Brooklyn, one of New York City's residential boroughs, has recently seen a marked increase in the number of renters, which is driving the construction of new residence projects. According to Bloomberg, the number of renters has increased 9 percent in the past year, and many renovations and new building construction projects have cropped up around the populous neighborhoods of Brooklyn as a result.
Douglas Steiner, a local real estate mogul, recently bought numerous buildings in Williamsburg and other nearby areas, with plans to renovate and rent out the units. He is not alone in this market, as many developers are applying for construction loans for new residential projects in the area, Crain's New York Business reports.
In addition to Steiner's renovation projects, construction equipment has become a common sight in Brooklyn. The rezoning of the borough's waterfront in 2005 is playing a role in the surge of development, as this allowed for residential construction across more than 200 blocks in the Williamsburg and Greenpoint neighborhoods. In addition to the boom of residential housing construction, Brooklyn has also been the site of commercial projects, including the construction of the Barclays Center professional sports and entertainment arena.
The center is set to open this month and will be the new home of the Brooklyn Nets, otherwise known as the former New Jersey Nets professional basketball team, according to Newsday. This arena could draw even more residents to seek housing in the area, which may in turn bolster the rental market even further. Construction of the Barclays Center cost approximately $4.9 billion, but the presence of a professional sports team as well as the new venue for entertainment will likely help to improve local economy.
While the Barclays Center has certainly played a significant role in the increasing number of renters in Brooklyn, there are economic factors at play as well.
"One of the key drivers of the rental market, whether Brooklyn or nationally, has been tight credit," Jonathan Miller, president of appraiser Miller Samuel Inc. in New York, told Bloomberg. "Residential mortgage lending is one of the only forms of credit that has not seen measurable easing since the financial crisis began."
Since it is still difficult to obtain mortgages for many consumers, the appeal of rentals is working in the construction industry's favor. There has been a rapid increase in the number of initial construction permits for the borough - with the New York Department of Buildings already issuing 256 permits this year. This is the highest number of construction permits since 2008, according to Bloomberg.
