colleagues have opened two other businesses in Harlem: Bearded Lady Espresso, a coffee shop, and Mess Hall, a bar serving craft beers. Ding himself launched a small, counter-seating-only restaurant next door to The Chipped Cup, called the Handpulled Noodle, which has received praise from the New York Times. “I work very little in real estate now; it’s been two years since I rented an apartment,” says Ding.

For Harlem, Ding sees a “fast-approaching climate that will mirror what happened in Brooklyn,” though he rejects claims that he plays a part in conquering it. In fact, his reasoning for the rapid gentrification of the area is similar to Freed’s: “When rents rise, it’s way easier for tenants to point a finger at the lowest business on the ground, the coffee shop, than at an invisible corporation,” Ding explains. “But one of the main reasons why rents rise aggressively is that rent-stabilized apartments are occupied by temporary people now. And every time such a place becomes available, the landlord gets a chance for a raise.”

Ding stresses that he himself might become a victim of Harlem’s rising hipness in the end. “Businesses are equally vulnerable to gentrification. When my leases end, who knows if I can afford the raise?”

In his book The Edge becomes the Center, DW Gibson, a New York journalist and author, takes an in-depth look at gentrification in New York, including the coffee house brokers. “Whenever you ask anyone in a city, What’s the picture of gentrification? Nine out of ten people will say it’s the coffee shop,” Gibson says over the phone. “It’s the ultimate signifier of a neighborhood changing.” Brokers, he says, have an incentive to invest in something like a coffee shop in a gentrifying neighborhood—it helps to attract new residents. “If you’re willing to put down the capital to open up a shop, you have a big tool to convince them,” he explains. “Especially the ones that are skittish and might not have everything they want at their fingertips.”

Gibson stresses that it’s important to take a close look at how these coffee house brokers operate before painting them as villains in the gentrification saga. “What price points are you renting at? Who are the people affording these apartments? And who can afford the cup of coffee you serve? Is it only for the new people? Or do you give out coupons or offer a cup for a dollar for the people there for a long time? Because if I’m a minimum wage worker and I’ve lived in Harlem for 25 years, I’ll walk out on a $4 coffee. But for a dollar, I feel invited here, too.”

He points me to what he believes is a one such business that has done things right—not in New York, but on Chicago’s South Side, where renowned artist Theaster Gates became a developer and opened The Currency Exchange, a coffee shop in a neglected area. He hired local artists as staffers so that the neighbors—mostly young, black residents—would see people like themselves behind the counter.

He used materials and artwork from the neighborhood to build the store, and included a book collection. In the beginning, the staff gave away free coffee for everyone to check out the place. Now, their prices are slightly lower than at their hipster counterparts. “It’s a very clear service to feed people, but the real desire is to have a safe space for the neighborhood,” Gates’s manager told

Maybe this is the best reason for the uneasiness with the broker-owned coffeehouses in New York: Even if they disguise themselves as warm, cozy community sanctuaries, many of them feel like UFOs visiting from another galaxy. Neither the staffers, nor the menu or the interior, reflect the world around them. They offer a safe space for Apple laptops, but not for young people who grew up on the same block.

Last weekend, we went to the Mott Haven part of the South Bronx to look at a place we would like to sublet. The owners told us that nearby, developer Keith Rubinstein has helped to open a coffee shop, a pizzeria, and a gallery, all with a hipster feel. The New York Times recommended his businesses when it put the South Bronx on it’s annual “Places To Go” list—and received fierce rejections from locals.

The developer himself faces strong backlash from the community and has since started talking to local artists. A mutually benefiting future might be the result, at least in the South Bronx, which may have learned from Manhattan and Brooklyn’s destiny. In the meantime, coffee-and-Wi-Fi snobs like us may want to take a closer look at who is behind the latest exposed brick-sporting, $4 latte-serving place.

Have you ever come across this phenomenon in New York and other places? Tell us your coffee stories in the comments or through our website, where you can also sign up for our newsletter—and follow us on Instagram @nyc12x12 for more neighborhood bits and bites.