What the Coronavirus Has Done to New Development
The pandemic paused residential construction and stalled sales. Now developers in Long Island City and Greenpoint are scrambling to bounce back.
Skyline Tower, the 778-foot luxury condo building in Long Island City that looms over western Queens, was built to break records.
It is the tallest building in the borough; the most ambitious, with sales projected to exceed $1 billion; and in February the developers claimed that it was the fastest selling, with contracts signed on a quarter of its 802 units, a massive supply for a single building.
It represents the pinnacle of construction near Newtown Creek, a grimy tributary of the East River that connects the neighborhoods of Long Island City and Greenpoint, Brooklyn, two of the busiest real estate markets outside of Manhattan. Together, they have over 10,300 apartments in the works, almost 3,000 more than the mega-development Hudson Yards, according to Nancy Packes Data Services, a real estate consultancy and database provider.
But even before the coronavirus gripped New York in March, the condo market there and across the city was softening. And as the sales and rental markets cautiously reopen, many of the surefire bets that fueled the last cycle of development are being thrown into question.
Will buyers still pay top dollar for proximity to Manhattan offices they rarely use? Can developers sell tiny units in big buildings, many without outdoor space, now that building amenities are closed? With so many options on the market, what will a shrinking pool of qualified buyers and renters choose?
There may be no better proving ground for which projects will succeed or fail in a post-Covid world than what is being built in these once largely industrial neighborhoods off Newtown Creek.
The quarantine in March knocked marketing and construction timelines off track, imperiling some builders’ plans and forcing others to rethink their projects on the fly. Some builders are changing apartment floor plans to make way for home offices and decontamination rooms, and rethinking amenities that no longer make sense in close quarters. To spur sales, new discounts and promotions, like rent-to-own programs more commonly seen after the 2008 recession, are now cropping up.
And after a monthslong reprieve from endless construction, the pause has also given new life to community concerns about what should be built, and for whom, considering not only the new economic reality, but also climate change concerns around the vulnerable coastline. Read More