Postby spectre000 » June 12th, 2012, 11:51 am
The good news is if the rental market crashes it only really effects the developers and banks who financed them. When the condo market collapsed it hurt thousands of homeowners directly. If rental vacanies shoot up, it likely just means lower rents for the people living in them. Some properties could foreclose as Steve Minn has been quoted on about in the media about similar large scale high rise projects. But if a property is foreclosed on, it just gets bought up cheap by a new buyer (i.e. Bigos/Galtier Plaza).
Another good thing is many of these projects aren't getting huge public subsidies. And even the projects that do get public financing, a lot of it is in the form of cleanup grants from DEED and the MetCouncil. Even the potential loss in TIF money isn't bad, as the building is still going to exist for decades to come. Galtier Plaza received $30 million in public money. But I''ll bet it generates over a million a year in property tax revenue. It sucks for the city and Port Authority having to right off the bad debt. But buildings like Galtier will be standing for another 50+ years, it's going to generate plenty of revenue in the long run.
Last edited by
spectre000 on June 12th, 2012, 4:31 pm, edited 1 time in total.