"When powerful forces in state government collude with the real estate industry, injustices occur"

[tsetsefly]

http://reason.com/blog/2010/03/02/wh...owerful-forces

"When the most powerful forces in state government collude with the real estate industry, injustices will happen, and today is a result of that."


More ugly news for the Brooklyn property owners fighting eminent domain abuse in the Atlantic Yards project. Yesterday Brooklyn Supreme Court Judge Abraham Gerges granted New York state’s petition to seize the holdout homes and businesses on behalf of real estate tycoon Bruce Ratner, who plans to build a new basketball stadium for the abysmal New Jersey Nets (a team Ratner co-owns). As the New York Daily News writes:

Brooklyn Supreme Court Justice Abraham Gerges tossed a challenge to the eminent domain condemnation—a final blow to property owners who fought the wrecking ball for six years.
State officials said the occupants would be evicted in the next few months—but Ratner plans to hold a ground-breaking ceremony March 11.

It’s not technically the final blow, as there are two more legal challenges still pending, but things don't look good. As embattled property owner (and Reason contributor) Daniel Goldstein stated yesterday:

Today is a very sad day to be a Brooklynite. Our state government, long mired in corruption and scandal, has bent over backwards to give Bruce Ratner whatever he wants, including my home, and the homes of other citizens. I am angry with our so-called political leaders who proudly stand by their abuse of power. When the most powerful forces in state government collude with the real estate industry, injustices will happen, and today is a result of that.

when you can't get what you want through through voluntary exchanges, use government force!

Despicable, off course. Hopefully people keep on realizing that no matter were you stand on the ideological spectrum we all have something in common. The government is out to screw us over (unless you have enough money to help them get reelected or secure a job after their term in office concludes). The increasing power of the state leads to the state deciding winners and losers, and the majority of Americans are on the losing side...

[don]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

government is out to screw us over (unless you have enough money to help them get reelected or secure a job after their term in office concludes). The increasing power of the state leads to the state deciding winners and losers, and the majority of Americans are on the losing side...

Powerful interests are using a corrupt government to screw us over. Those in office seldom care what their masters want. If they were being bribed to give us a square deal, no problemo.

[wayiwalk]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

Powerful interests are using a corrupt government to screw us over. Those in office seldom care what their masters want. If they were being bribed to give us a square deal, no problemo.

Yes - this story is sickening. Ratner - named pretty well, I'd say.

[Ghent12]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

Apparently there will be people chaining themselves to a bar that will be demolished for the new residential and commercial complexes.

"There's chains on the bar and a lot of people will be buying handcuffs," said Freddy's regular and opposition organizer Steve de Seve.

Read more: http://www.nydailynews.com/ny_local/...#ixzz0h2j6SEQ2

A good old fashioned protest for a worthy cause. I hope they make the news.

[roxtar]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

Joe Stack was born.... He was created. This is how.

[Serge_Tomiko]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

I really don't know if that has much to do with the itulip investment thesis, but considering I have done a lot of work on this very project and lived much of my life very close by this site, I figured I would weigh in.

A few points.

1) In comparison with other eminent domain actions in New York City and even Brooklyn when it was an independent city, a very small amount of land area is being taken. Major parks for instance were all created via eminent domain. Most housing projects and subways required some eminent domain action.

2) proponents will say that this is a "private" real estate deal, but that is not really entirely accurate. Most of this development, as the name evidences, is going to be constructed above a recessed train yard. Construction of the reinforced decking without affecting train service is a complex task for which few developers are experienced. Forest City Ratner is most certainly qualified. The adjacent blocks are being condemned primarily for use as a staging area and due to structural demands given Pacific Street is very close to the trench. The project would simply not be feasible unless neighboring blocks are incorporated.

3) The blocks being condemned are primarily improved with obsolete warehouse space that was until recently mostly zoned for industrial use. There are perhaps fewer than a dozen houses being condemned. All of them are very old houses that are highly dilapidated as they were built BEFORE the area became industrial over a century ago. They are remnants of a long dead era. The only reason they stand is they were all built at a time prior to existing zoning laws and greatly exceed the floor area of what is permissible by law.

4) Which brings us to a major reason the state is involved. Zoning laws in New York City effectively have halted development. Many people drive around Brooklyn and think that the area must be dirt poor - there has barely been any construction for half a century. But this is not the case. Zoning laws effectively make new development economically infeasible. Many areas are zoned such that even houses from the 1880s are built to a density that exceeds current regulations.

State authority supercedes local zoning laws, thus the state must get involved if anything significant is going to be built on this public land.

