In late June, construction resumed on Pierhouse, a two-hundred-and-eighty-million-dollar condominium and hotel development at Pier 1, on the Brooklyn Heights waterfront, which straddles a FEMA-designated Special Flood Hazard Area. A public-private partnership between the city and the buildings’ developers, Pierhouse was conceived, almost a decade ago, as the epitome of Brooklyn green chic and resiliency planning. Smoky glass exteriors will be outlined with reflective limestone fins, a combination that lends depictions of the completed complex the appearance of a Cayman beach resort. In exchange for a ninety-seven-year land lease from the city which offers unobstructed views of lower Manhattan and the Brooklyn Bridge, the development will help to finance the Brooklyn Bridge Park, an eighty-five-acre green space and bulwark against flooding that, though open to the public, looks a lot like a spectacularly large and lushly landscaped private lawn.
Work on the project had been partially halted in early June, after a local group called Save the View Now filed a motion complaining that the condo’s builder had exceeded the approved hundred-foot height limit by thirty feet. As the Web site Curbed reported, Jennifer Donaker, a pro-bono legal advocate for the group, described the view of the Brooklyn Bridge as having been taken “from the public” and sold “to the highest bidder.” At issue were the building’s mechanical systems, which had, after Superstorm Sandy, been moved to the roof. Two large bulkheads now obstructed the old sightlines from the Promenade to one end of the Bridge, creating the sort of blocked view one might have from behind a tall man with a top hat. Though he agreed with Save the View Now in spirit, Justice Lawrence S. Knipel of the State Supreme Court ruled that, according to the letter of the law, the “appurtenances,” as he called them, did not count toward the official height, leaving open an obscenely remunerative loophole.
Pierhouse is not the only luxury housing going up along the waterfront and infuriating neighbors. Since 2002, when Mayor Bloomberg announced his citywide waterfront-revitalization plan, a veritable flood of high-end condo and apartment developments have broken ground or been completed. One Brooklyn Bridge Park, a 1928 warehouse building that was converted to condos in 2007, is just a few piers down the harbor. (Living there is “one-derful,” according to its Web site.) The Howard Hughes Corporation, which has been struggling for years to successfully develop the deteriorating South Street Seaport, has proposed a controversial luxury tower for Pier 17, a site heavily damaged by Sandy. Eliot Spitzer, the disgraced former governor, has entered the game with his family’s real-estate business. Last month, Spitzer Enterprises released a plan for a seven-hundred-million-dollar residential complex just south of the Williamsburg Bridge, which Eran Chen, the project’s architect, described as a “molded iceberg, sculpted to create the maximum number of views and outdoor spaces.” Neighbors think it looks like stacks of boxes.
It is no real surprise, of course, that waterfront property and its attendant views are coveted in New York, as they are coveted everywhere, and that people are willing to fight over them to the death (or to bankruptcy—whatever comes first). What may come as a surprise is that developers and owners are so willing to build right on the water in a time of accelerating climate change. Don’t they remember the car-toppling surges and multi-block blackouts? The crippled subway system? The swaying, broken crane? The luxury real-estate boom is so counterintuitive that climate-change deniers, like John Nolte, of Breitbart, have tried to use it as proof that climate change must be a hoax. “Even if you believe there’s the slightest chance your investment will be wiped out, you don’t risk millions,” Nolte wrote in February. (Was he conveniently forgetting the collapse of Lehman Brothers and Bear Stearns?)
The bubble analogy fits the current boom in shore-front building uncomfortably well. Just as the world was overwhelmed by a flood of capital inflows—too much money seeking too few investment opportunities—in the run-up to the 2008 crash, the New York real-estate market is struggling to absorb a surge of wealthy buyers. High-net-worth transplants, real-estate opportunity funds, and ultra-wealthy foreign investors have poured into the city economy. As Gabriele Sewtz, a real-estate agent at the firm Urban Compass and the owner of a Park Slope brownstone (average elevation above sea level: ninety-three feet), put it to me, “Everybody’s going to build wherever they can, every inch. It’s just a question of mechanicals and structural engineering…. Unless we are permanently underwater, I don’t think there will be much change.”
Perhaps not as obvious, but increasingly relevant to the shoreline’s frothy market, is the liquidity of buyers who can afford luxury condos. According to the New York City Panel on Climate Change’s 2015 report, sea-level rise is expected to increase between eleven and twenty-one inches by 2050. By 2100, the worst-case projection has the water six feet higher than in the early aughts. These numbers sound scary if you’re planning on staying in a waterfront unit for the length of a typical thirty-year mortgage, but they’re less scary (at least from a financial perspective) if you think you will be transferred back to London in five years. “I call it the musical-chairs version of investment,” Steve Thompson, a founder of Climate Realty, a company that consults with developers and owners on the investment risks posed by climate change, said. “Squeeze another mortgage into this cycle and the next person can worry about it.”
From the city’s perspective, luxury high-rise construction, even in risky areas, is overwhelmingly lucrative. Real-estate taxes accounted for roughly twenty billion dollars, or forty per cent, of the city’s local tax collections last year, a significantly higher percentage than even income taxes. The mansion tax and transfer fees incentivize zoning that encourages churn. It is not unreasonable to think of the city as a wildly successful real-estate company that is beholden to its shareholders, who vote. Though of interest to city residents who are concerned about pollution, social justice, and the environment, Mayor Bill de Blasio’s recent sustainability and resiliency plan, “One New York,” is, above all, a marketing document, signalling to global investors that the city is preparing for disaster and contingency, as any reputable company would. When seen in this light, the estimated ten-billion-dollar price tag on a New York City system of sea walls can start to look like a relative bargain.
Though it strikes many as crass and unaccountably reckless, the city’s waterfront-revitalization plan is, from a risk perspective, surprisingly prudent. Land that would have been developed come hell or high water (as the saying goes) is developed to its maximum of area and value. Public waterfront parks are impeccably maintained with dependable, increasing land-use rents. Shorelines are privately (and literally) shored up. When a disaster does strike, as it inevitably will, the owner of a luxury condo is less likely than a middle-class mortgage holder to lose everything, assuming the owner is in residence at all (some high-rise buildings in the city have only a sixty-per-cent owner occupancy at any given time), and more likely to have purchased the full complement of available insurance. Federal money can be used to rebuild flooded roadways and municipal buildings—and to help out city residents who are not as wealthy as condo owners.
“The rich are different from you and me,” as F. Scott Fitzgerald so famously put it. During the first ten weeks that Pierhouse properties were on sale, only a year after Hurricane Sandy, the prices increased six times, like a wildly successful initial public offering. At more than twenty-five hundred dollars a square foot, certain units in the building have moved for more than any real estate ever sold in Brooklyn. Perhaps, rather than complain that the Brooklyn Bridge views were sold off to the highest bidder, Save the View Now should have complained that they were not sold for nearly enough.
