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Brooklyn's massive housing development Starrett City has been on the auction block for close to two years. But protests from residents and politicians have derailed a sale over the possible loss of affordable housing. Now, the complex, which spans 140 acres and has 5,881 units, is up for sale Tuesday with a better shot of a getting a deal done because of an agreement reached between the owners and federal, state and city governments to cap the rent increases for the next two decades, according to the New York Post.
The agreement requires that any sale would mandate that rents on 60% of the apartments be capped to 30% of monthly income. With the other 40% of the units, the new owner would be able to charge rents based on an analysis of the rental market at rates requiring city and state approval. Sen. Chuck E. Schumer, D-N.Y., was quoted in a New York Times article that the deal "ensured that any new owner -- whoever that owner is -- will have to keep Starrett diverse, balanced and affordable, an oasis for working-class families that it has been for the last generation." Finding a bidder for the development won't be hard; there's been a trend over the last couple of years for Wall Street investment firms to acquire rent-controlled apartments in New York City for their steady cash flow and recent appreciation in value. Tishman Speyer Properties and BlackRock Realty, for example, paid a hefty $5.4 billion for Peter Copper Village-Stuyvesant Town, a middle-class enclave that spans 80 acres in highly coveted Manhattan. The price was the highest paid for a residential property in the U.S. Starret City, which is officially now known as Spring Creek Towers, likely won't garner the price tag of Peter Cooper Village-Stuyvesant Town, but some believe it will attract bids in the $1 billion to $1.5 billion price range. A $1.3 billion offer from real estate investor David Bistricer was rejected last year due to pressure from politicians and residents claiming that he would not keep the development affordable. - Gerald Magpily See New York Times articleTheDeal.com: HUD nixes Starrett City deal TheDeal.com: Spitzer weighs in on Starrett City deal TheDeal.com: MetLife sells N.Y. apts for $5.4 billion Dealscape: Another middle-class complex goes up for sale Categories Deal Video
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