Rhapsody in Brooklyn
Manhattan is overhyped, overpriced, and just plain over. BoCoCa is the new place to be — and to buy. Mark Martin reports from New York
For years, Manhattan has been the place to live in New York. But now it has an up-and-coming rival: Brooklyn. Flourishing across the East River are tempting homebuyers — and expats in particular — away from their former favourite area. And it is not only the prices that are drawing them, but a cultural vibrancy that the city’s central borough has lost.
While the rest of the country has experienced a drop in property prices, the city’s market has defied its many Jeremiahs by staying buoyant. As recently as August, when the sub-prime mortgage crisis was already making daily headlines, the New York Times property supplement ran a banner headline proclaiming “The Manhattan Real Estate Slump that Wasn’t”.
There are various reasons why New York has been spared a market slowdown. Hefty Wall Street bonuses is one; another is a constant influx of affluent immigrants. Both help to keep the demand for real estate high. The dollar’s weakness has also encouraged foreign buyers. Prominent among them are the British, who like the look of an exchange rate that gives them two dollars for a pound.
Jonathan Samuel, the president and CEO of Miller Samuel, New York’s largest real estate appraisal firm, says that the number of foreign buyers has risen substantially. Now, he reckons that “they probably account for between a third and 40 per cent” of all real estate transactions in the city.
A frequent traveller to London, Mr Samuel thinks his home town is especially appealing to British buyers. “We come across as a bargain relative to UK prices,” he says. And it is to Brooklyn that Britons hoping to buy into the most European – and by far the safest – big city in America should look.
For one thing, the dollar goes much further there. The average price of a Manhattan apartment in the second quarter of 2007 was a monstrous $1.46 million, according to Miller Samuel. It is hard to put a figure on how much cheaper Brooklyn is, but Mr Samuel estimates that the average price of a new development per square foot is about 35 per cent lower than in Manhattan. With older Brooklyn properties, the savings are likely to be even larger.
But price considerations aside, Manhattan just isn’t the same place any more. The vitality and excitement associated with a diverse population and small, characterful restaurants and cafés have been going the way of affordable rents and mortgages. For many well-todo immigrants, finding the New York they envisioned on the plane over here means moving to Brooklyn.
Among the city’s five boroughs, Brooklyn has been the principal beneficiary of a wave of gentrification pushed across the East River by buyers and developers priced out of Manhattan. As Mr Samuel puts it: “European buyers, when they look at New York City, are looking at either Manhattan or Brooklyn.”
The downtown Brookyn districts to have blossomed most impressively are Boerum Hill, Cobble Hill, and Carroll Gardens. These contiguous neighbourhoods are situated between the longestablished regions of Brooklyn Heights and Park Slope. It is an area sometimes collectively referred to by the acronym BoCoCa, a designation created by realtors eager to advertise a property renaissance.
Terry Naini, a vice-president at New York’s biggest firm of estate agents, Douglas Elliman, describes the area’s appeal as twofold. “Europeans are attracted by the lowaltitude architecture – you have a lot of sky here – and by the sense of community,” she says. “You have the butcher’s shop down the street, for example, and it feels more familiar than going to a huge mall, which mostly these days is what Manhattan has turned into.”
It was that urban-village feel which attracted Glen Luchford, a 38-year-old English photographer and filmmaker. He moved to Brooklyn from London three years ago, first renting in Brookyn Heights and then buying a house in Boerum Hill.
“In London,” says Glen, “I went to the same corner shop every day and never got so much as a hello in five years. In Boerum Hill, the people at my local coffee shop knew my name by day three. My neighbours came over and introduced themselves when I moved in.”
Of course, not everyone who moves to New York wants to know the neighbours. But for them there is still the reserved, patrician Upper East Side.
Glen sold his 900 sq ft West Hampstead studio for £700,000 in 2005. Last year, he bought a 4,500 sq ft, four-storey townhouse with a garden in Boerum Hill on a block that is registered with New York’s landmarks commission. For his Brooklyn home, he paid $1.95 million (about £975,000). So for roughly a third more than the price of his London studio, he got a property more than four times the size. In his new place, he can also subsidise his income by renting out the basement apartment.
In addition to its community spirit, BoCoCa offers architecture in tune with British taste. The residential buildings are predominantly row houses – three- to fourstorey brick and brownstone terrace homes with a main entrance reached via a staircase, called a stoop.
With their ornate cornices and tall sash windows, they resemble the type of period townhouse which British buyers might covet in London or Bath. It is easy to see why many an English expat would prefer living here to being filed away in the vast anonymous ziggurat that is a typical Manhattan apartment block.
The central arteries of BoCoCa are the parallel thoroughfares of Smith Street and Court Street. The past few years have seen a dense crop of boutiques, cafés, delicatessens, and restaurants sprout along the roadsides here. Smith Street is now known as Restaurant Row, and includes Saul, one of the city’s few Michelin-starred establishments.Transport into Manhattan is convenient, too. At least, it is by London standards. The subway can get you from Cobble Hill to Midtown Manhattan in 25 minutes.
“Getting away from London transport was a big incentive for moving here,” says former London resident Caroline Peatfield. A 35-year-old fashion designer, originally from Scunthorpe, Caroline used to commute from Stoke Newington to Knightsbridge, where she worked for Nicole
Farhi. The journey took 85 minutes each way, on average. That was four years ago. She now lives in Boerum Hill, her office is near Union Square in Manhattan, and commuting rarely takes up more than 45 minutes of her day.
She bought in Boerum Hill two years ago, paying $670,000 for a two-bedroom, 1,000square foot apartment taking up one floor of a row house.
“At first, I felt a twinge of regret that I wasn’t going to be in Manhattan. But the streets are quiet, and most of my English friends live nearby.”
In terms of investment, properties in BoCoCa are lowrisk. Even a severe market downturn is not going to reverse the gentrification process. Too many professionals have bought into the area for that to happen, and the infrastructure they need, such as the private schools up the road in Brooklyn Heights, is well established.
Also bolstering BoCoCa’s housing market are plans for two enormous Brooklyn developments that will flank the district. In the pipeline is a waterfront development which will include a stretch of parkland to rival any in the city, while to the east of Boerum Hill a copse of highrises called Atlantic Yards is going up. Plans for both developments include extensive office and residential construction. The scale of these projects is so great that some analysts predict that this region of Brooklyn will become a second Manhattan, giving prices a further boost.
Buying to let, however, is a shakier option. Rents haven’t kept up with the steep increase in home values. Another obstacle is that most of the apartments here tend be run as cooperatives. In the United States, a housing co-op is run as a company in which the resident home owners possess shares. The co-op board has to approve the sale of any apartment, and most co-ops do not look kindly on buyers who intend to let the property.
Still, Brooklyn is much more than a poor man’s Manhattan. Apart from anything else, why would a Brit want to leave one small island for another?
Arch rivals: above, the bridge that links Brooklyn to Manhattan. Left and right: BoCoCa’s characterful architecture and small shops