New York renters may see large rent increases or a change of heart with their current building. Some may have realized they are paying way too much for what they’re getting for their money. 

With their annual Subway Median Rent Map, RentHop provides a detailed report to help renters visualize where they can save by riding the train to affordability.

This year, 84% of Subway Stops saw increases in rent. This is lower than last year, but the median rent is currently at $4,400, 3.5% higher than the same time last year.

New developments and renovated units caused spikes in rent in the outer boroughs, so for renters concerned about their rent changing in the coming years, keep an eye out for construction and updates.

Tenants with lower rents aren’t moving, which is decreasing the current inventory for lower-priced units. This could cause problems in the future if these tenants move out and owners renovate and charge higher rents.

Where to Live if You Work Remotely or Hybrid in NYC

With remote and hybrid work becoming more popular, does it make sense to shell out for an apartment in the city’s heart with a quick commute that may only happen 1-2 times per week? Increasingly, renters look to their local neighborhood communities to find nightlife, meals and social happenings. If one’s community provides everything they need, why fork over large amounts of rent?

Below, CitySignal looked at some of the best stops to live off of for renters wanting to be in proximity to a certain Subway line.

Best NYC Subway Stops to Live Off the 1-2-3 Line

Apartments off the Cathedral Pkwy 1 train stop at 110th Street saw a 1.4% dip in rent. While the median rent is higher at $3,450, you’re farther down in Manhattan and are in proximity to several parks.

135th Street Station (2-3) in Harlem has a median rent of $2,567 and only saw 2.9% growth last year. This may mean you can snag a better deal in the area.

Best NYC Subway Stops to Live Off the 4-5-6 Line

Rent along the 6 train saw the most drastic rental decreases, with some rent near stations coming down over 6%. 

Brook Ave off the 6 train in Mott Haven in The Bronx. The current median rent is $2,369, with rent dropping 6.4% since last year. 

The Franklin Ave stop for the 2-3–4-5 had one of the lowest rent growths in the Crown Heights, Brooklyn area at 2.9%. Median rent sits at $2,910 but you have access to the S train which can connect you with other Brooklyn lines.

Best NYC Subway Stops to Live Off the N-Q-R-W Line

If your budget has room to grow over the coming years, check out Astoria Blvd ($2,750/6.8%) or Broadway ($2,650/6%) off the N/W. Rent is still proportionately low; however, the area is seeing major growth, which may impact your lease during re-signing. Make sure to read the terms of your lease carefully.

Best NYC Subway Stops to Live Off the B-D-F-M Line

While 155th Street (B-D) in Harlem saw 19.3% growth this year, the rent is still sitting at $2,600. This is a great stop to live off of if you’re a Yankee’s fan, you could even walk to a game!

F Ditmas Ave (F) is a Brooklyn stop in the quaint neighborhood of Kensington.

Newkirk Ave ($2,379/-1.9%) on the B–Q lines will send you straight into Lower Manhattan or give you the chance to transfer in Downtown Brooklyn to another line.

Best NYC Subway Stops to Live Off the A-C-E Line

The A stop at 190th Street in Washington Heights, just south of Inwood. With access to green space on the west side of Manhattan, current median rent sits at $2,300 with a -2% change since last year.

Utica Ave (A-C) in Bed-Stuy has a median rent of $2,600. There are many small local businesses that you can enjoy instead of traveling into the city.

Grand Ave-Newton in Queens ($2,200/0%) gives renters access to the E–M–R trains but is also two stops away from the 7 train. 

Best NYC Subway Stops to Live Off the J, G, L & 7 Trains

J train riders should look around Kosciuszko St. in the Bed-Stuy/Bushwick area, where the median rent is $2,850, a 1.1% drop since last year.

For G train lovers, check out the Myrtle-Willoughby Ave ($2,850/3.6%) or Ft. Hamilton Pkway ($2,838/-4.9%) stops in Brooklyn. Queens G stops have seen large rent growth, and apartments near those stops have an average rent of over $3,800!

The L train is a pricey line to live off of (thanks to going through Williamsburg), but the first stop to see a bit of rent relief is Dekalb Ave ($2,728/1%) in Bushwick. How trendy.

The 7 Train has quickly become a favorite of many renters, so look to 33rd St in Queens for a median rent of $2,750.

Best Neighborhoods to Live to Have Access To All Subway Lines

For access to multiple Subway lines, consider apartments in FiDi, SoHo/Chinatown, Downtown Brooklyn, or Hunters Point/Long Island City in Queens. These are not the friendliest for budget-conscious people, but if one needs to travel, access may be helpful.

The post Which NYC Subway Stop Is The Best to Live Off Of? appeared first on CitySignal.

485-x is the replacement for 421-a

After the 421-a program expired in June 2022, there has been a long gap during which no plan has emerged to replace it, despite Governor Kathy Hochul’s attempts with substitutions such as 485-w. But under the new budget, 485-x is the newest ten-year tax incentive to create housing in New York City with affordable housing and homeownership opportunities. The new program extends the completion deadline for projects from the expired 421-a through 2031, so those who might miss the 2026 cut-off have time for completion. There will be tax benefits for housing construction where smaller buildings will need to have 20% of the units listed with below market rents for people making no more than the area median income (AMI), which is limited at 80%. Larger buildings will need to set aside 25%. 

There is also a minimum construction wage requirement ($35/hour); however, the minimum is higher for new builds under 96th Street in Manhattan and on the waterfront in Brooklyn or Queens, the areas that will most likely generate higher rents ($72.45/hour or 65% current rate, whichever is less).

Hochul is hopeful for the new plan’s success, as 421-a produced an estimated “two-thirds of all newly constructed multifamily housing in the City in the last decade.”  The ultimate goal is for 485-x to help increase the housing supply.

What is Good Cause Eviction? More Tenant Protections

Good cause eviction was enacted immediately (in NYC) after the budget was passed in April 2024 and will be active until 2034. The proposal’s inclusion with the new budget will limit landlords’ potential evictions of tenants. ‘Good Cause’ means that a landlord must have a good reason to evict a tenant, such as illegal behavior, non-payment of rent, or if the building will be demolished or converted (from residential to commercial). States such as California have enacted good cause rules, and Connecticut may soon follow suit and pass legislation to give extra tenant protection. 

