Overcrowded New York is seeing a new mansion mania as hugely wealthy individuals buy up old residences converted into ...

For the past two years or so, my daily comings and goings have taken me past a building on my Brooklyn Heights block ripped down to the studs by a developer with the ambition of returning it to the market as a five-storey brownstone for $US18 million.

Renovations are ubiquitous in Brooklyn – home improvement is as distinguishing an element here as surgically taut faces are on Park Avenue – but this project possessed a team of workmen so big it seemed as though a regional airport were under construction.

Greeting the foreman, an Irishman with intense eyes who appeared to have landed in the world of HVAC (heating, ventilation and air-conditioning systems) from the world of James Joyce, became such an integral part of my morning habit that I would worry about him on the days he wasn’t out front, poring over blueprints on the hood of his car.

When plans for the building, which included a meditation room, an elevator and a kitchen the size of a restaurant’s, were publicised this year, some who have been on the street for decades and I revelled in talking about the ludicrous obscenity of it all.

In August 2005, the Duke-Semans mansion at 1009 5th Avenue in New York was put up for sale for $US50 million. At the ...

Many of the people on my block live extremely well and very quietly, bound by a distaste for ostentation that anyone moving into a 720-square metre, seven-bedroom townhouse staged with potted boxwoods on the stoop was unlikely to regard with a similar ardour.

The issue with lavish conversions like this one – the transformation of multi-unit dwellings to single-family houses, a practice in evidence across New York City – extends beyond, of course, the threat posed to a kind of vanishing, laid-back patrician authenticity. The house about to go up for sale on my block used to contain 11 rental apartments, which lent a semblance of economic diversity to a street otherwise characterised by the blessed fortunes of the ownership class.

Its rebirth as a home for someone so extraordinarily wealthy that the merely rich would now seem to occupy a different orbit represented not only a further step in the geographic isolation of the ruling order from everyone else, but, crucially, a shrinking of the housing supply at a moment of astronomical costs.

During the past eight years, as the crisis of homelessness has intensified – there are close to 62,000 people sleeping in city shelters every night – there have been at least 260 multi-dwelling buildings in Manhattan and Brooklyn that have been turned into houses for individual families, resulting in the loss of more than 830 apartments from the market.

Prices in Chelsea the highest

This brownstone, on the Brooklyn Heights block where the writer of this piece lives, once housed 11 rental apartments. ...

In some neighbourhoods the figures are especially stark: more than a quarter of the restructurings have been in the zip codes encompassing Park Slope and Boerum Hill, according to the city’s buildings department. Since 2008 there have been more than 70 conversions in the West Village and Chelsea, Manhattan neighbourhoods one would have thought were long past the point of gentrification.

Just the other day the real estate site Apartment List released a report ranking rent prices in Chelsea as the highest in the city. A two-bedroom apartment there typically goes for more than $US6000 a month.

Debates about affordable housing have largely revolved around zoning and where density should be increased, with little attention paid to the effects of actively reducing density in many parts of the city or potentially offsetting gains of new construction. What can be done?

In most cases, when a building is converted to a townhouse meant for one family – in particular, the kind of house with a wine cellar and a lap pool – that house, in its new configuration, will generate increased property tax revenue.

The house on my block, for instance, which was bought a few years ago for more than $US6 million, is now about to be listed for just under $US16 million, with a prominent broker, Leonard Steinberg, who specialises in selling luxury apartments in Lower Manhattan.

When I asked Steinberg to whom he would be marketing the house, he said people thinking about a move to places like Greenwich or Scarsdale might be the focus – families who were looking for space of the kind they presumed was not readily available in the city; people without the forbearance or, as he put it, “imagination” to handle big renovations themselves. But, of course, suburbanites with limited creativity and vision are precisely the demographic one moves to Brooklyn to avoid.

If the special alchemy of your block feels as if it is in jeopardy – in the case of where I live, a conviviality belies the stateliness, and people gather on one another’s stoops to drink and talk as if it were a TV show – then a Robin Hood effect might as well kick in.

One option could be for the city to divert all of the additional income from those increased taxes to a fund committed to the development of more affordable housing, adding to money already funnelled from property taxes to the mission.

You might well end up with the kind of person next door living alone in 1000 square metres who outsources the distribution of donations to Christmas choirs to one of his 650 employees. But maybe you would be able to stomach it all a little more easily.

Resource: http://www.afr.com/real-estate/residential/mansion-mania-returns-to-manhattan-20161105-gsiyfr