Yesterday my friend Julian had a business meeting in Manhattan, so we fired up the Robinson R44 at 0700 and headed down there. stopping at 0815 in Oxford, CT (OXC) to refuel with 100LL and coffee before proceeding straight to the city. We obtained VFR advisories from NY Approach, who handed us off to LaGuardia Tower. The controllers wanted us to fly across Long Island Sound (always fun in a single-engine piston aircraft, but especially unnerving in a helicopter without popout floats), over the “south stanchion of the Throgs Neck Bridge” and then “over the tower cab” (where the controllers sit at the top of the tower) of the LGA airport at 1500′. This is known as the Whitestone Bridge route, even though it doesn’t involve the Whitestone Bridge and isn’t on the NY Helicopter chart. From the top of the airport, we proceed to the 59th St. bridge and down towards the E. 34th St. heliport (6N5).
The heliport consists of a strip of asphalt seemingly underneath FDR drive. There are six spots marked by lines, seemingly far too close together for helicopters to park. A big Bell was on Spot 4. Spots 1, 2, and 3 were empty. They could have asked me to land on Spot 1, leaving ample space between me and the spinning Bell. Instead, they wanted us on Spot 3, right next to the $2 million Bell, loaded with jet fuel. Presumably they were trying to leave the first two spots free in case a big Sikorsky wanted to come in. I forced myself to concentrate on the painted lines, told myself that people probably do this all of the time in bigger helicopters and don’t touch rotors, and tried to banish thoughts of the spinning adjacent Bell from my mind.
Julian got out, reaching the street at about 9:20 a.m. (saving at least 1.5 hours compared to driving to Logan from his suburban house, going through security, taxing a taxi from LaGuardia, etc.). Some of my friends who live in Manhattan got in and we lifted off for a sightseeing tour down to Coney Island, over the Intrepid’s new location, around the Statue of Liberty, over Ellis Island, up the Hudson, over Central Park, and down by the United Nations and past the Brooklyn Bridge to the Downtown/Wall Street heliport (KJRB) where the R44 could be parked for a few hours. The Port Authority folks took a more realistic view of the average Robinson pilot’s likely skills and asked me to park about three pads away from the nearest other helicopter.
Julian had his meeting, so I decided to look at loft spaces to rent. I think it would be fun to have an apartment in Manhattan for trips down every couple of weeks and with high ceilings to use as a temporary photo studio. I had a list of places culled from Craig’s List and also some brokers. The high cost of New York real estate is amazing. A $4000/month apartment in New York City will either be an exquisitely crafted closet or a shabby normal-sized dwelling. The places where a visitor might conceivably say “this is a nice apartment” start at $5000/month.
What amazed me more, however, was the inefficiency of the market. Most markets for most products in the U.S. are fairly efficient. Cars that cost about the same are more or less equally nice and functional. If you spend more money at a hotel or restaurant, it is usually better than a cheaper place. Houses that are reasonably similar and reasonably close together sell for about the same price. The first apartment, at 11th and 2nd Avenue, was advertised as being a “loft” and “drenched in light from three exposures”, $3900. It was two average-sized rooms with a total of about four average-sized windows, all of which faced a central airshaft. At 11:00 am on a sunny day, it was too dark inside to read a book. It seemed like a ridiculously bad value, but the broker said confidently that it would rent at that price. Just on the other side of the island, in the West Village, she showed a couple of apartments that were actually cheaper, in a beautiful building, with a lot more light, with a view of the street instead of the airshaft, etc. Something seems badly wrong with the market if these dissimilar apartments were being offered at the same price.
The brokers themselves seemed very odd. In NYC now, they try to collect 15% of a year’s rent for their services. You would think that people with sales jobs like these would be exceptionally smooth in dealing with customers. Yet most of the brokers didn’t bother to introduce themselves and were not even curious to know my name.
Given the expense of a NY apartment and the hassle of running around the city looking at places that aren’t as advertised, you’d think that there would be a market for much better information about rental units. Apartments would be in a database, characterized by floor plan, square footage, total window area, a grading system for condition (possibly assessed by an independent appraiser), etc.
Maybe the readers in Manhattan can enlighten us as to why the process is so painful and inefficient.
[The flight back was beautiful, up the CT beach at 500′ (after watching the waterside mansions pass undernath, the back seat passenger said that he never imagined there were so many rich people in this world), sun behind us. We stopped at Lanmar in KGON to investigate their Cirrus service capabilities, ended up chatting for a long time, and proceeded back to Hanscom for a 7:15 pm arrival.]
I am not a reader in Manhattan, but I grew up there.
There is a reason a tiny apartment in one location is the same as a larger, nicer apartment in another. There is some market inefficiency because of bad information management (people are surprised to find that someone has a better apartment than theirs at the same rent), but it is primarily that there are factors at work that you cannot see in a single visit at 11am.