There are some exemptions to the Good Cause legislation, such as units with a monthly rent that is greater than 245% of the fair market rent, above (above $5,846 for a studio; $6,005 for a one bedroom; $6,742 for a two-bedroom; and $8,413 for a three-bedroom). This is far above the current average rent in NYC. Other exemptions include small buildings with ten units or less, units already subject to rent regulation, and condos or coops, among a few exceptions.

Protections to help tenants avoid price gouging were also implemented, limiting annual rent increases to no more than 10% or 5% plus the Consumer Price Index (whatever is lower). Additionally, squatters, another controversial topic that has frequently been making the news, are reinforced as not being tenants and, therefore, not having the same rights and protections.

What Else Was Passed With The Housing Proposals Of The 2025 Budget?

Notably, the new budget looks to tackle the the lack of rental inventory on the market and bring back vacant units that are off the market due to being inhabitable or outdated. These are situations where the landlord may have to spend more than they would make in rent to renovate the apartment due to rent control or stabilization. Owners will be able to recoup a portion of the renovation costs over a 15-year period, and there will be $40 million set aside to help bring apartments out of NYC back on the market to contribute to the supply.

The budget also includes a pilot program to legalize basement and cellar apartments in certain areas of the city. Illegal basement apartments have received negative press in recent years due to fatalities from extreme weather that led to perilous flooding. 

In terms of housing discrimination, the Division of Human Rights will strengthen enforcement of Section 8 Housing Choice Voucher discrimination by housing providers or real estate professionals. It will also prohibit insurance companies from refusing to cover affordable housing. 

Stronger enforcement and preventative measures to protect homeowners against deed theft by predatory investors to acquire interests in inherited properties and pressure homeowners to sell their homes. A Transfer on Death Deed has been introduced so homeownership will be protected in the event there is no formal will at the time of an owner’s passing.

Over $600 million in capital funding is allocated to support various housing-related initiatives across New York State, including significant investments in public housing authorities and initiatives like the New York Housing for the Future program, which aims to promote cooperative rental and homeownership in fully affordable housing projects​.

What Is The Community’s Response To The Housing Proposals Such As Good Cause Eviction and 485-x?

While Albany is heralding the housing provisions as a victory, not all feel the same.

Democratic Socialist Association (DSA) claims the bill missed the mark by a lot when it comes to Good Cause Eviction.  

“Governor Hochul’s version is “Good Cause Eviction” in name only—with major carve-outs to make it more palatable to the Real Estate Board of New York (REBNY) and greedy landlords, leaving at least three million tenants unprotected,” said the DSA.

REBNY President Jim Whelan also expressed his reservations about 485-x’s success, stating in a statement that the program will “produce less housing than its predecessor.” He also felt that landlords’ stabilized rent increases would “fail to reverse the declining quality of that housing stock.” 

“We are confident that this package falls far short of addressing the city’s housing needs and must be reassessed in the coming years to put the rental housing market on a solid footing.”

The post Housing Proposals with FY 2025 Budget: Good Cause Eviction, 421-a Replacement appeared first on CitySignal.

It’s getting better, just not quickly enough.  The streets feel far more crowded than 1-2 years ago, but the majority of business owners are squeezed on both ends by higher wages, inflating expenses, and lower foot traffic.  Today we focus on two interesting niches that have not quite recovered.

Theater Space For Rent

Pop-up event space has always been tricky to find in premium Midtown locations, but now off-Broadway, smaller theaters such as Chain Theatre are regularly offering their spaces to mitigate the shortfall.  It’s unclear what you might host in a 99-seat theatre, complete with a 2nd story escape door and backstage dressing room.  A corporate outing for all-hands meetings?  A hackathon?  Your own escape-room themed birthday party?

It would probably be cheaper than any of the usual hotel spaces to hold a corporate off-site event, but the dimensions don’t exactly lend themselves well to the usual coat check, catering, bar, and networking.  Plus, you are paying for the trap door!  How exactly will your company all-hands meeting use it?  (HR and Security will not be happy)

Still, at least they should have the AV situation mostly under control.  They also have two smaller spaces which could make for breakout rooms at a reasonable additional cost.  It’s unclear if you need to use unionized labor or can bring in your own company, but the restrictions may be more flexible than those at hotels and traditional venues.  Don’t expect theaters to turn into NYC apartments for rent anytime soon, though.  Despite the many creative zoning variances under discussion, theater space is not on the list.

Bridge Clubs in Crisis

Before the pandemic, Manhattan was home to the largest bridge club in the country, and over the years the Greater New York Bridge Association included over 4000 members that frequented 4 fulltime clubs and several private invitational clubs (such as the Regency Whist Club, University Club, and Cosmopolitan Club).  Unfortunately, bridge players are an aging population (median age 74).  They were among the most at-risk group during Covid and many migrated to online bridge or stopped playing altogether.

The once thriving bridge clubs would hold daily tournaments and lessons twice a day, with the main game regularly reaching capacity at 140 players with tables overflowing to the elevator lobby, with many more taking lessons or playing a newcomer game on a different floor.  Evening and weekend games thrived, and some morning sessions ensured heavy utilization of the space: approximately 60 hours of bridge usage per week.

Fast-forward to 2024 and Manhattan is down to one club in a significantly smaller space which fills to 60% capacity on a good day.  There are promising signs for the Wed evening game and a monthly Sunday Swiss teams, but most other evening initiatives have fizzled out.  Club management hiked prices 15% this month, $40 to play in the afternoon main game when online equivalent price is $7 (sans commute, Covid, and getting dressed).

Space Utilization Solutions?

Perhaps the real problem is utilization.  One theory: a space in Midtown New York pretty much needs to be in use at least 40 hours a week in order to make economic sense (pied-à-terre excluded, by definition they do not make economic sense).  Or, when used for fewer hours, the space is packed.  A top flight Broadway show still runs 6 days a week with 2 matinees.  Less popular shows don’t quite meet the bar.  A fulltime bridge club holding only 20 hours of games per week will fold and needs to supplement with Canasta, Mah Jongg, Scrabble, and Backgammon (at one point they considered Magic: The Gathering).

Would it make sense in the future to build multi-purpose space that has one group heavily utilizing only during the day and another group only in the evenings?  What would it take to build a space configurable to both bridge and theater, all in the same day?  More amusing, could we extend the idea to apartments and offices?  Instead of “work-from-home”, what if we reverse the concept to “sleep-at-office” where you save money on rent because everything you need, from showers to beds to baby cribs, could be found at the office?

