Posted by Jonathan J. Miller -Saturday, March 24, 2012, 1:00 PM Comments Off
Brick Underground published an article on smoking bans in buildings a few weeks ago that continues to have legs on it – it just appeared in AM New York as well.
I am not a smoker. I’m highly allergic to smoke and tobacco. A number of relatives of mine have died from lung cancer, second hand smoke and other smoking related illnesses. I wish people wouldn’t smoke (and better able to quit) so I struggle to be neutral in my view of it’s impact on property values.
My quote on the issue for the Brick Underground piece was:
“I am not aware of any compelling studies that provide empirical evidence proving a smoking ban impacts values one way or another,” said Jonathan Miller, president and CEO of Miller Samuel, a real estate appraisal and consulting firm. “Personally, I would think such a ban would be slightly more of a help to values than a hindrance, since the number of smokers are on the decline — and the idea of selling the health benefits of a lack of secondhand smoke would be a plus.”
The policy momentum of our society has grown with the elimination of smoking on airplanes, public transportation, commercial buildings, public spaces and they all speak to the issue of invasiveness. Forcing non-smokers to breath something that has been shown to be unhealthy, even lethal, is no longer tolerated and anti-smoking public policy continues to expand.
So the issue as it relates to multi-family housing would seems to be the next shoe to drop with public policy. Perhaps that is already happening and I’m not aware of it.
Even though a smoker may own their residence and have the right to enjoy it as they see fit, the impact of their behavior moving outside their domicile (i.e. smoke permeating walls and air exchanges) would seem to be invasive and not their right.
With possibly one exception
Grandfathering. As an apartment homeowner, they may have had the right to smoke when the property was purchased and I don’t see how their bundle of rights as a property owner can be altered. They followed the rules and non-smokers who purchased during that era would be aware that there was no ban on smoking.
A new building that bans smoking from day one – that’s not a problem.
But back to the valuation issue. I think I see more potential downside to property values in the long run within buildings that allow smoking to new buyers than to a value upside in buildings that never allowed smoking from day one.
Admittedly I’m merely voicing a subjective opinion. I’m relying on the logic that societal norms will continue to move away from public smoking tolerance.
Posted by Jonathan J. Miller -Thursday, February 23, 2012, 5:49 PM 1 Comment
In one of the greatest column names ever devised during the illustrious history of the New York Times known as “The Appraisal” [wink], Elizabeth Harris, pens “Amid a Subway Project’s Dust and Noise, No Complaints About the Rent” about the war zone that is Second Avenue on the Upper East Side of Manhattan. I was on vacation when this was published earlier this week and I was forbidden to bring my laptop.
I was approached to try to take a stab at measuring the impact of the Second Avenue subway construction on the local housing market. Listen to the blasting.
Sales transactions move too slowly to capture the neighborhood impact since this is a relatively recent event of the past few years. So I looked at rents since they are smaller and more nimble.
Methodology
I divided a portion of the Upper East Side neighborhood into three zones (East 64th Street to East 96th Street) as follows:
The blocks to the east and west of Second Avenue (Third Avenue to First Avenue)
The blocks to the west of Third Avenue (to Fifth Avenue)
The blocks to the east of First Avenue (to East River)
I analyzed all the properties collected during our production of the The Elliman Report: Manhattan Rentals that actually rented in 2010 and 2011 and compared them. In a rental housing market that is seeing sharp gains in rents in the past year, I thought it would be interesting to see if there was a material difference in direction between the subway “zone” and everywhere else. I was only looking at “face” rents (the rent paid before deducting concessions) because I have more of that data.
And there was a difference.
In fact, the subway zone showed a 1.7% decline in median rent year-over-year, a 3.2% increase to the west and a 2% increase to the east. And the number of rentals in the subway zone increased 9% while the areas to the west and east fell 5.1% and increased 2% respectively over the same period suggesting that increased affordability may be attracting tenants.
Construction was supposed to be completed by 2016, but now it looks like 2018 or longer.
A gigundo transfer station…
[Courtesy: NYT]
…and trucks carrying explosives [Turn your head to left when viewing photo]…
[Courtesy: NYT]
While I was on vacation, I was contacted by Eyewitness News to discuss my numbers on camera but that wasn’t possible – although the online story includes no mention of the source of the results, the video did provide proper credit.
Thoughts
As time moves closer to completion some buyers may benefit from upside given how unpleasant some blocks are right now. The construction will likely provide downward pressure on housing prices in the near term but those along the zone will likely catch-up and perhaps even benefit from the transportation upgrade.
As a general rule, neighborhood property values tend to be higher in the west and lower in the east. It’s also possible that the price midpoint may shift further to the east than it is now once construction is completed.
Location specifics aside, additional subway access to and from the neighborhood should prove to be a tremendous asset to property owners in that area over the long run.
Posted by Jonathan J. Miller -Tuesday, November 22, 2011, 1:46 PM Comments Off
I must say I was skeptical about the new debate format but was pleasantly surprised and really enjoyedthe event. I also liked the creativity of the intro video – swingin’ around that camera.
At some point TRD pulled me aside to talk on camera, but only after web editor Lauren Elkies talked Lincoln Center security into letting TRD film outside the venue. You’d think it was #occupylincolncenter
Incidentally, The Real Deal had me on standby as they tried hard to get Lawrence Yun, chief economist of NAR to debate me (I’d love to!) but he is too protected by his trade group. He never seems to appear in public in a forum where it is understood that his views would be challenged/debated. This gatekeeper mentality is a vestige of the past. Still, he’s a smart guy who I am sure would have something to contribute. NAR has access to wonderful information – they just need to work on the “building a sense of trust” part – something not conveyed through their press release linguistics.
