Rezoning Gowanus has been on the agenda of developers and politicians alike for a decade. As a result, investors have paid what many saw as speculative prices for land up for rezoning. And one-third of the 130 properties along the coveted, albeit polluted, Gowanus Canal have traded hands over the past decade, according to a study by DNAinfo last year. Although rezoning efforts are still in a nascent stage, prices keep climbing. For example, Kushner and SL Green Realty paid $70 million for a 140,000-square-foot property in 2014. This spring, Aby Rosen’s RFR Realty bought the parcel from them for $115 million. Meanwhile, home prices rose 7.2 percent in 2017 and are expected to increase 8.8 percent in 2018, according to Zillow. The median listing price is $1,107 per square foot.
Last month, local City Council member Brad Lander — who’s known for having cantankerous relationships with developers — took up the mantle by releasing an initial framework for the rezoning. The proposal calls for more residential and mixed-use projects along both the canal and other major arteries. It also includes Mandatory Inclusionary Housing (MIH), which requires 20 to 30 percent of units in new buildings to be set aside as affordable. (The median monthly rent for an apartment in Gowanus is $3,236, according to StreetEasy.)
Can you give a snapshot of the commercial market in Gowanus right now? I’d say demand is very, very, very high. Supply is very, very, very low. It’s a function of this limbo that the market is in from a rezoning standpoint. The transactions that have happened have been with developers who had high confidence that a rezoning was going to happen and also had patient enough capital to secure sites and wait. I think that’s going to change, but it’s going to take real specifics: information about how much FAR [floor area ratio], what the parking requirements are. Until we have that level of specificity, I don’t think people are going to be too motivated to transact.
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