Ok, sleep-at-office is probably not feasible, especially once families and children enter the picture.  But we should continue to brainstorm creative and quirky solutions that could appeal to an open-minded niche and unlock many hours of idle space-time.  By pushing the boundaries of what normal zoning and building codes allow, we might just stumble into a sustainable new normal.

The post Midtown New York 2024: Empty Offices, Theaters, and Bridge Clubs appeared first on CitySignal.

Insurance Concerns:  Taiwan Earthquake Case Study

Why does it matter?  When you buy homeowner’s or disaster insurance for your house, you need a policy that covers the cost of rebuilding the damaged building.  You do NOT get paid for the entire value of your real estate, because in theory the land can not be damaged by fires, flooding, earthquakes, or other problems that can ordinarily destroy a building.  Land is forever finite, and the value comes from the location, surrounding neighborhood, and the potential highest and best use of the land, as they say.

Unfortunately, the tragic earthquake claimed over a dozen lives with many more injured.  Those fortunate enough to avoid physical harm will still suffer serious financial consequences, despite the vast majority having some form of basic earthquake insurance.  First, the authorities quickly ruled that owners of the Uranus Condo must continue paying the mortgages, despite the total destruction and uninhabitability of their real estate.  In fact, during the 9/21 earthquake many years prior, banks were able to convert mortgage debts into personal debts for homeowners.

As a one-two punch, most insurance payouts would not exceed $50K USD, far less than a typical home, even in Hualien, Taiwan.   The rationale?  You guessed it, our theme today is the value is in the land, not the building!  To estimate the coverage gap, we can check the Taiwan equivalent of the RealtyHop property record search to find recent purchases at the 天王星 building.  Someone JUST purchased two months ago in February 2024, although as a $1.6M NTD studio, the loss of coverage should be minimal.  Less fortunate is the buyer of the 3rd floor condo less than one year prior, who paid $2.7M NTD, possibly expecting a decently high cap rate and more appreciation on their investment. Cap rates on residential buildings in Hualian range from 4-5%.  The $1.6M studio owner could have rented it out for about 9K a month, netting about 6K after non-financing expenses.  Instead, these owners will need to continue paying their mortgages, not have a viable unit to use as a home or source of sublet income, AND the insurance payout is not enough to find an equivalent new place or even payoff the financing.  Imagine if the earthquake had impacted a larger city such as Taipei — the losses from the insurance cap could be staggering (a $1.5M NTD payout on a similar studio in a 30-year old building might not even cover 10% of the replacement cost in the urban cities).

Tax Depreciation: Do Not Depreciate Land

There is a much more common and less morbid situation where the land, building, and real estate values cause some confusion: cost basis and tax depreciation.  The IRS allows a landlord to depreciate residential real estate assuming a 27.5 year useful lifespan.  That is, the day you buy a house intendnig to rent it out, whether the house is brand new or built 50 years ago, the timer starts on the 27.5 years.  You are allowed to take a depreciation expense every year.

Say you decided to buy the house at 345 Northeast 163rd Street in Golden Glades, Miami, FL for the asking price of $780K, all cash (there is a 2.5% buyer agent fee, so assume your negotiation skills made that go away).  The high cap rate attracts you, so you manage to sublet it for $4000 a month while paying $564 in real estate taxes and $436 in maintenance and management of various sorts (nice round numbers, $3K a month profit).  You are making money and therefore owe income tax.  However, thanks to the wonders of depreciation, you can reduce the tax and increase cashflow.

Can you simply take a straight-line depreciation and divide $780K by 27.5 to get an annual $28,363 deduction?   Not so fast!  The IRS won’t let you depreciate the entire purchase price of the home.  Instead, they suggest pouring over assessor data to separate out the value of the land from that of the home.  Let’s take a closer look at the RealtyHop data.  Notice that the folks at the Miami-Dade County have conveniently broken down what they feel is the market value, how much is based on land, and how much is based on the “improvements” to the land (hint: the house sitting on the land is the improvement).

So What Am I Allowed to Depreciate?

After consulting with several experienced landlords, it seems everyone does things a little differently.  Some people downright ignore this land issue and depreciate the entire $780K.  However, that is almost certainly illegal.  The proper approach is to try to tease out the value of the house itself, aka the improvements, by assigning some value to the land and the rest to the house.  In our Golden Glades example above, the county assigned $257,315 of value to the land.  Perhaps that means the remainder of the purchase price must be the house, a simple subtraction.

Yikes, but is that correct?  Remember, these valuations are based on the most recent transaction of $400K a few years ago.  Now the asking price is much higher — is it because the seller is a home flipper who put in tons of sweat equity, upgrades, and renovations to add $380K in value?  Or do you need to equally scale the ratio of the land and house valuations?  The IRS actually gives us some depreciation guidance for separating land and home, but it’s not for the faint of heart (emphasis added).

They proceed with an example:

Back to our Golden Glades home, the fair market value of our ratio seems to be $165,715/$423,030 = 39.2%.   Meaning the cost basis we can depreciate for the house is only 39.2% of what we originally calculated above.  Darn.

Things get a little more optimistic, or complicated, because Miami actually quotes a different number for assessed value and market value.  Look up the address on their county assessor website and you will see the assessed value in 2023 is only $305,786, with no breakdown given between land and home.  This is due to some local rule called the “Save Our Homes Homestead Cap“.  We also see a wildly fluctuating ratio between home and land in their 2021-2023 data, meaning the IRS suggestion to use a constant FMV ratio based on your purchase date is somewhat dubious.

In the future, we may cover solutions to this problem, including itemizing improvements and putting renovations on their own separate depreciation schedules from the rest of the house.  We can also look at various ways to interpret assessment cap situations such as the one in Florida and other state and local adjustments.

The post Which Is More Valuable, The Land Or The Building? appeared first on CitySignal.

But for renters looking to take their first step towards buying, is it possible to buy a property in Manhattan and keep your monthly payments below the current median rent? And if so, what kind of property is it possible to afford?

Current median rent and home prices in New York City

Currently, in NYC, the median rent for a one-bedroom apartment is $4,125. On the other hand, the median list price for a one-bedroom apartment is $1.6M.