Posted by Jonathan J. Miller -Monday, October 10, 2011, 10:26 AM Comments Off
[courtesy of GoComics]
After the housing crash, ensuing political gridlock in Washington, unemployment / underemployment stuck at high levels and no evidence of any solution or vision out of this economic quagmire in sight, the “left” seems to have created their own “Tea Party” but frankly few outside the movement seem to understand what it’s all about. The NYC General Assembly (their name) has been mocked in the media and criticized for having no clear message.
Perhaps that’s the point.
I took a stroll around “Liberty Park” on Saturday morning to get a sense of what it was all about. I’m still not clear but I find this process of organizing fascinating. There’s a great podcast on NPR’s Planet Money that tries to find answers.
It’s amazingly quiet. No yelling or cheering – people are merely holding signs for passersby to read. The police force all pedestrians to keep walking when taking photos. The protesters aren’t allowed to use bullhorns so “facilitators” lead the speech and the crowd repeats it so all can hear. More insights on the NPR podcast.
Posted by Jonathan J. Miller -Thursday, May 7, 2009, 12:52 AM Comments Off
One of my favorite visuals when I visit San Francisco are the trolleys and street cars. When I rode a street car for the first time a few years ago, I didn’t realize that they were largely retired cars purchased from eastern cities like Newark and Philadelphia.
There seems to be a bit of a renaissance toward light rail service in many cities given their reasonable economics and limited pollution among other advantages (such as fun). This has likely been a result of the swing towards urban residential development, especially in former commercial districts and class b and c office markets. The credit boom fueled demand for residential housing in downtown markets and more need for public transportation.
With the recession, credit crunch and falling tax collections being experienced in many urban municipalities, I wonder if the opportunity for light rail expansion is already past. Transportation is always a key consideration in urban residential housing market.
Posted by Jonathan J. Miller -Thursday, June 14, 2007, 12:38 PM 3 Comments
About a month ago, we noticed a lot of equipment appearing in the yard of the house a little ways down the road and across the street. It backs up to our street and fronts an adjacent neighborhood comprised of mainly 1950’s style colonials around a cul-de-sac.
What does this have to do with real estate? Hmmmm… ok, give me a second and I’ll think of something.
A month ago, we were approached by the Revolutionary Road movie production crew to film scenes in our house for 3-4 days. They would move all of our furniture and possessions out of the house and put us up in a hotel. Of course, for the hassle, the going rate was $10,000 per day. Hey, I could suffer with the inconvenience. It would cover the late fees for the dvds my kids lost from Blockbuster last year.
Over the course of the week, we were in the running with two other houses. Ultimately, the powers that be decided to go with a house in an adjacent town because our interior condition was “too nice” and “not worn enough.” Of course I was tempted to confirm whether they had actually looked in my teenage sons’ bedrooms before they rendered the decision.
After our brush with the movie business went bust, we found out that several neighbors, closer to the main house where the movie was to be filmed, had been hired for the use of their driveways to store equipment, set up food tables for staff, store the port-a-potty truck, etc. The going rate was about $250 per day which seemed pretty cheap to me, but probably worth the bragging rights.
Our next door neighbor’s house, which has been for sale, was rented out for the actors and actresses to have a nice place to practice their lines. I don’t know what the rate was, but the owners of the house where a large portion of the filming is being done, were supposedly paid $185,000 for three months of use and were rented a large house on the waterfront.
In New York City, where there are a heck of a lot movies being filmed on any given day, there are people who actively market their properties to be used in movies. Its a whole cottage industry. In a number of the properties we have inspected for appraisals over the years, many homeowners will volunteer their experiences. Its not clear whether this type of short term property use impacts market value locally, but everyone seems to have fun talking about it.
Lately, the street in front of my house is often clogged with parked semi-tractor trailer movie production trucks and police directing traffic. Its certainly exciting but I can see it is going to get old fairly quickly.
But if Leonardo and Kate were to come over for dinner…we’ll splurge and order out pizza.
It is not uncommon for tenants and homeowners to refuse to move out or sellout to developers. They simply don’t subscribe to the argument by the developer that, besides the money, it is being done for the greater good. In order to apply pressure, the developer builds taxpayers, usually one story buildings with short term tenants that pay enough rent to cover the real estate taxes. The developer simply waits, sometimes for decades until they are able to aquire the site.
Falsetta, an executive at a real estate firm, remembers drinking just one liter of water and eating three Power Bars. Babones, a sociology professor at the University of Pittsburgh, said, “We took 10 minutes off and missed a transfer at Jamaica station so that we could use the restrooms there.â€
Babones doubted their record would be broken, but his partner said they “would come out of retirement and issue a challenge†if their record fell.
I love the convenience of the NYC subway system – I use it nearly every business day. However, I don’t know if I love it enough to ride for 24 hours straight.
Posted by Jonathan J. Miller -Wednesday, March 22, 2006, 12:01 AM Comments Off
One of the most important municipal considerations of new housing development is the adequacy of the surrounding infrastructure, specifically sewers. The rapid pace of housing development over the past several years has taxed the ability of municipalities to handle the extra volume (er..sorry). In rural areas, property owners are reluctant to bear the cost of installing new sewers, but many of the new units that come on line are higher in density, like condos, PUD’s and multifamily properties. Here’s a collection of recent news articles to illustrate the point.
Had a fun interview with Tom and Sara this morning on the always MUST watch/listen Bloomberg Surveillance. We talked housing, rentals, vacancy and inventory. An added bonus was the addition of Adam Davidson – co-founder and co-host of Planet Money... Read More