5) The public will benefit greatly from this project. The Atlantic Terminal is the largest transit hub in the Western Hemisphere. Nearly every subway line goes through this station. It makes no sense that the area has remained essentially unchanged since the Great Depression hit in 1929. What's worse is the site is practically across the street from Brooklyn's tallest build. Before the borough became the provincial land it was, there was extraordinary excitement about turning this area into a new center of high density, modern city architecture. Once built, the Williamsburgh Bank Tower will no longer be the strange anachronistic monolith it is today. Thousands of people will be brought to an area that is ideal for high density use.

6) Housing in New York City is a complicated issue rarely understood by outsiders. The aforementioned zoning laws and government housing schemes like rent stabilization has effectively limited new development since the early 1960s. Despite the housing boom of the last decade, compared with even the 1930s when over 100,000 housing units were brought online, the 2000s were nothing special. Housing is ridiculously expensive due to nearly 50 years of a housing shortage, and it is affecting the competitiveness of the city. This is a small path towards rectifying that goal.

7) If Reason magazine, or other free marketeers want to get involved, fight the zoning laws and fight rent control.

[Ghent12]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

6) Housing in New York City is a complicated issue rarely understood by outsiders. The aforementioned zoning laws and government housing schemes like rent stabilization has effectively limited new development since the early 1960s. Despite the housing boom of the last decade, compared with even the 1930s when over 100,000 housing units were brought online, the 2000s were nothing special. Housing is ridiculously expensive due to nearly 50 years of a housing shortage, and it is affecting the competitiveness of the city. This is a small path towards rectifying that goal.

I would appreciate more details on this issue, especially from a native. I had heard that the government (either local or state, can't remember) enacted rent price controls some time ago which exacerbated the housing problem and produced fun little tricks to eek out money from renters, such as thousand-dollar key access fees and so forth.

[BigBagel]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

As Serge Tomiko writes change does not come easy to New York City. I always thought New York was a very conservative city in many ways even though it's politically liberal.

[Serge_Tomiko]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

I would appreciate more details on this issue, especially from a native. I had heard that the government (either local or state, can't remember) enacted rent price controls some time ago which exacerbated the housing problem and produced fun little tricks to eek out money from renters, such as thousand-dollar key access fees and so forth.

There are many academic studies on the subject. A major one was from Harvard's RE center. The Manhattan Institute also has done a few good papers, although they recently shut down their real estate center.

That said, rent stabilization is only a problem in expensive areas. In most of the city, the stabilized rent is not that much different than the market rent. In Manhattan, RS is really looked at like a bond. It's low risk due to the positive leasehold interest of the tenants, so they just take it. The big problem in the boroughs is the perpetual leasehold - it makes it very difficult to evict tenants for drug dealing and other uncivilized behavior.

These days, I think the zoning laws do much more harm than good. Particularly in Brooklyn, much of the borough could be just as dense as Manhattan but all the NIMBYs freak out if a building is constructed that is even one story taller than what is typical. It has become a strange subculture amongst the activist class there. The Atlantic Yards project is a prime example.

[dummass]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

These days, I think the zoning laws do much more harm than good. Particularly in Brooklyn, much of the borough could be just as dense as Manhattan but all the NIMBYs freak out if a building is constructed that is even one story taller than what is typical. It has become a strange subculture amongst the activist class there. The Atlantic Yards project is a prime example.

Why not change the zoning laws and let the current owners take part in the renovations and profits. The zoning in the area is already being changed for RATner; otherwise, he wouldn't be able to do his project.

The article didn't say at what price the current owners are being paid for their land and improvements; but, if I were to venture a guess, it likely falls short of the true value.

RATner would probably lose interest in the project if he had to pay fair market value.

[Serge_Tomiko]

Re: "When powerful forces in state government collude with the real estate industry, injustices occu

Why not change the zoning laws and let the current owners take part in the renovations and profits. The zoning in the area is already being changed for RATner; otherwise, he wouldn't be able to do his project.

The article didn't say at what price the current owners are being paid for their land and improvements; but, if I were to venture a guess, it likely falls short of the true value.

RATner would probably lose interest in the project if he had to pay fair market value.

No, the zoning laws are not being changed for Ratner. The state is condemning the land, thus city laws do not apply. Ratner will be entering into a long term ground lease with the Empire State Development Corporation, which will manage access with the Metropolitan Transportation Authority.

This is actually the only injustice. The current owners will only be compensated for the value of their properties WITHOUT consideration of the state's plan, thus the value is predicated on the zoning laws as of the condemnation date.

And some buildings are quite massive, in particular Weinstein's building at 750 Pacific Street, which has a floor-area-ratio greater than what the average will be for the AY project once its complete.