As developers look to find the next booming NYC neighborhood, they’re increasingly looking towards neighborhoods in the Bronx for their big break. A new analysis by The Real Deal has revealed that while developers are making large investments in the borough, those investments might not necessarily reap dividends in the near future.
TRD’s analysis revealed that between 2010 and 2016, investors spent about $9.2 billion purchasing buildings in the Bronx, but these buildings might not necessarily have generated enough income to warrant those high sales prices.
While these speculative investments aren’t totally out of sync with reality—home sales and prices have been increasing in the borough in the past couple of years—they do however pose a danger to many rent-stabilized tenants in the Bronx.
As TRD points out, on average, those speculative transactions that occurred between 2010 and 2016 occurred in buildings in the Bronx where 83 percent of the apartments were rent-stabilized, putting restrictions on landlords who want to increase the rent. While a rent freeze was approved for the past two years, it’s not shaping up to be the same kind of good news for tenants this year.
Local elected officials and housing advocates worry that in their zeal to turn a profit, landlords could potentially try to force out rent-stabilized tenants through carrying out unnecessary repairs or dramatically increasing rents when people move out.
Last summer, City Councilman Ritchie Torres, who represents neighborhoods like Tremont, Fordham, and Williamsbridge, introduced a bill in the Council to create a watch-list of landlords who were indulging in this type of predatory behavior.
That the Bronx is booming is not really up for debate—last year, the Bronx had the most number of residential construction permits issued in the first six months. It also doesn’t seem like investors are going to stop speculating in the Bronx anytime soon, but new protections put in place by city officials may stem the tide just a little, and help protect the borough’s long-term residents.
A similar situation arose in East New York as the city was getting ready to rezone the neighborhood in Brooklyn. That controversial rezoning was approved last April, but concerns still remained about how new development would create affordable apartments that were actually affordable to people living in the area, based on the area median income.