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BatteryPark.TV has reported on several cases recently of wealthy families with incomes over six-figures, renting apartments that cost well more than $3,000 per month, who have been evicted as their buildings were acquired and converted to condo ownership. Many of these families are long-term residents, and not transient renters. Being forced to relocate, in many cases, will harm their children at school, or lower them on the waitlists for kindergarten.
The building at 22 River Terrace was the first to evict such renters. Now, up the street, 41 River Terrace is up for sale, as BP.TV exclusively reported (The local eBroadhseet has covered the story today, without proper credit). In addition, even the low-end housing LeFrak company is trying to convert Gateway Plaza into a more upscale housing unit by pressuring renters with grandfathered clauses in the leases, that allow them to pay less than new market rate tenants, to move out.
Bloomberg News and Zillow.com recently published a report claiming that Battery Park City had the highest home price jump in the country, for 2013, explaining the rush to convert the condos. But all of Downtown is a hot market now, at least while the bubble lasts (If the Fed raises interest rates, it will all deflate).
In Tribeca, the same process is going on. The building at 67 Vestry Street was bought by Aby Rosen for $16.5 Million, who plans to tear it down and build yet another glass box high-rise. The rent stabilized tenants facing eviction have created a group with a website at WeAre67Vestry.
Gentrification is not new to Manhattan. Normally, low-income neighborhoods attract the hip scene who make it a popular neighborhood. Then, the real estate developers come in and raise housing prices, chasing away the artists and creatives, making room for the less interesting yuppies. But the current events are a whole new form of gentrification. The “One percenters” are chasing out the mere wealthy from their expensive apartments.
Will the developers regret running off the good tenants once the housing bubble bursts? Will the condo conversions sit unsold, and go into bankruptcy, as so many did after 2007 (e.g. 225 Rector Place)?
Janet Yellen spoke last week, and she is knocking. Interest rates will rise soon, and those undesirable six-figure income renters might be recruited back to fill the unsold condos.