what will it take for me to buy an apartment in brooklyn?

For those of you who know me well, it may not surprise you that I’m obsessing over trying to buy an apartment these days. As my friend Adrian frequently tells me: “if I hang out with you and your siblings for long enough, the conversation inevitably turns toward real estate”. And she’s right - we do have a dream of all buying a brownstone together and living on separate floors. So I guess you can say that the desire to own runs deep with all of us. Maybe our parents instilled us with the values of a sensible real estate deal, or it just runs in our blood.

In any case, home ownership is something I’ve been thinking about lately now that I’m out of grad school and the long arc of my career and adulthood are stretched out before me. And since buying a brownstone is not really attainable for the siblings at the moment (shockingly we don’t have the money for a $4 million house right now) I’ve been looking at what it would take to go it alone.

Now it may be the case this home ownership dream is exactly that: a dream. For starters, I’m a very atypical buyer: I’m a single 30-year-old man that doesn’t have the level of stability or certainty around my living situation that would ensure I could stay in a home long enough for it to accrue in value. For example, if I get a job in another city or want to move in with a partner (your guess on if this ever happens is as good as mine), then I may need to leave my apartment.

Second, I live in a rent-stabilized studio apartment, which means that my landlord is not able to raise my rent significantly year-over-year (the word in the building is that this year’s rent increase is going to be 2.75%). It may be ~small~ but knowing that I can indefinitely afford to live alone in this city is a rare gift, and something that gives me the opportunity to rent longer term than people in non-rent-stabilized units.

Finally, I just don’t really make enough money to be competitive in the contemporary Brooklyn real estate market. I make $93,000 at my current job, plus some money through web development consulting on the side (let us know if you need a website!). This is objectively a lot of money in the U.S., where the average individual income was $42,220 in 2023, less than half of what I make.1 However, it’s unfortunately not a lot in the New York metropolitan area, where the median 1-person household brings in $113,400 a year.2

Now I know you are probably thinking that I really have no business trying to buy an apartment, but I have some savings and an offer of parental support that have put this dream somewhat in reach. In a city where people’s parents are regularly subsidizing their lifestyles (especially when it comes to home purchases), I think it’s important to come clean about the fact that my parents have offered to help me with a down payment. At this moment, I’m being prideful about it and have not taken them up on the offer, but it’s something that I am considering. I also do not have any student debt, since my parents paid for my college tuition and I was able to pay for my own graduate education thanks to the generous tuition coverage at MIT.

There are also some public programs for first time homebuyers that may be difference-makers for me, including downpayment assistance programs and mortgage products with favorable interest rates. I haven’t quite figured out how to navigate these policies yet, but I might as well put this urban planning degree to good use!

In any case, my financial situation has limited my options to a very specific set of real estate options in Brooklyn: mainly, co-ops and income-restricted properties. While these properties are more affordable, they are severely limited in their ability to generate income: they are usually not allowed to be rented out, and are not allowed to accrue in value at the rate of a condo or apartment that is not subject to the same rules and regulations. Looking at these properties has been an interesting test of my values, particularly my belief that housing is primarily about shelter, not about stockpiling personal wealth. But it’s one thing to read Susanne Schindler’s case for limited-equity co-ops, and another to realize that you won’t make any money off the sale of your home in 5 years.

I haven’t figured out if this is right move for me financially or personally just yet, but I have started to work with a local non-profit that assists first-time homebuyers with the process. I’ll keep you all updated with what I learn :)

City Speak #47

Bennett