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Increase in Homelessness Affecting City Real Estate, Brokers Say

By Amy Zimmer | October 13, 2015 7:47pm
 Brokers see a rise in homelessness forcing some house hunters to alter their searches.
Brokers see a rise in homelessness forcing some house hunters to alter their searches.
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MANHATTAN — More than 57,000 adults and children slept in city shelters Thursday night, according to the most recent figures from the city's Department of Homeless Services.

Thousands more slept on the streets, in the subway system and in other public spaces.

With an affordable housing crisis, the city's shelter population is at the highest levels since the Great Depression, according to the Coalition for the Homeless advocacy group. 

New Yorkers seem increasingly concerned and frustrated: The number of 311 calls about the homeless jumped nearly 60 percent since Mayor Bill de Blasio took office, DNAinfo previously reported.  

That frustration has manifested in the real estate world.

Brokers have noticed that many of their clients are increasingly reluctant to rent or buy an apartment when they spot a homeless person nearby.

A woman looking for a rental near her job in Hell's Kitchen found a studio in a walk-up that was "just right" even though her broker Talia McKinney had to politely ask the homeless person sitting on the steps to move when they entered. But on the way out, the woman was turned off when that same homeless person returned with company and a cup asking for money on the building's stoop.

"Instead she ended up moving into a more expensive doorman building in Chelsea because she was worried about having someone enter in behind her," said McKinney, of BOND New York.

A 27-year-old who owns his own investment firm was house hunting with his younger brother and was about to buy a 1,600 square-foot loft in a full service building in Chelsea listed for $2.5 million. But after leaving the West 25th Street building, the brothers rescinded their offer.

"They saw a guy who didn't have his shirt on, who was passed out face down with a beer in hand in broad daylight," their broker Philip Scheinfeld of Miron Properties recounted.

The younger brother said he didn't feel comfortable with the thought of having his girlfriend walking there late at night.

Coverage of homelessness ramped up this summer with the New York Post's stories about people peeing on the streets, and some locals have been taking matters into their own hands, documenting what's going on in their neighborhoods.

The Murray Hill/Kips Bay Facebook group called Third & 33rd encourages users to post pictures of individuals with warnings like, "Notorious public masturbator." One of its members was then inspired to create NYC Map the Homeless, an app that lets users upload images and information on people camped out in various corners in the city.

Aramis Arjona, a broker with Mirador Real Estate, remembers that when he first got in the business about seven years ago, he would sometimes worry about panhandlers who hung around building lobbies and brownstone block corners.

If he was bringing clients around and he knew the "solicitor," he would ask them nicely to leave. If he didn't know them, he'd some times offer them a few buck to disappear for about 20 minutes, he recounted.

But lately, he feels, the tone on the street has become "more aggressive."

"I get approached at least once a day by a homeless person asking for change or food. This used to happen like once in a blue moon but now it has even affected business," he said, especially in areas like the Flatiron, Chinatown, SoHo, Washington Heights, South Bronx and area around the Barclays Center.

"I was walking by Union Square with a client, who was relocating from L.A., when suddenly a homeless person comes and starts asking us for money. The client seemed really uncomfortable, but I assured him that it wasn't a big deal and it probably wouldn't be the last time that he saw it happen," Arjona recounted.

Dan Bamberger, an independent broker in Murray Hill did a bit of amateur data crunching for his monthly newsletter to see if property values declined, mining data from the NYC Map the Homeless and cross-referencing it with real estate sales data on Streeteasy, finding comparable units in "homeless hotspots" and in buildings just a block away.

Looking at three neighborhoods, he found the difference in prices between one-bedroom apartments in the immediate vicinity of a homeless hotspot and similar unit a block away was most significant on the Upper West Side, at 12 percent.

In Murray Hill, the difference in pricing was only 1 percent, and on the Upper East Side the difference was a mere 0.2 percent.

"I just took a small data set and was trying to plant a seed," Bamberger said about his effort. "I wanted to get people thinking."

At the same time, he understood the need for services like supportive housing, which can have a positive impact on a neighborhood, he said, citing an analysis from NYU's Furman Center for Real Estate. That study found that the addition of supportive housing to house homeless families and others could increase property values when they were "conscientious" and good neighbors.

Mayor Bill de Blasio recently announced the city is spending $1 billion more on homelessness over the next four years, including $84 million directed toward outreach and programming to help bring street homeless individuals into shelters. The city is also spearheading NYC Safe, a $22 million effort designed to address mentally ill people who are prone to violence.

"We need increased investment. [Homeless people] need real services and affordable housing," said Giselle Routhier, of Coalition for the Homeless.

Websites identifying where homeless individuals are located might put the homeless at risk since data show that homeless people "tend to be victims of crime rather than perpetrators," she said. "Instead of seeing it as human tragedy, the focus continues of public nuisance."

A spokeswoman from the Department of Homeless Services added, "These anecdotal accounts only serve to further stigmatize struggling individuals. In an effort to help our fellow New Yorkers, DHS encourages the public to call 311 when they see someone in need of assistance."