The now-completed Oro Condo building in Downtown Brooklyn, once branded by the Brooklyn Paper as a "deluxe singles bar in the sky", is barely occupied.
The 40-story Oro, at 306 Gold Street near the Manhattan Bridge, is typical of new construction in hotspots like Downtown Brooklyn, Williamsburg and Long Island City, where mass rezonings have enabled the construction of new luxury residential towers.
Now, people wonder how long these condo towers will sit vacant.
All indicators are that the condo market is in serious trouble. And it's not just vacant units, but stalled projects sitting on barren lots threatening to become a nuisance for the foreseeable future.
The once-unstoppable condo boom, with its visions of a "botoxed" Brooklyn, is now a surreal landscape littered with halted projects bearing sleek names like "Edge" and "Toren".
New condo development began to taper off in 2007 with the credit crunch, which eventually froze out potential buyers. There is now a "glut of supply and no demand."
Credit problems are not solely to blame. There's also the Wall Street bust -- and a lot of those jobs may be gone for good.
Wall Street bonuses drove the housing market. Now, the tens of thousands of employees who once got those bonuses are out of work and broke. Eventually they may move out of the city, and their homes will add to the glut.
For the condo market, the worst is yet to come. Experts predict another 15 to 20% drop in value by the end of this year.
In the outer boroughs, new development was fueled by high prices in Manhattan. Now, declining Manhattan prices have undercut the outer borough market. People don't have to move to Brooklyn and Queens anymore.
For the real estate industry, a 33% cut in revenue from the financial sector is a scary prospect.
In September, Manhattan prices fell from about $1,500 or $1,600 a square foot to $1,200 or $1,300, which means a proportional drop in Brooklyn from the $700s to the $600s per square foot. Sellers holding out for more can expect no activity.
Things are worse for developers like John Catsimitidis, whose projects are stalled. Catsimitidis owns a vacant parcel on Myrtle Avenue in Downtown Brooklyn where he was supposed to begin a huge development project with commercial space and residential towers.
Now, Catsimatidis, a billionaire, has had to radically scale back due to a lack of financing.
Banks now want developers to share the risks.
Catsimatidis is weighing other options for his razed property, including Pratt or Brooklyn Law School dorms. Having an institution on board can help you get financing.
Developers are paying the price for the luxury building binge. Appraisers, pushed by owners and brokers, over-assessed the value of condo properties, which contributed to overdevelopment.
It was a bull market, and real estate was the hottest thing in town.
Councilmember Letitia James holds the pro-development Bloomberg administration responsible for the condo crisis. James sees Bloomberg has having sacrificed stable communities and disrupted long-term residents for the sake of revenue generation.
The Bloomberg administration has pushed through a historic number of massive rezonings that fueled the land speculation boom and led to overbuilding.
The city has no means to prevent this kind of imbalance.
The city argues that rezoning and investment in public infrastructure have created economic growth and more affordable housing.
In the current climate, developers are being forced to convert condo units into rentals in order to keep current on their mortgages, resulting in a permanent loss of revenue.
Government, real estate and advocate groups are currently debating possible solutions, including converting thousands of vacant condos into affordable housing, which could turn out to be a windfall for developers.
Some don't think that developers who speculated on the boom and took advantage of the 421-a tax break should get a bailout.
Others think that the city shouldn't have subsidized the developers to begin with.
For years, anyone who built housing -- regardless of how expensive -- was eligible for subsidies.
The article from Gotham Gazette:
http://www.gothamgazette.com/article/issueoftheweek/20090223/200/2836
Mayor Bloomberg and members of the city's congressional delegation have announced that $271 million in federal stimulus funds will be used to upgrade the city's transportation infrastructure.
Mayor Bloomberg, who has been silent on the MTA's doomsday budget, has called on straphangers to tell Albany they're "mad as hell" that Albany has failed to bail out the MTA.
Two of three new citywide programs for gifted and talented children will open in Brooklyn this fall, one in South Brooklyn.
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John McCain's daughter Meghan, in a 
The so called "Gang of Three" a/k/a "The Three Amigos", rides again.