The two numbers don’t translate. Estimating a 7.29% 30-year fixed mortgage rate, a $771 HOA fee, $125 for homeowner’s insurance, and a 20% down payment, purchasing a $1.6M home would have the monthly costs fall around $9,663, more than double what the median rent cost is currently.

Shopping for a home with monthlies under the median rent price

As home buyers everywhere know, once one starts looking into the specifics of a home, that monthly payment number will fluctuate depending on the HOA or taxes, as well as the actual mortgage rate. But it’s clear from the beginning that the average one-bedroom rent is nowhere near the average one-bedroom purchase price.

If a homebuyer was looking to keep their monthly payments below the median one-bed rent, they’d have to drop their shopping price drastically.

Using the same mortgage rate (7.29%), down payment, and maintenance & HOA costs as above, a homebuyer can purchase a $585,000 home in Manhattan to keep the monthly payments at around $4,101

So, what are some of the options for a homebuyer who wants to buy and stay under the median rent? With the below, we will assume $125 for homeowners insurance, a 7.29% interest rate on a 30-year fixed mortgage, and a 20% down payment and allow a mortgage calculator to do the heavy listing…er lifting.

Upper West Side

Address: 415 Central Park W #1D

Rooms: 1 bed/1 bath

List price: $550,000

Type: Co-op

HOA Dues: $450

Taxes: None listed

Monthly payment: $3,589

Heavy on the amenities, this full-service pre-war doorman building with a beautifully restored lobby with stained glass, a 24-hour doorman, a live-in super, a windowed laundry room on the ground floor, a playroom, and a bike room is home to a 490sqft apartment with low monthly dues. While small on space, living on the park near 101st Street may be ideal, especially if one is looking to stay under the median rent for Manhattan and the Upper West Side ($4,208)

Yorkville (Upper East Side)

Address: 525 E 86th Street #1B

Rooms: 1 bed/1 bath

List price: $495,000

Type: Co-op

HOA Dues: $1,174

Taxes: None listed

Monthly payment: $4,008

Found in the cheaper cousin of the UES, this Yorkville 1-bed is located in a full-service building. With more seemingly more space than the Upper West Side option and some hefty closets, there is a bit more room to stretch your legs. The decor on the inside is a bit outdated, but nothing that can’t be spruced up.

Midtown Apartment

Address: 105 East 38th Street #1B

Rooms: 1 bed/1bath/home office

List price: $439,000

Type: Condo

HOA Dues: $1,657

Taxes: None listed

Monthly payment: $4,187

Farther downtown in Murray Hill, a Midtown neighborhood, is this condo in a landmark boutique building. There is a laundry room and an elevator, plus the unit has been updated. At 675 sqft, it’s larger than some of the other units explored.

West Village Apartment

Address: 56 Jane Street #1B

Rooms: Alcove studio(.5)/1 bath

List price: $549,000

Type: Co-op

HOA Dues: $1,035

Taxes: None listed

Monthly payment: $4,168

For this unit in a Pre-War elevator  West Village building, you are unable to get a true one-bedroom for around the median rent costs. The square footage is not made publicly available, but the unit looks small. For this, you are paying for location, not amenities or space.

Taking it out of the city: Astoria Condo Better Deal

In the summer of 2023, Astoria was named one of the hottest areas, with renters flocking to the neighborhood. New developments and unique businesses have made this area a desirable place, and some might argue that it’s more of a hotbed of culture than Manhattan. The real estate,

Address: 14-54 31st Avenue #5B

Rooms: 1 bed/1 bath

List price: $596,000

Type: Condo

HOA Dues: $281

Taxes: $243

Monthly payment: $3,915

The Sunrich Tower is a brand-new condo building with an elevator and is designed with contemporary architecture. At 505 sqft, the unit has sleek finishes, upgraded appliances, a washer and dryer in unit, large windows, and the ability to purchase a private on-site parking space.

In terms of worth over time, nearby, there is a one-bedroom unit at 14-33 31st Street estimated to be worth 20.85% more than when it sold in 2021. But don’t forget about those pesky closing costs that might make something not worth selling so soon.

How Buying in Astoria Compares to Renting

While above the median rent for the neighborhood (a one-bedroom is $2,800), this might be considered a more affordable option. However, it still pales in comparison to a two-bedroom apartment in the neighborhood that is also updated for the same price or a three-bedroom that is three times the size. With renting, there is also no worry of repair costs or smaller homeownership costs if something breaks or it’s time for an upgrade, or you just grow tired of the lifestyle.

The post Can you buy a Manhattan property under the current median rent? appeared first on CitySignal.

Less Ideal: The 401K Loan

Most readers might think we are discussing the 401k loan trick.  To be fair, borrowing against your 401k is a reasonable option.  You can take a loan penalty-free and tax-free from your pre-tax 401k, as long as you “pay yourself back with interest,” as they say.

That point of paying yourself back with interest is entirely confusing to almost everyone and even the so-called financial experts tend to get it wrong.  Yes, you have to pay back what you borrowed, but that’s just taking the money you got up front and putting it back in later.  No harm done.  You didn’t have to pay taxes or penalties on the lump sum you took out, so it’s only fair that you use post-tax dollars to pay it back later.

The interest is the weird part. Who gets the interest, your employer, your fellow employees in the plan, the IRS, or someone else?  Turns out all of those are wrong.  You get the interest!  What?!?  Yes, you actually pay the interest and it increases the balance of your account.  However, that increased balance is still considered pre-tax dollars much later on in life when you are finally required to withdraw the old-fashioned way at age 70+.

There are other disadvantages:  the loan duration is only 5 years (not the 30 you might want when buying investment or personal property).  You also can’t contribute new funds into the 401k while the loan is outstanding (although weird loopholes may apply if you have multiple jobs or already changed jobs, or have your own self-employed 401k).

You don’t get any sort of tax deduction on what you pay back, otherwise you’d be getting a tax deduction twice.  If that sounds confusing, don’t even worry about it.  It’s not important – just know that the 401k loan is a very reasonable way to tap your retirement account at a very low interest rate, but has limitations.