What is the neighborhood like at night? (A friend of mine lived a rifle shot from Times Square in a HUGE loft for under $400k, but he was 6’6″ and 280lbs, and the nighttime crack dealers and pimps never bothered him. During the day it was a fine place to walk around.)
Proximity to the subway. A park without drug dealers. Supermarket, good chinese food, and a good public school.
Obviously, you might not care about some of these things, but the common desires drive the prices.
The lack of service in Manhattan is across the board, not just rental agents. The market is huge, always moving, and they can generally make money even if they are rude.
I’ve heard that residential brokers in Manhattan do not cross-list with each other; that may be a big source of the inefficiencies you’ve observed.
It would be interesting to know if renting apts. in San Francisco is any easier being that it is so close to all the tech. startups. I will be looking for a small farm in a couple years. I have not found what I would say is a great source for that either.
Did you ever express your concern about crossing Long Island Sound to the controller?
I get the impression the commissions on property sales are probably typically much larger dollar amounts than the commissions on rentals, which may lead to many of the better agents focusing on sales.
I wonder if Manhattan residents consider the two locations of $3900 apartments to be equally desireable locations. There’s probably some price at which you could find similar contrasts between Harvard Square and East Somerville (which might have physical separation similar to those two Manhattan apartments), and if you were commuting to downtown Boston, you might not consider the orange line to be a huge disadvantage…
Phil,
I think you posted a business idea about this a while ago, but, I was wondering if you (either for revenue or to get practice hours in) have any interest in coptering a group of 2-3 from Boston-NYC (roundtrip) and if so, what price would you charge, roughly, for such a service?
“It seemed like a ridiculously bad value, but the broker said confidently that it would rent at that price. Just on the other side of the island, in the West Village, she showed a couple of apartments that were actually cheaper, in a beautiful building, with a lot more light, with a view of the street instead of the airshaft, etc. Something seems badly wrong with the market if these dissimilar apartments were being offered at the same price.”
Phil, you were tricked by an old real estate swindle. In some places, real estate agents actually keep around “dumps” that they show their buying customers first and claim are going for ridiculous prices, then proceed to show them the real houses they’re selling at “normal” prices. I’m not surprised apartment brokers do the same. As a former New Yorker, my only piece of advice is to stop looking for a Manhattan apartment because you “think it would be fun” – that will only push prices to ever more obscene levels for those that have to live there.
I’m sure the brokers are nice to their customers, but their customers are people who have apartments to rent, not the people who might want to rent them. Renters are raw material, not customers. And the last thing they want to do is to put all the information about the apartments online to let you pre-qualify them without visiting, because lots of people will end up renting an apartment that doesn’t match whatever they thought their requirements were, after visiting it and liking it.
Andy: We can’t sell charter flights to NY or anywhere else since we don’t have a Part 135 certificate (nearly as much paperwork as starting an airline). Our costs to run the R44 down and back are about 4 hours x $300/hour or $1200.
Joel: I did not mention our wimpy single-engine and no pop-out status to the controllers. They needed to keep us clear of the Runway 22 approach to KLGA and I’m not sure what else they could have done with us. Maybe they could have had us down at 200′ over the beach as is common in Los Angeles. The actual risk of the engine choosing to quit is vanishingly small; it is really just a psychological fear and now that I have an ATP I think I’m supposed to be able to conquer my fears.
Real estate nerds: I’m not a complete expert on NY neighborhoods, but I think the East Village and West Village are pretty similar in value, no? The subway connections in the West Village seem better.
The same goes for apartment sales. I have just bought the second apartment way uptown, and for the second time I am amazed at how Manhattan real estate agents are incompetent and uneducated (about the apartment and their job), and at how they cannot use electronic documents (all the forms and floor-plans are a photocopy of a photocopy of … (repeat 3 times here) … of a photocopy). The same goes for mortgage brokers and property managers.
Whenever I see a peace of real estate in New Jersey, it is listed in the central database, the agent knows about its financials, about the price history in the area, he emails me info and other photos…
I talked to an owner of a real estate agency. She told me that all Manhattan real estate agents look so glamorous because they are all (failed) actors.
…
The first apartment you saw is on 4,5,6 subway lines which connect Upper East Side and Wall St. That might explain its price, but I am not sure since the prices are so close to irrational here.
From what I understand (and I feel mildly ashamed to not be cool enough to know more about the neighborhoods) – culturally, both are in demand, but the east village slightly more than the west (unless you’re in the GLBTA crowd, in which case the opposite is true). If I were in the market for $4k apartments, I’d expect a place on 10th and 2nd ave to be roughly the same price as 10th and 7th ave, everything else being equal.
As for the Sound crossing, it seems like they gave you one of the shortest possible crossing palces, with the exception of right near the Whitestone or over Randall’s island.Also, from the heli map, it sounds like your route was very similar to the “Throgs/East River” route. What was the difference?
