A recent Youtube video on New York City’s “Billionares’ Row” (a smattering of very expensive buildings at the northern edge of midtown Manhattan) has received over six million views. Much of the video is rather propagandistic: it uses perjorative terms like “loopholes” to describe how the supertalls on Billionaires’ Row complied with zoning codes. The video relied heavily on sources such as socialist Sam Stein (who generally opposes market-rate housing). Having said that, this video does contain some interesting information.
In particular, the video points out that to the extent that the condos in these buildings are vacant, it isn’t necessarily because the owners are treating them as wealth storage units. Instead, the video claims that 44 percent of the units haven’t even been sold yet: the owners of the building are waiting for prices to rise a bit more before finding a buyer.
However, this data may be far less scandalous than it seems at first glance. Some of the buildings with the fewest sales are rather new. For example, 179-unit 217 West 57th Street has had only 47 sales (and only six rentals) listed on Streeteasy.com- but that may have something to do with the fact that it did not open until 2020. Similarly, 111 West 57th, also built in 2020, has had only 19 sales and one rental listed on Streeteasy. (I wonder, however, if there are sales or rentals not listed on Streeteasy).
By contrast, 157 West 57th Street, built in 2013, has had 213 sales- more than twice the number of units in the building; thus, the average unit in 157 has been not only sold but resold.
What about the units that are owned by owners? Here we are still short of information. The video says that in the “Billionaires’ Row” zip code (10019, which includes most of the west side of Manhattan between 52nd and 59th Streets) 46 percent of units are occupied by their owners. However, the Billionaires’ Row buildings are a small part of this neighborhood. This zip code has over 30,000 housing units; by contrast, there are only five buildings in the zip code with over 70 stories, with (by my count) just over 600 condos.* But we don’t know if the Billionaires Row’ buildings have higher or lower levels of owner occupancy.
We also don’t know how many Billionaires’ Row condos are rented out. However, we do know that the older buildings tend to have the most rentals. In particular, there have been more rentals than condo units for 157 W. 57th (128 since 2014), indicating that rentals for this building are pretty frequent. But as noted above, the newest supertalls have had very few rentals. To me, this dichotomy suggests that like less pricey buildings, supertalls will have more renters as they age.
So you may ask: why do we care about whether a highly unusual building has 10 renters or 100? NIMBYs like to use Billionaires’ Row as an argument against new housing: they claim that new market-rate housing will be bought by foreign oligarchs who will use them as investments rather than living in them or rented to local residents. To the extent that these buildings are actually used as residence, this argument is wrong.
Having said that, the NIMBY argument is wrong for two other reasons. First, even within its neighborhood Billionaires’ Row is a tiny percentage of the housing market; as noted above, even within my 10019 zip code, supertalls condos are about 2 percent of the housing stock. Second, even if these buildings were used as homeowner-free safety deposit boxes, they would still be more socially beneficial than no housing at all. Why? Because if the new supertalls did not exist, the out-of-town billionaires might choose to bid up the price of other New York housing, rather than taking their money elsewhere.
*These buildings are 217 West 57th St., 111 West 57th, 157 West 57th, 53 West 53rd, and 220 Central Park South.