Some Hamptons home owners are ruffling feathers by renting their properties through websites such as Airbnb and HomeAway, an uncommon practice until recently.
The entrepreneurs are not only crossing neighbors concerned about a revolving door of lodgers, they are breaking laws that limit short-term rentals, the New York Times reported. They are also putting a dent in the lucrative business of brokering one- or two-month summer rentals, which can go for six-figures.
Teresa Euell of Town & Country told the Times that brokerage’s Montauk office had seen almost no rentals this year, while Josh Keeshan estimated his brokerage business was 25 percent of what it was three months ago. Brokers have reported that bargains for Hamptons rentals are hard to find this year, giving landlords the upper hand.
Homeowners in East Hampton are only allowed to rent their properties for periods of less than two weeks twice every half a year, according to the Times. Rules also govern how many unrelated adults can occupy a home.
The town has taken measures to curb the illegal rentals, such as launching a website where residents can report violations, the Times reported. [NYT] – Tom DiChristopher
The answer to rescuing New York City homeowners from their underwater mortgages lies in the use of a foreclosure-prevention tool pioneered by President Franklin Delano Roosevelt, according to Cornell University law professor and Century Foundation fellow Robert Hockett.
In response to the 1929 stock market crash and housing fallout that left millions of Americans owing more on their homes than they were worth — and the subsequent foreclosures that ruined homeowners, communities and creditors alike — FDR introduced a number of agencies that partnered with private investors to purchase underwater loans at a fair value. Among them were the Homeowners Loan Corporation — later superseded by the Federal Housing Agency and the Federal National Mortgage Association, also known as Fannie Mae. The agencies kept housing markets stable from the 1930s through the mid 2000s, after which a return to 1920s-style private finance pushed them aside and brought back a bubble and subsequent burst.
Now, the city’s power of eminent domain can be used to purchase underwater mortgages out of the private label securitized — or PLS trusts — in which they are locked, Hockett wrote.
“The city then writes the loans down much as FHA did, thereby rescuing homeowners, its own ravaged communities, its tax base and even the trust investors — who, like banker snack in the 30s, can’t do the write-downs themselves,” Hockett wrote. “The plan is necessary because the state of the city’s housing market — especially for its African-American and Latino communities — remains dire.”
Such a plan, according to Hockett, carries a sort of poetic justice, as in the past eminent domain has been infamously used to remove communities of color from their homes and neighborhoods.
“By ‘taking the loans, not the homes,’ New York will be flipping that sordid history on its head — and benefiting itself and investors as well in the bargain,” Hockett wrote. [NYDN] — Julie Strickland
From left: Kartik Desai, Lan My Do and 508 West 24th Street
Cary Tamarkin’s architecture and real estate development firm Tamarkin Company has two new partners.
In their new roles, Tamarkin staffers Kartik Desai and Lan My Do will serve as director of development and director of design, respectively. Desai will be in charge of development at the 10-story, 15-unit condominium building at 508 West 24th Street in Chelsea, and all other projects.
Do and Desai joined the firm in 2006, and worked as project managers on the sold-out condo buildings at 397 West 12th Street and 456 West 19th Street. — Mark Maurer
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A court has dismissed a claim by Town Residential that rival Douglas Elliman poached their new marketing office in a bid to get their hands on “sensitive information” about the brokerage owned by Andrew Heiberger and Joe Sitt.
Town filed a motion for a temporary restraining order after their chief marketing officer Nicole Oge moved to Elliman as a branding executive.
Nicole Oge has jumped from Town to rival Elliman, but not without causing a stir.
Oge – a one-time Mercedes Benz marketing specialist – worked at Town for three years before leaving in April.
Her departure came amidst a slew of defections from the Town brokerage following a very public dispute between the two owners that was ultimately resolved out of court.
However, in filings in New York State Supreme Court last week, Town argued that Oge was privy to sensitive company information and should be held to a two year non-compete clause.
Justice Saliann Scarpulla dismissed the suit after Kasowitz Benson Torres & Friedman LLP partner Joseph Piesco, who represented Elliman alongside associate Joshua Fulop, said Oge would have to be a “Rain Man” like Dustin Hoffman’s character in the movie.
“Town’s complaint and supporting papers did not contain a scintilla of evidence that Elliman or Oge acted improperly in any way, let alone show how Town possibly would be harmed if Oge were allowed to continue to work for Douglas Elliman” said Piesco.
Town declined to comment on the case.
Erik Horvat, 42, director of World Trade Center redevelopment at the Port Authority of New York and New Jersey, is leaving to pursue a job in the real estate industry.
Horvat is joining Fosun International, a Chinese conglomerate. He will work on establishing a platform to invest in New York City real estate and manage its operations in New York. Fosun bought One Chase Manhattan Plaza for $725 million last year. Horvat’s first assignment will be renovating and leasing that 60-story, 2.2 million-square-feet building.
“I’ll be tasked with repositioning that asset and growing their business here,” Horvat told Crain’s. “This is a huge opportunity for me to be part of a company that is going to be very significant here.”
Horvat’s move follows the departure of Philippe Visser to join the Related Companies and Richard Gladstone’s to go work for Trinity Real Estate. [Crain’s] — Claire Moses
From left: Joseph Chetrit, Michael Stern and 340 Flatbush Avenue Extension
The Chetrit Group and JDS Development filed plans today to construct a 555,730-square-foot, 70-story tower, making it the tallest building in Brooklyn.
At 775 feet, the property at 340-366 Flatbush Avenue Extension in Downtown Brooklyn would hold 495 apartments and nearly 109,000 square feet of commercial space. It is unknown whether the units would be rentals or condominiums. SHoP is serving as the architect of record.
Earlier this month, the developers paid $43.5 million for the site, located roughly one block from the City Point project, as previously reported. [NY YIMBY] — Mark Maurer
From left: Jack Guttman and a rendering of West 51st and the West Side Highway
A new nine-story office building will rise on the West Side Highway on the block between 51st and 52nd streets.
The development – which is expected to cost $300 million and measure roughly 200,000 square feet – is a cooperation between Jack Guttman and Steve Schwartz, according to a release from the developers.
Guttman is also the developer of the Chelsea Arts Tower, a 21-story tower at 545 West 25th Street between Ninth and Tenth avenues, where condos are being sold for $20 million.
The new building will feature ground-floor retail space measuring roughly 35,000 square feet. The upper floors will have 15-foot ceilings, will be between 15,000 and 30,000 square feet.
Kossar and Gary Architects are responsible for the design. Alan Weisman of Lee and Associates is handling leasing and sales. The building will include a new television studio space as well as an event space on the roof top.
The plan is to deliver floors to buyers by the first quarter of 2016, according to the release. – Claire Moses
Many in this country believe that Obama-led initiatives, such as the Making Homes Affordable program, including HAMP and HAFA, as well as foreclosure moratoria, and others actually exacerbated the situation rather than helping to resolve it.
The U.S. Department of Justice announced an $8.8 billion settlement with BNP Paribas to settle charges that the French bank hid $30 billion in transactions that violated U.S. sanctions. And BNP Paribas might not be the only large financial institution at fault.