Everything Is Fucked: Over 70% of New Brooklyn Home Sales Are to Bankers and Foreign Investors
This Bushwick row house was snapped up by an Australian investor. There goes the neighborhood!
Ruth Fremson c/o nytimes.com
We all know Brooklyn real estate is fucked. We write about it pretty much all the time. But did you know just how fucked it is? And did you know for sure why it’s so fucked? I mean, maybe you thought it had something to do with investment bankers and hedge fund guys and those Russian billionaires that Bloomberg has long courted, but you couldn’t be certain. Well, guess what? You don’t have to wonder any longer if the streets of Brooklyn are actually full of wealthy Australians, or if it’s all nothing more than a fever dream caused by that night you took three Benadryl and passed out on your couch while watching Picnic at Hanging Rock. This is all real, the Australian invasion has begun.
The New York Times reports—in an article ominously titled “G’Day, Bushwick”—that, in the last year, just as “the median price of a home in Brooklyn climbed nearly 12 percent” and “highly desirable one-family brownstones in Brooklyn have leapt almost 40 percent… to a median price of $1.6 million,” Australian investment groups representing bankers and hedge fund operatives, have purchased hundreds of homes in Brooklyn (as well as Queens and Jersey City), so that they can invest in properties that will provide “steady, dividend-like returns…earned by renting out the homes.” But it’s not just the Australians! It’s really just all rich people. The Times spoke with a broker at real estate firm Douglas Elliman, who said, “By the spring, maybe 70 percent of the sales we were seeing were to hedge funds, investors and others taking advantage of what was happening in Brooklyn.”
Which, shit. We’re all kind of fucked then, aren’t we? When only 30% of homes are being purchased by people who will actually be living there, what you’ve got is a neighborhood run by groups of out-of-touch landlords whose interests lie only in preserving their investments, not in preserving and promoting the community. This is especially troubling because, as the Times article points out, some of these investment groups are going into neighborhoods that have been hit hard by the recession, where home prices are still relatively low, and buying up properties that might otherwise have been bought by people who see these neighborhoods as places to live, not just places to turn a profit.
There’s always a lot of chatter about gentrification being the greatest evil visited upon Brooklyn in the last couple of decades. But this type of land grab isn’t simply about gentrification. The kind of gentrification usually complained about is a gradual process, and one with organic origins, which even if it doesn’t always result in benign changes, many of the people (not all, but many) labeled as gentrifiers have a genuine desire to live in the areas to which they move. This is not the case with these types of investors, who see nothing but a bottom line, and care nothing for the places and the people who they are affecting by buying up properties indiscriminately. At the end of the Times piece, one of the Australian investors mentions that the only thing that could go wrong with all of his acquisitions is that crime could go up, and then his investments wouldn’t be as sound as he’d thought. There’s no thought about what a rising crime level would mean for the people of the neighborhood, or the well-being of the city as a whole. All that matters is the money. And so now huge swaths of Brooklyn will be owned by these foreign investors who only see the bottom line, and nothing else. There goes the neighborhood. Fuck.
Follow Kristin Iversen on twitter @kmiversen