Isaac: The apartment in the E. Village was so shabby that I think most people would have been delighted to turn gay in order to live in the W. Village apartment instead 🙂
Philip wrote: “Maybe the readers in Manhattan can enlighten us as to why the process is so painful and inefficient.”
There are probably two major factors that make this market inefficient: 1) demand dwarfs supply and 2) imperfect information.
Different websites seem to place NYC vacancy rate (available apts to total pool ratio) at 1-3%. Manhattan (particularly the popular neighborhoods you checked out) is likely to fall on the lower side of any such cross-city availability estimate. Therefore, it’s likely that every apt in that section of the market will eventually find a renter.
I have rented three apartments in Manhattan in the last four years. Each time I dealt with inept brokers. The only reliable way I know to get a decent deal is through volume: see as many places (and as fast) as possible. Me and my current roommates saw more than 40 apartments through countless brokers in the space of one week. Yes, it was basically all we did that week. Roughly 85% of the places we saw did not meet their description (supplied by broker) or our requirements (consistently and clearly outlined to the brokers). Some brokers did not show up to appointments. Some simply lied. Information was about as far from perfect as it could get.
–Alex
PS> If possible, make friends with your building super. H/She (are there women supers?) will tell you about apartments coming up for rent and will charge a far smaller (“informal”) fee for hooking up your friends with an accepted application. It’s a beautiful way to get a great deal on a place, but by definition it only works for your friends, not really for you…
What if you just called a fun little trip with friends and got reimbursed for fuel / other costs? Or is that a no-no?
Andy: The FAA is way ahead of most pilots and has already anticipated this. The pilot may not pay less than his proportional share of the expenses. If the helicopter is rented, for example, and four people are on board, it is legal if the pilot pays 1/4 of the expense. The FAA doesn’t get into the issue of who pays for lunch or the Broadway show, so you could maybe stretch this a little bit by relieving the pilot of other trip expenses (which can be severe in Manhattan; I took two friends out for Spring Awakening and dinner at a slightly upscale restaurant; had to order “premium tickets” from the Web site because the $130 tix were in a terrible location; the whole evening cost close to $1000).
There must be some database or where does this website collect it’s data?
http://www.streeteasy.com/nyc/rentals/uws-manhattan
Phil and others,
If you ever play Pictionary and need a sure-fire winner for the word “inept”, draw a sketch of a real estate agent. They are truly some of the most inept folks out there. I know, I am one.
I have championed for years now the need for more stringent requirements to obtain a license and my pleas always fall on deaf ears.
In Virginia (my residence) a person can take a cram course in real estate principals and in less than two weeks (as long as they can then pass a fairly simple exam) they’re in! It’s that easy, and scary.
I never cease to be amazed at the all-time low levels of service that continually occur in my business.
Can’t do anything else? Become a real estate agent. From the looks of it, that’s where 95% of the agents come from.
Saddest Regards,
Mark D
NYC is one of the few markets Craigslist actually charges for because the category was overrun with brokers running multiple listings to keep their listing on top last year. One option is to pick the no-fee or by owner options that are available. But according to this article http://www.therealdeal.net/issues/MARCH_2007/1172646952.php, the deceptive on-line marketing continues. Here is the report that article mentions: http://www.housingnyc.com/html/guide/broker_info.html. The NYC market is rent controlled up to 2K I believe. For the SF market query: the SF housing prices are fairly comparable at the low medium end of the market, with the higher end being more variable, but you can quickly assess values. In SF the rent raises are set by the board, which is great, compared to NYC, but both markets have high occupancy at the moment. I’ve always sought out and found places off CL that were consistently better deals. I would try to get a place through contacts in NYC. Actually, why rent at all if you don’t have to, it’s so wearying. CL increases information for both landlords and tenants but for some reason this might benefit landlords more unless their anxious to move places. In addition to knowing about the neighborhoods, knowing the market and having guidelines — for me, say, never answering an ad w/o an address, and using Google Earth, Street and http://www.housingmaps.com/ helps save time and weed out places especially if your out of town. I’ve never had luck with rental agents anywhere, though I’m always amazed at what they’ll tell you.
In answer to your question, there’s a big psychological difference between the West Village and the East Village. The East-West divide goes all the way up the island. When I moved to NYC, I moved to the east side. I would never think of moving to the west side (it feels like a different city – the roads are in worse condition, the buildings seem more run-down on the west side. but that’s just my opinion)
What you have to remember is that NYC isn’t really a ‘big city’ as much as it’s a thousand little towns all mashed together.
The 2 Ave and 11 St place may have been riding on the younger renter(s) who want to:
1) take the short walk or 5 min bus ride of several major hospitals below 34 on the east side. A lot of Residents and Interns take these apartments. They don’t care about the view or size when 90% of their in-apartment time is spent sleeping,
2) live by “hipster” east village coolness near St Marks and the Ave A corridor,
3) walk to NYU or Copper Union.