Very Limited: The First Time Homebuyer

Most people have heard about a penalty-free withdraw for first time homebuyers, but the limit is so low in this day and age that it’s barely worth mentioning.  You can take up to $10K out of any IRA without penalty, but you must still pay the tax.  In most parts of the country, that isn’t going to make much of a dent in the down payment.  Perhaps if they indexed this to inflation it would help a little, but it’s one of those laws that came out over a decade ago that no one seems inclined to fix.  Next.

Best Retirement Account Early Withdrawal Method: SEPP Withdrawal

For those who want to tap a large retirement account before age 59.5, there is the little known and totally legal method called SEPP Withdrawals.  SEPP stands for Substantially Equal Periodic Payments, and it is a strange IRS loophole created for savers who claim they are retiring early.  It’s also know as 72(t) payments, because it is codified in section 72(t) of the complex IRS rules governing retirement accounts.

You can start at almost any age earlier than the usual 59.5, and there would be no point to starting later because you can withdraw penalty-free the regular way.

Why is the SEPP method better than the others?

1.)  There is no arbitrarily low dollar cap on the amount you can take.  If you have a multi-million dollar balance (or in Peter Thiel’s case over a billion), then you can drain it all over the withdrawal period.

2.)  It counts as income in case you want to qualify for a loan or condo / co-op purchase.  Early retirees or those with lots of savings but difficult-to-document income can use these withdrawals as an income source for any situation that requires income but not assets.

3.) You can decide how much to take.  You don’t have to drain all of it and you can basically stop once you are 59.5 or after 5 years, whichever is later.

4.) There is no 10% early withdrawal penalty.

What’s the catch?  You are still limited to how much you can take in any given year.  It is approximately 1/30th of the amount in your retirement account per year (even less if you opt in when extremely young, say 35-45).  That’s because the rules require you to simulate a retirement that begins the day you withdraw, in lieu of the normal 60-70 age range.

Still, of all the possible methods, this is the least used and most beneficial way to tap into a large retirement account.  Best of all, the tax is staggered throughout many years, so hopefully you can optimize further by engineering a lower tax bracket during your years of withdraw.  Contrast this with the much-loved backdoor Roth IRA conversion — also an interesting technique — but one that leaves you with a huge lump sum tax bill the year you do it.

Btw, nothing stops you from taking some of these SEPP payments and spinning up a new Roth IRA or Roth 401k, a topic for next time…

The Main Downside to Every Early Withdraw

What’s the main downside to any of these methods?  Opportunity Cost.  For the past century, buy-and-hold as worked very well over any long period, and when you withdraw that money, you are likely doing so because you want to spend it.  Are you willing to give up the age-old long term stock market return of 8%?

It’s important to call out a particular group that might be hoping to withdraw early:  investors who want to beat the market using alternative asset classes.  Do you think your real estate, startup angel investing, crypto speculation, or futures and options trading has a chance of beating the market?  You might be considering taking money out of the safe and regulated world of retirement accounts to take an increased gamble.  Please don’t.  Very very few people can beat the market long term, and those that do aren’t the ones who need to tap their 401k’s for cash.

The post The Least Known Secret to Avoid IRA and 401K Early Withdrawal Penalties appeared first on CitySignal.

What’s in the new Universal Co-brokerage Agreement, and does any of it address commissions?  There are 5 distinct changes:

1.)  Commercial and retail spaces in a residential building may be listed in the REBNY RLS.

Normally, the REBNY RLS is only for residential listings (RLS == Residential Listing Service).  However, now these commercial units will be allowed in the RLS, however, they are subject to the same simultaneous advertisement rules.  If you do choose to include the listing the RLS, it must be done within 24 hours of any public marketing of the listing.  You may not put it in a commercial database for a week and then decide to widen the net using the RLS.  That would be a violation of the RLS cooperation mandate.

2.)  Coming Soon Listings

While not new for 2024, the Coming Soon listings will now be formally codified in the REBNY RLS Universal Co-brokerage Agreement.  Also, there are new rules clarifying that unsolicited offers received on a Coming Soon status listing should be presented to the seller.  However, prior to presenting any offers, the listing status must be changed to Active.

3.) Owner Opt-out Rules

Sellers and Landlords may now opt-out of the REBNY RLS by filling out some formal paperwork.  Why would they do so?  One reason would be to give a pocket listing and exclusive to the agent, but with strict instructions that they do not want any mass or public marketing done for privacy reasons.  It might be a way to give an agent a long-standing listing agreement without the pressure of accumulating a high days on market and giving the impression of a stale or undesirable home.

4.) Electronic Payments Formally Accepted

Acceptable forms of payment now include Zelle, Venmo, and other electronic funds transfers in addition to checks.

5.)  Decoupling Commissions for Broker Services

This is the big one.  It was already agree upon by REBNY in October and so far REBNY hasn’t felt like it requires any additional changes since the landmark Sitzer/Burnett suit.

First, there is no standard commission.  REBNY discourages any notion that there is a typical or mandated commission, and they are always negotiable.  Neither REBNY or the RLS fixes, controls, suggests, recommends, or maintains fees of any sort between cooperating participants on the RLS.

Offers of compensation, if any, to the buy side broker, must originate from the owner.

There is not, and never has been, a rule that REBNY prescribes a 50-50 split between cooperating brokers.  An older version of the UCBA had language that prescribes a 50-50 split only when the listing agreement between the listing broker and owner omitted any mention of compensation.  The latest version has removed these provisions.

The post REBNY Changes Their Universal Co-Brokerage Agreement appeared first on CitySignal.

Spanning from the north side of West 70th Street to the south side of West 79th Street, the West End Collegiate-Historic District is known for its breathtaking architecture dating back to the 19th century. This area offers a close-knit community at the forefront of art and culture, where business owners know their patrons and where real estate brokers live where they sell. 

A rich architectural history 

In the mid-1880s, real estate developers and property owners employed prominent NYC architects to design buildings, particularly single-family row houses and townhouses. By the 1890s, apartment living in NYC became more popular, leading to the development of “French flats” that contained multiple units in one building and often had an elevator. The addition of the subway to the Upper West Side in 1904 popularized the area and led to schools, churches, clubs, and larger residential buildings with as many as 20 stories being built. 

Many of the buildings in this area today are historic buildings that have been converted into condominiums or apartments and renovated. However, new rental laws in 2019 made it nearly impossible to convert historic buildings, so the market for older, renovated houses is now more competitive. 

