The wave that has swept through Brooklyn neighborhoods like Williamsburg, Brooklyn Heights, and Park Slope, is poised to reach the final frontier in potential Brooklyn development: East New York. While price growth has slowed throughout most of Manhattan and Brooklyn, The median sale price in East Brooklyn (East New York, Bed-Stuy, Brownsville, Bushwick, and Crown Heights) grew 25% to approximately $500K from January 2015 to January 2016.
East New York is a residential community of roughly one square mile and as its name implies, is the easternmost point in Brooklyn. It is bounded on the north by the Queens Borough Line, Highland Park, Ridgewood, and several of the area’s historic cemeteries. The Queens neighborhoods of Woodhaven and Ozone Park lie to the east. Jamaica Bay is on the southern border, and Bushwick, Bed-Stuy, Brownsville, and Canarsie bound the neighborhood on the west. Like much of Brooklyn, the region now known as East New York has a tangled history.
Originally settled by the Jameco people, Dutch colonists arrived in the early 1600s and founded the towns of Flatbush, Bushwick, and New Lots (now a subsection of East New York). These lands fell into British hands for a while before the Revolutionary War, and even saw some action in the Battle of Brooklyn.
In 1835, a businessman from Atlanta named John Pitkin purchased the town of New Lots with visions of building a city there to rival New York. That didn’t quite pan out, and after the financial Panic of 1837, Pitkin was forced to sell much of his land. New Lots soon grew into a thriving community of mostly German immigrants, with a functional rail system which connected the area to Jamaica Bay, Williamsburg, and Flatbush, and a major transit hub in Broadway Junction. The area was eventually annexed by the City of Brooklyn. By the early 1900s, the neighborhood had become a manufacturing center, employing predominantly Italian and Jewish laborers who had moved to the area in search of work.
After the end of WWII, manufacturing decreased, and by the 1960s, many of the manufacturing jobs had evaporated. “Blockbusting” was rampant, and as Jewish and Italian families left the neighborhood, many black and Latino first-time homeowners were duped by brokers into taking on inflated mortgages that they couldn’t handle. Before long, homes fell into disrepair or were left abandoned, until there were nearly as many vacant lots as occupied ones. In a poor attempt at providing affordable housing for the area’s residents, a dozen different badly designed and ill-conceived public housing projects sprung up in the neighborhood.
Long viewed as too run-down, low-income, crime-ridden and far flung geographically to be a viable choice for developers, East New York and neighboring Brownsville are suddenly looking a lot more palatable to developers, investors, and potential homebuyers, as well as renters who have been priced out of other areas in Brooklyn. The recent rush can partially be attributed to the fact that Mayor Di Blasio has stated his intention to build affordable housing in the area. With the prospect of affordable housing and rezoning comes the inevitable stream of developers looking to land lucrative contracts with the city, for the price of including affordable units in each new development. Speculators banking on the possibility of East New York becoming the next Bushwick have swooped in en masse to grab up foreclosures and buildings on their last legs. In a community as economically depressed as East New York, there are quite a few. According to housing market analyst Jonathan Miller, there have been approximately 700 flips in the last two years, with property values doubling on average. Rising property values have also meant rising rents for many residents.
Perhaps the main reason that interest in East New York has picked up, is that it is nearly the last low-income area left where landlords and developers can make a profit. The wave that has swept the neighborhoods of Kings County has been extremely profitable for the developers and investors who have ridden it. For many, East New York just seems like the next logical step.
For potential homebuyers and renters on a relatively tight budget, particularly those who have been priced out of other areas, the situation becomes one of vision and practicality. The median sales price for homes in the area over the last 6 months is just over 336K, with an average price per square foot of $300, which ranks among the lowest in the borough, and the area is replete with spacious single and multi-family homes, ideal for potential buyers who plan to use rental income to cover a mortgage.
East New York is an area well-served by public transportation (including the LIRR), and hotspots like Bushwick and Bed-Stuy are a short train ride away. East New York is also close to Gateway National Park, and the recently developed Gateway Center Mall.
Several community initiatives have taken hold, with residents taking matters into their own hands to improve and beautify the neighborhood, and crime has gone down in the last decade to levels that are consistent with the rest of the borough. In short, East New York is a place ripe with opportunity for the homeowner who’s looking to find a diamond in the rough and make it her/his own. Despite its fraught history, East New York is growing, and it has all of the makings of a community soon to be revitalized. Please contact me at 917- 854-5069 if you would like to explore some of the housing options in East New York.