Mark-
I have to suggest that part of the appallingly inept real estate community in New York-albeit a small part- is the responsibility of the consumer. Until they demand more, report transgressions, complain about the no list situation in the city, and flat out TELL this real estate contingent that they s—, it will remain status quo. The lions share of the blame, of course, goes to the brokers permitting their real estate salepeople to practice at all- if you find one in ten that are on top of real estate laws, properties, etc., you’ve done well.
Heya Phil, as someone who’s lived in Manhattan since 1989 except for 4 recent years in Boston, and who did a Boston search in 2002 and recently did an exhausting Manhattan search this June, I think I can lend insight.
(1) Fees: 15% is ridiculous. I was willing to pay 1 month rent like I did in Boston (=8.3% of a year’s rent). In order to gauge the market, I called brokers and asked them to show me apartments in my budget in various neighborhoods I was considering and saw lots of apartments, while having NEARLY NO INTENTION of renting them through the broker at 15% (unless they showed me something way better and cheaper than the norm). In short I used their services for free, the greedy bastards (though I did “invest” my precious time, using vacation days). No problem: I used an internet service for no-fee rentals (most not posted on Craigslist) that cost me $250/year, and looked strictly at the no fee rentals on Craigslist. So I effectively paid $250 + one wasted $75 application fee = ~1% of a year’s rent for me.
(2) Inefficiency: NYC real estate postings lack crucial information. What you REALLY need is EXACT location (whereas they usually say “West village”, or “Flatiron”, or other similarly vague terms without giving cross streets), the height of the building and floor of the apartment AND the height of surrounding buildings, and the apartment floor plan (an accurate one–I was fooled more than once by significantly incorrect floor plans) or at least some accurate indication of the exposures. You then need to have knowledge of the neighborhoods AND precise knowledge of the subway lines and stops. They simply don’t provide these, but see below…
(3) Not understanding the difference between two seemingly similar locations: The last point about subway stops cannot be underestimated. In Boston, most people have cars. Not so in Manhattan (where parking and insurance are even higher than Boston, and public transportation more extensive). An apartment 2-3 CITY blocks from multiple subway stops is MUCH more desirable to many than a place several AVENUE blocks away. I used to live 12 blocks (0.6 miles) from the nearest non-express one-line stop. It sucked. In fact I found the proximity to desirable subway entry points the single factor most correlated with price. Detail is important here–express stops are better than local stops, multiple-line access better than single-line access, and knowledge of the actual entrance location is key–believe it or not, the actual entry points are not published! The subway maps you get are too non-detailed, though there are detail maps inside the subway stations themselves with this info. E.G. the stop name may say 59th st/Lexington Ave, but those in the know realize there is an entrance at 60th and 3rd Ave (although this exit closes at 9 PM).
To address several of these issues, I used google maps hybrid and the new street view extensively, and called various owners and brokers before looking to see if they could address any of my queries before I wasted time looking… I also knew the neighborhoods and subways well and visited stops and neighborhoods I didn’t know.
As for why the brokers can get away with their rudeness and prices, it’s all supply and demand, and lack of people who care as much as you and I do (so I agree with Laurie). Whatever; I used them and didn’t pay, maybe others are starting to do same. Don’t get mad, vote with your feet.
How’s that for a detailed answer?!
As a NYC rental agent, I’ve wasted an enourmous amount of time and have continuously been used. I work on average 12 hour days and when calculated hourly I end up with about $7 an hour. I am not greedy, rather hard working and extremely motivated. I have never been lied so much or taken advantage of as I have by potential renters. I came from a sales background in fitness and got my license becuase I wanted more money to help me start my aspiring non-profit.
We are not all the same. I wish I could say the same for renters.
I’ve only had experience with real estate agents in NYC and must say that for the most part, with a few noble exceptions, they truly are the “whores of real estate”. Manipulative! Unnecessary! Unless you’re on a tight schedule then by all means try craigslist. Reiceving 10-%15 commission on a years’ rent for just showing you a couple of places is insulting and exploitative. Even if I could truly afford it (I can but it still hurts) painlessly I wouldn’t use one if I could avoid it because basically they are like drug dealers. Drug dealers take advantage of what the laws provide them and exploit those who can’t get substance X with ease. Educated? no. Smooth? yes. Similarly a real estate agent exploits your inability to see many apartments at once. Both real estate and controlled susbtances are highly desirable, and the only difference between an r’estate pimp and a dealer.is that one deals legally. Both are middlemen and for the most part disrespected. I met so many real estate agents in the past month (like 7 or 8) and only one was laid back enough to refrain from being an annoying commentator on the obvious perks in every place we saw. But he was probably stoned though.