Old-world charm with modern convenience

Recently this neighborhood has grown in popularity over the past few years as New York has experienced a “tech boom.” While it may be expected that these workers would live downtown in trendy neighborhoods such as the East Village, TriBeCa, or Chelsea, many of them are seeking the confluence of quiet and convenience that is offered in the West End Collegiate-Historic District. 

Louise Phillips Forbes, leader of sales at 393 West End Avenue and longtime Upper West Side resident, shared that the neighborhood has such an allure because it offers “intimacy and [a] quiet neighborhood with access to the pulse of the city.” There is quick and easy access to the 1, 2, and 3 trains, giving residents quick commutes to their office jobs, while still offering reprieve from the noisy midtown area. In fact, many tech buyers flock to residences such as 393 West End Avenue (from 2021-2022, 22 of the condo’s sales went to tech buyers), where they can enjoy modern conveniences and amenities in the luxury and beauty of a restored pre-war building. 

A lively neighborhood

According to Forbes, “there is an intimacy and friendliness that you don’t always experience” in New York City in the West End Collegiate-Historic District. Within this neighborhood, many neighbors and residents know each other, and shop and restaurant owners remember patrons who visit frequently.  

Though the West End Collegiate-Historic District is quiet and laid-back, residents enjoy the many local restaurants and proximity to parks and recreational spaces such as Central Park or the nearby Hudson River Greenway, which offers paths for cyclists, skateboarders, and runners, as well as basketball and tennis courts, baseball diamonds, and dog runs. For artistically minded folks, there is just a short walk to Lincoln Center, the Natural History Museum, the American Folk Art Museum, and the many architectural additions. 

While NYC is packed with restaurants, the areas near the West End Collegiate-Historic district are quickly growing to become a food capital of the city, with streets like Amsterdam Avenue becoming a new “restaurant row.” The development of the neighborhood can be seen in the example of Salumeria Rosi, an Italian restaurant and salumi shop owned by Andrea Loscalzo. Andrea has a background in the tech world but left the industry to pursue the restaurant industry. Andrea also opened The Wallace Lounge, a swanky spot for small bites in the Wallace Hotel. While some tech workers move to the neighborhood to enjoy the quiet atmosphere and rich community, some fall in love with other pursuits and settle down for a lifetime in this unique neighborhood. 

When thinking of the West End Collegiate-Historic Districts allure, Louise brought up the iconic Levain Bakery. Louise knows the founders of the bakery and reminisced on their meeting, saying, “I met them when they were making homemade bread when they stumbled upon the quarter-pound chocolate chip cookie.” At restaurants around the neighborhood, Louise says that the restaurant owners and staff “know your name.” New York City can turn into a land of overpopulated anonymity, with solitude being found in crowds of strangers, but in the West End Collegiate-Historic District, there is a community of individuals that know each other intimately and grow together through years spent in New York City. This community and intimacy found in the neighborhood is what continues to draw new residents to the area and keep long-term residents happy. 

Notable Architectural Marvels in the West End Collegiate-Historic District

393 West End Ave

While there are many converted pre-war buildings in the neighborhood, one of the last converted residences is 393 West End Ave due to the rental restriction laws.

A 96-year-old building originally built by architects Goldner & Goldner, 393 West End Ave has been renovated with what Forbes calls a “respect for history” by award-winning CetraRuddy Architecture. The historic exterior is echoed through the interior despite having modern updates and matches the Upper West Side’s acclaimed rowhouses and apartment buildings.

There are antique bronze doors with distinctive lion medallions, lantern ironwork, and plaster tassels and a scalloped cornice referencing the great opera houses of the era. 

The Apthorp

This historic condominium building was designed by architects Clinton & Russell for William Astor and was constructed in 1908. Known for its Italian Renaissance Revival Architecture, it occupies an entire block, with wrought-iron gates marking the entrance to the property. With limestone sculptures and an impeccable interior courtyard, this impressive building has been home to notable figures such as Cindy Lauper, Robert De Niro, and Al Pacino. 

Three Riverside Drive

Once the residence of William Guggenheim, this iconic building was constructed in 1895 and is a must-visit for any architectural tour of the area, C.P.H. Gilbert designed the 37-foot wide, ornate limestone mansion.

The Willard 

The Willard at 252 West 76th Street is a pre-war building that is popular amongst many new residents of the area due to its many amenities, such as a fitness center, a playroom for children, a bike room, storage, and an elevator.

This building combines convenience and beauty, reflecting the duality of the surrounding neighborhood. 

Alfie Arms

This sprawling building is an “elegant brick, limestone and terra-cotta co-op built in the Neo-Classical style by Sugarman, Hess & Berger in 1923.” This restored co-op building attracts young buyers from the tech world and growing families, offering a mix of uptown luxury with contemporary updates such as stainless steel appliances, wine refrigerators, and in-unit laundry. 

The West End Collegiate-Historic District may be tucked away in NYC, but should not be underestimated. It has a way of making the big city feel like a small town. 

The post West End Collegiate-Historic District Neighborhood Guide: The Architectural and Artistic Neighborhood appeared first on CitySignal.

The rental forecast for commercial spaces remains grim as city officials warn Manhattan’s abnormally high vacancy rate should persist well into 2026. As of August 2023, Manhattan is currently at 22.7% office vacancy with little hope of recovery anytime soon.

New York City commercial vacancy rates typically hover at a steady 11%, but as the pandemic continued into the early 2020s, those rates climbed to 15% and beyond. Currently, the national average for 2023’s first quarter is 18.6%, with cities like Denver and Seattle squarely at 20% vacant.

For many, these vacancies hit close to home- shuttered bodegas, struggling independent shops, and the loss of retail storefronts continues to alter the dynamic of neighborhoods throughout the city. Look closer, and empty offices bleed into transport as well; rush hour subways are only half full, a far departure from an overcrowded past.

Lower and midtown Manhattan and downtown Brooklyn have seen the highest turnover and climb in vacancy rate changes to speak of. Despite receiving the most COVID-19 grant and loan money, businesses and offices continue to empty out.

Manhattan’s Troubled Rental Landscape

Spikes in vacancy affect not only landlords and building owners but the city as well. One of New York’s most important revenue sources is property taxes. Nearly 20% of New York City’s total tax revenue comes from commercial property taxes, with 10% attributed straight to office building rentals. In the first quarter of 2023, 4.6 million square feet were leased in the city, while asking rents for offices in NYC were priced at $78.35 per square foot. In April 2023, the price was at an average of $75.13 per square foot, down 50 cents in a YoY comparison, according to a Colliers market report.

