This week NY Mag takes a harrowing look at the Williamsburg condo implosion—harrowing, that is, if you're a developer who's losing your shirt because nobody's buying the luxury units you started building before the economic collapse. The in-depth article highlights how the city's requirement that all new buildings, no matter how small, devote 20 percent of their units to affordable housing, backfired.
Broker David Maundrell explains: "'That 20 percent? It’s a developer’s profits. What the city did is they forced all these guys to take down the existing building and drive the pile'—in other words, to rush construction far enough along that the development would not be subject to the new rules. 'Most of them did it with their own money, or they took a hard-money loan at some outrageous interest rate. Well, that was just as the banks stopped lending. It was like Armageddon. You had the city looming, you had to take down your old building, and then—poof!—there was no money...So here we are, everyone asking the same question: What the hell is going to happen?'"
Well, one result is that smaller developers like Bushwick's Jamie Wiseman are picking up the pieces. He tells NY Mag, "The biggest difference between us and most of the developers out there is we’re not building apartments based on the fantasy that Williamsburg is where bankers want to live. Basically, what we’re doing is creating places for the people who live here now."