Despite an uptick of housing across the five boroughs, the number of units in many New York City buildings is shrinking.
Construction of new homes is steadily on the rise in the city with more than 36,000 new units added to the housing market in 2018—a small boost of 184 compared to the year prior, according to Department of Buildings data. But in some parts of the city the number of new homes is actually shrinking as developers alter and combine multiple housing units into one, according to new analysis by Streeteasy.
Over the past four years, developers have launched 1,241 buildings across the city with fewer units than when the buildings were initially purchased—roughly 300 less each year, according to Streeteasy. Brooklyn saw the biggest loss with 579 buildings losing units. Manhattan suffered a loss from 481 buildings, while units vanished from 123 buildings in Queens. Just 30 buildings lost housing in The Bronx and in Staten Island units disappeared from 28 buildings.
In many of these cases, developers converted bland rental buildings into luxury condos marketed toward wealthy buyers. The ever desirable West Village, for instance, has shed units as developers convert rental buildings there into condos. The Shephard at 277 West 10th Street is one such building where a 145 rental unit building was converted into 38 condos—including a $24.5 million, 4-bedroom penthouse. Overall, the West Village’s housing supply decreased by 102 units in 2017—that’s up roughly four times from the previous year’s loss of 26 units.
Others, like Russian oligarch Roman Abramovich, have taken this a step further by combining stately townhouses into megamansions—further eroding the city’s housing stock. Meanwhile, other rental buildings are being transformed into townhouses, such as 132 West 81st Street that once held 12 separate units and is now listed for $10.4 million as a five-story, single-family townhouse.
The five neighborhoods hit hardest by these trends are Harlem with a loss of 831 units in 112 buildings; the Upper West Side with a decrease of 442 in 85 properties; the Upper East Side losing 529 in 80 buildings; Park Slope for a minus of 118 in 67 properties; and Bed-Stuy shrunk by 136 units in 53 buildings, Streeteasy found.
But developers are not always making a killing when they do this. A townhouse at 58 West 75th Street once held 11 rental units until it was purchased for $9.1 million. Two years later it was listed for $16 million, but the developer was forced to slash the price by nearly $4 million and as the townhouse sits on the market for $12 million it accrues taxes, maintenance fees, and other costs.