Officials estimate that over half of Manhattan’s 450 million square feet of office inventory is practically obsolete.

Manhattan isn’t an easy place to open a business. Especially for family-owned shops, the regulatory hoops, and hurdles of rising rent, taxes, and industry competition challenge even the most genuine intentions. Inflation has taken its toll and led to genuine change across the city landscape. Take a walk down Third Avenue in midtown and you can see for yourself. Empty storefronts and boarded windows have sucked the magic out of New York’s once-energizing presence.

How Much NYC Office Space Is Actually Being Used? How Much Is Under Construction?

A major contributing factor to vacancies is the underperformance of aged commercial spaces. The shift into remote working left many businesses reconsidering their needs and desires for office space. Pandemic downtime made room for major remodels and full or partial fit-outs as companies dreamed of an eventual return to normalcy. The demand for older buildings- many with poor energy performance and outdated design- began to plummet, leaving skyscrapers and roadside shops alike empty around the city.

Officials estimate that over half of Manhattan’s 450 million square feet of office inventory is practically obsolete. Newer buildings with energy-efficient systems are more desirable to renters than older buildings. With 14 million square feet of modern office space under construction, it’s anticipated tenants of older buildings will continue trickling into newer energy-efficient builds long past the vacancy crisis.

Remote Work Is a Major Contributor To the Decline In Commercial Building Values

Recent studies highlight remote work as a major factor in declining building values. Estimates blame the shift into remote work for cutting building values by half. What was once a temporary fix has become the norm. This trend is not unique to New York alone; nationwide, businesses and landlords struggle to find a solution to emptying spaces.

“We now estimate a more persistent work-from-home regime, which has more of an impairment of office values even in the long run,” Arpit Gupta, co-author of the study, “Work From Home and the Office Real Estate Apocalypse.” told The Real Deal.

Post-pandemic rates of office return have reached no higher than 50%, severely lower than anticipated and hoped for by employers and landlords alike. Because of this, official estimates that NYC office stock loss would be 28% have been updated to reflect a 44% loss in value. New York has been on track to recover by the second quarter, with 1 million jobs lost due to the pandemic shutdown, but this is not reflected in local rental markets.

A major decline in worker spending is another backlash stinging local business. Without workers traveling to their offices, who will buy coffee, lunch, and run errands nearby? Less commuting means less commuter-based revenue; workers have spent $12.4 billion less annually compared to pre-2019.

Landlords are defaulting on loan payments. With more than $16 billion in loans due this year, many landlords are in a bind for alternative cash flow as renters continue to dwindle. The Fed’s rising interest rates and tight lending standards jeopardize the ability for older office buildings to refinance, ultimately putting their ownership at stake. Nationally, this is a loss of $506.3 billion in value and has affected the state of local public finances.

Commercial East Village and Lower East Side Hardest Hit From Pandemic

The residential market has also experienced a major shift from the old norm. The residential vacancy rate is currently above 2%, where it has stood for nine consecutive months. The highest vacancies are concentrated within the East Village and Lower East Side with a rate of 3.25% compared to the lowest in the Upper East Side at 1.34%. That said, close to 3,704 new leases were signed in Manhattan by February 2023 compared to 1,000 in Brooklyn.

“In Manhattan, the vacancy rate ticked up from January to February as apartments took longer to find tenants and leasing activity slowed. These are all positive signs for apartment seekers,” says Chief Operating Officer Gary Malin of The Corcoran Group. “However, the median rent has remained unchanged since October 2022, which shows that owners still remain hesitant to reduce pricing.”

The median rent in Manhattan was $4,200 monthly as of February, unchanged since late 2022. Pricing is 12% higher than in February of 2022, making average rent higher than last year. In contrast, the median rent in Brooklyn was $3,500 a month in February 2023.
“Meanwhile, in Brooklyn, rents in February cooled just enough to encourage tenants to take action. In contrast to Manhattan, the number of signed leases in the borough increased monthly, hitting 1,000 for the first time since November.”

Sadly, areas with the highest concentration of low-income residents face higher vacancy rates than elsewhere as businesses and landlords struggle to maintain profit margins that are quickly falling out of reach.

What Is The Status of NYC’s Housing Affordability?

The 2021 Housing and Vacancy Survey, collected every 3 years, summarized the state of the rental landscape throughout the boroughs. The most recent report confronted increases in New York apartment vacancies since 2021. Rent regulation can be drastically affected by these numbers, and rates of 5% and higher constitute an official “housing emergency.”
These surveys help representatives defend low-income residents and their rights. Members of CHIP (Community Housing Improvement Program) have challenged the city’s rent stabilization laws in court. Low-cost apartments appear on the outs as the city lost 96,000 units at $1,500 or less since 2017.

But many are fighting. Vacancies in commercial space have advocates looking at new opportunities for affordable apartments and urban housing. Real estate groups, urbanists, and market experts wonder at the possibility of reinventing Manhattan and Brooklyn. Older buildings, in particular, seem nearly perfect for housing conversion.

“Landlords are being very creative trying to improve their buildings, amenitize their buildings, improve the air quality systems,” said Peter Riguardi, chair and president of real estate services firm JLL’s New York tri-state region. “But at this point, without any unforeseen change, there’s still going to be some empty [office] space when we cycle through this, and some of those buildings are going to be ripe for conversion to residential.”

Still, hurdles persist as Albany failed to pass legislation helping with the conversion of office buildings to residential use, stoking the anxiety of many. In some cases, banks may eventually gain ownership of the building should loans go unpaid. As affordable housing continues to slip away, many wonder at the persistent inflation present in rent prices but absent in wages.

In the last year, the city gained 107,000 units with rents of $2,300 and up, bringing the median asking rent of vacant apartments to $2,750 in 2022, up 46% from 2017. To afford this, a household would need to earn $110,000 or more. The 2021 survey found over 50% of renters paid upwards of 30% of their income toward rent. This severe rent burden signals an affordability crisis that is pinching the lowest earners in the city.

As buildings continue to empty and New York’s population continues to increase, pressure is mounting on the affordable housing market. As of July 2023, there are 8.948 million inhabitants, up 0.37% from last year.

