Volume 20, Number 32 | The Newspaper of Lower Manhattan | December 21 - 27, 2007
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CHATHAM GREEN GREEN DENTAL CARE
This Downtown Alliance graph shows Lower Manhattan’s rapid housing expansion will reach new heights this year and next. The study area is primarily in the Financial District and Battery Park City.
Downtown housing breaking its records by record numbers
By Patrick Hedlund
Jon McMillan, director of planning for Rockrose Development Corp., remembers the time he realized Lower Manhattan had come into its own as a residential neighborhood.
“I noticed in about 2005 I started seeing dogs in the Financial District, and that was such a surprise,” said the former director of planning and development for Battery Park City Authority. “I knew that the place had finally arrived.”
Downtown has witnessed an extraordinary transformation from time McMillan first moved there over two decades ago. The sea change has culminated with the release of figures last week from the Downtown Alliance stating that 2007 has been the biggest ever for residential development in Lower Manhattan, and that does not include most of Tribeca, which has also experienced rapid growth but is out of the Alliance’s study area.
The rapid residential growth Downtown has been widely known and continuing for at least a decade, but the numbers in the Financial District and Battery Park City for this year and next are still eye-popping.
According to the Alliance, 2,807 new residential units came on the market this year, including 1,382 units of new construction and 1,425 conversions, marking Downtown’s single-largest year for new development in the past 23 years. The record-breaking number trumps development figures from 1998, when the Alliance counted 2,003 new units previously the highest year for growth Downtown by over 40 percent.
This year’s record-breaking number is expected to jump by another 50 percent next year, with the Alliance predicting 4,215 new units for Downtown in 2008. That represents a 143-precent increase from just two years ago, and an over 1,200-percent increase from 20 years earlier, when just 317 new units came on the market.
There are now almost 13 percent more Downtown apartments on the market than there were at the beginning of the year, bringing the total to 25,051.
The recent gains stand in stark contrast to figures from 1992-’96, when residential construction stagnated Downtown. Liz Berger, president of the Downtown Alliance and a 20-year resident of Lower Manhattan, said the area’s increasingly mixed-use character continues to drive its popularity as a residential destination.
“I don’t think we’ve ever seen anything like it,” Berger said of the figures. “The notion of the live-work community that’s what’s happening, and that’s what’s so exciting.”
Retail amenities have gradually begun to pop up throughout Lower Manhattan, making the traditionally office-dominated area more desirable for not only singles who want to live closer to work, but also families attracted to the area’s parks and reputable schools.
Less-populous neighborhoods often struggle in luring retail tenants, but Downtown’s steady residential growth from about 8,500 total units a decade ago to more than 25,000 this year has started to even the scale.
“The thing about the Financial District is that it’s diverse,” Berger said of the once residentially barren Downtown neighborhood, citing new grocery and retail options. “That is what creates the buzz down here the diversity of use, the diversity of experience.”
As destination restaurants, upscale retail shops, grocery- and bookstores move in, residential tenants follow. But another strategy unique to Downtown development, which McMillan called “sky culture,” has new residential buildings integrating amenities on-site to offer tenants a more complete living experience.
Indeed, new projects like Andre Balazs’ 320-unit William Beaver House in the Financial District will provide a host of in-house amenities, including a private movie theater and nightclub, covered outdoor park, swimming and sports facilities, and a penthouse open to all tenants.
“A lot of the socializing isn’t happening in the streets and in the bars,” McMillan said. “In a way it’s a very good thing… The downside is, they’re all up in their private clubs,” which is taking them off the streets.
Battery Park City represents a somewhat more secluded swath of Lower Manhattan, where soaring development has attracted families and residents buying into the area’s many eco-friendly buildings. Twenty years ago, McMillan noted, it was “cosmopolitan-type” residents that made up the neighborhood, but they grew up, got married and started having kids.
Christopher Albanese, principal of the Albanese Organization which has developed over 800 residential units at three Battery Park City buildings said the neighborhood’s relative tranquility and proximity to the Midtown central business district have contributed to the flurry of new residents.
“It’s serene in the Financial District, Battery Park City is very busy, and so is Tribeca,” Albanese said of area development.
While Berger challenged the assertion of any serenity in Lower Manhattan today, McMillan recalls when just one or two residential buildings existed in the Financial District. However, any idea of Lower Manhattan as a neighborhood that shuts down at the work bell and appears abandoned on weekends is quashed by the sheer amount of construction activity each day.
McMillan attributes that pace of construction to attitudes toward Downtown a year or two ago, causing rents to rise, but he predicts a leveling off of prices and no foreseeable problems on the horizon.
“It’s just taken an incredibly long amount of time for this to happen,” he said. “We were all sitting around in the ’80s and ’90s wondering why it wasn’t happening.”
But the current numbers don’t lie, which puts Downtown at the fore of some of the most sought-after areas across the city.
“I think Downtown has anchored itself as a first-class residential neighborhood,” Albanese added, “and that will continue.”