The sale of middle class enclave Peter Cooper Village Stuyvesant Town in Manhattan in October was a sign that investors are craving the steady income from large blocks of rental apartments in New York City. The latest apartment complex to go up for sale is Spring Creek Towers formerly known as Starrett City — a 140-acre apartment development in Brooklyn that primarily houses working-class New Yorkers — according to the New York Times. The auction, which may take place in January, could garner slightly more than $1 billion, experts say. That is far less than the $5.4 billion,Tishman Speyer Properties and Black Rock Realty paid for Peter Cooper Village Stuyvesant Town. But the price differential is primarily based on location and size. The 110-apartment buildings on 80 acres that make up Peter Cooper Village Stuyvesant Town are located just above the more expensive Lower East Side in Manhattan. Meanwhile, Spring Creek's 46 towers on 140 acres are located on Jamaica Bay in Brooklyn.
Despite their differences, the two complexes were built with the intention of housing New York's working middle class. Spring Creek Towers was built 30 years ago and today its makeup remains unchanged. Spring Creek was built under the state’s Mitchell-Lama program, which was a program devised by the city in the 1970s that gave developers tax abatements and low interest mortgage loans in exchange for moderate rents that increased based on government approval. On the whole, about 90% of the tenants get direct federal rent subsidies or other types of government assistance from the city and state.
If a new buyer is found, the question arises will Spring Creek Towers remain in the city's Mitchell Lama Housing program. According to the New York Times, the complex could drop out of the Mitchell-Lama program and raise the rents for some tenants, and it could develop some of the vast amounts of vacant land on the complex with new apartment towers. One thing's for sure, market forces have made middle-income apartments in New York City a desirable commodity. It's just a matter of time — unless the government sets more aggressive policies to preserve what middle-income housing exists and build new ones — before the Big Apple will be a place without middle-class New Yorkers. — Gerald Magpily
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