The high vacancy rates are not present for low-income apartments but are found for the most expensive. Deregulation of apartments from pre-2019 rent laws and the focus on high-end apartment buildings are partially to blame. Despite all this, outsiders continue to move to New York City in droves, ensuring demand never falls too low.

The post City Predicts Building Vacancy Struggle To Persist Through 2026 appeared first on CitySignal.

This neighborhood borders Prospect Park and is characterized by its local businesses, restaurants, and bars. Walking through Prospect Lefferts Gardens, you will quickly notice the beautiful architecture and tree-lined streets. This neighborhood is popular amongst growing families for its walkability, family-friendly activities, and laid-back lifestyle.

History of Prospect Lefferts Gardens

Prospect Lefferts Gardens was originally the property of farmer James Lefferts. His son, John Lefferts, invested in the Brooklyn, Flatbush, & Coney Island Railway Company in 1878, leading the neighborhood to grow exponentially due to access to transportation. Over time, the Lefferts family began to sell land for residential purposes with the notion that it was “too desirable” to be used for farming. Single-family homes began to pop up all over the neighborhood in varying styles of architecture. Today, the neighborhood reflects its residential roots, with many families choosing to settle down in the area. 

Where to Shop in Prospect Lefferts Gardens

 

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Prospect Lefferts Gardens is the perfect place to shop locally. 

Awesome Brooklyn

Awesome Brooklyn is not your average NYC gift store – this local shop has home goods, stationery, clothing, stickers, accessories, and more. Awesome is run by a couple and their daughter, Athena – the entire family is dedicated to helping you find the perfect souvenir or gift for a loved one. 

GranRU Market

This local, black-owned thrift store is founded on the principles of family, giving back to the community, and celebrating individual style. GranRU sells clothing, candles, and art created by local artists.

Greenlight Bookstore

Greenlight Bookstore is an iconic spot in Prospect Lefferts Gardens, known for community events such as Staff Storytime, where Greenlight staff members read aloud to young book lovers. Greenlight has also collaborated with GranRU Market to celebrate black literature and creatives. 

Landmarks and Notable Places of the Neighborhood

Prospect Lefferts Gardens is full of history, and its proximity to Prospect Park makes it a great place to enjoy nature. 

Lefferts Historic Home

Prospect Lefferts Gardens’ history is rooted in the Lefferts family, and their historic home has been converted into a museum. The museum inside of the 18th-century farmhouse “focuses on the lives of the people that lived and worked on the land,” including the Indigenous peoples, Dutch colonizers, and enslaved Africans. 

Brooklyn Botanic Garden

On the edge of Prospect Park is the Brooklyn Botanic Garden, the perfect spot for a long walk or romantic date. This garden provides a reprieve from city living with its rock gardens, sprawling fields of roses, and outdoor activities for children.

Brooklyn Museum

The Brooklyn Museum is NYC’s second-largest museum with permanent and seasonal exhibits. General admission for adults is $16, but with a student ID it is only $10. Those ages 19 and under get free admission! 

Where to Eat in Prospect Lefferts Gardens

 

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Prospect Lefferts Gardens has many local restaurants with a quaint, familial atmosphere. 

Loud Baby Cafe

This family-owned cafe is easy to miss (it’s tucked away on the street with little signage), but for those willing to look, a great cup of coffee can be found at Loud Baby Cafe. They also sell children’s clothes, mugs, and delicious pastries. 

Peppa’s Jerk Chicken

Serving Brooklyn since 1995, Peppa’s Jerk Chicken is located on Flatbush Avenue and is a tentpole of the Prospect Lefferts Gardens food community. The restaurant is cash-only – so be sure to bring an empty stomach and a full wallet! 

Scoops Ice Cream

Scoops Ice Cream is a local small business that is so beloved that when faced with financial hardship, the community of Prospect Lefferts Gardens rallied to save it. Scoops also has vegan options and small snacks, so anyone is sure to find a delicious treat here. 

Bars of Prospect Lefferts Gardens

 

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Prospect Lefferts Gardens may not be known for noisy clubs, but it’s a great spot to grab a cocktail or glass of wine. 

Midwood Flats

This “rustic-chic” gastropub is a great place to find local craft beers, specialty cocktails, and burgers. They also have a happy hour from 4-7PM on weekdays with $5 draft beer and $6 mixed drinks! 

& Sons Ham Bar

This small and cozy wine bar is famous for its antique flywheel slicers that produce translucent slices of American country ham. Between the hams, wines, and fine cheeses, you can build the charcuterie board of your dreams! 

Fiona’s Bar

Fiona’s Bar on Flatbush Avenue was created with comfort in mind. The cozy couches, ambient lighting, and kind staff create a familial atmosphere, and you can grab a bottle of beer for as low as $4. 

Where to Live in Prospect Lefferts Gardens

Prospect Lefferts Gardens is highly residential and has both luxury homes and affordable options. 

250 Winthrop Street

Though 250 Winthrop Street was constructed in 1901, the building is newly renovated and has one, two, and three-bedroom layouts. The units overlook greenery and have large closets and storage spaces. 

150 Hawthorne Street

This co-op building has laundry in-building, a private parking garage, a courtyard and garden, and is just a short walk away from Prospect Park. Some units also feature private outdoor space.

82 Rutland Road

This sprawling 5-bedroom single-family home is 125 years old and has a mix of historic character and modern updates. 

Traveling in Prospect Lefferts Gardens

Trains

There are four subway stops in Prospect Lefferts Gardens – Prospect Park, Parkside Avenue, Sterling Street, and Winthrop Street. You can take the A, C, or G trains to reach the neighborhood.

Buses

The B41, B43, and B44-SBS all serve Prospect Lefferts Gardens. 

Bike Rentals

Prospect Lefferts Gardens is a great place to ride a bike due to the short distance from Prospect Park. There are 21 CitiBike docks in the neighborhood, so it’s always convenient to grab a bike.

Prospect Lefferts Gardens is a highly desirable neighborhood for families and those looking to lead a quieter lifestyle while still benefiting from the culture in the city. With the Brooklyn Museum and Prospect Park so close, there is always something to do, and the local restaurants and shops keep the community strong in this historic neighborhood. 

The post Prospect Lefferts Gardens, Brooklyn Neighborhood Guide appeared first on CitySignal.