09 Feb 2007

Nobody’s Home – The “Carmel-ization” of Manhattan

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The weekend edition of the Wall Street Journal reports that, like San Francisco and Carmel, California, Manhattan is experiencing a steep rise of absentee property ownership by the super rich, whose pieds-Ã -terre may actually wind up being inhabited for only a few days in the course of the year.

Five-Fifteen Park Avenue has everything one could want in a Manhattan home: sprawling floor-through apartments, unobstructed views, and concierge and maid services. But on most days, the limestone and beige-brick tower at the elegant Upper East Side address lacks one thing: many of its residents.

More than half of the building’s 35 units belong to absentee owners, whose main residences stretch from Tokyo to Wichita, Kan., city deeds and mortgage documents show. Some spend little more than a few weeks a year at their apartments, say other owners and building staff.

It can feel a little empty,” says Las Vegas developer and billionaire Phillip Ruffin, who stays “a day or two” a month at his $2.8 million home at 515 Park.

Wealthy jet-setters have long maintained cozy Manhattan pieds-Ã -terre, but the city’s choicest properties are increasingly being scooped up by out-of-towners. More than 10% of Manhattan apartment sales are second-home purchases, up from about 5% eight years ago, estimates Jonathan Miller of Miller Samuel, one of Manhattan’s largest real-estate appraisal firms.

Donald Trump says that more than half the condo owners at his buildings on Central Park West and Park Avenue are part-timers. These people “may not even know the address” of their New York holdings, says Mr. Trump, but “they’d still rather own a place in New York than schlep to a hotel.”

The lavish part-time spreads underscore a shift among the wealthy, who increasingly split their time among three or four homes. The investment potential of the city’s blue-chip real estate also appeals to rich people looking to diversify their portfolios.

Developers are targeting these absentee owners by packing buildings with amenities such as housekeeping, limousine services and even dog walkers, making it simple to ease in and out of town. Maids at Ian Schrager’s 50 Gramercy Park North even will stock the fridge with groceries before the owners arrive.

But the occasional occupants are troubling to some full-time residents, who say their buildings are left depressingly hollow. And the popularity of the costly apartments helps boost Manhattan prices for everyone, draining away developers’ interest in erecting middle-class buildings on the city’s few available parcels and making one of the world’s most expensive real-estate markets even more forbidding to average buyers.

To have so many apartments sitting empty when there is an affordable-housing crisis in New York City raises a “political question,” says Mitchell Duneier, a professor of urban sociology at Princeton University.

The same trend has caused some of the most splendiferous neighborhoods in California to seem like ghost towns most days, and has been predicted to promise a new urbanism entirely lacking a middle-class. The theory is that, before very long, these once great cities will feature no conventional industries or businesses at all, having evolved purely into playgrounds and service centers for the stratespherically rich.


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