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How a Former Industrial Wasteland Became One of New York’s Hottest Luxury Markets

Growing up in Frederick, MD, Meg Puglisi dreamed of living in New York City—which to her meant Manhattan, pure and simple. The Bronx? Staten Island? Queens? Just names on a city subway map.

So when she graduated from college, she moved there to pursue a media career. In the following six years, Puglisi enjoyed all Manhattan had to offer, while bouncing through a series of cramped and exorbitantly priced apartments.

But now Puglisi, a 29-year-old public relations professional, has found her dream home—and it’s not in Manhattan. Instead, it’s across the East River in a portion of this metropolis long disdained by fashionable New Yorkers: Long Island City, a newly chic neighborhood in Queens. The borough was perennially considered the tragically uncool neighbor of hipster Brooklyn.

But all that has changed.

Over the past 15 years, the former industrial and manufacturing hub of Long Island City has been rezoned for residential development bit by bit and is now home to the highest volume of apartment construction in the nation. As one of New York City’s hottest new luxury markets, many of its long-standing, grimy warehouses have been replaced by an array of gleaming high-rises along its waterfront.

Much of Long Island City’s appeal lies in its close proximity to midtown Manhattan, just a single train stop away. Another reason for its growth is the availability of land—especially when compared with the gentrified portions of Brooklyn, which is becoming ever more built out, and Manhattan, where property has been scarce for decades. And costs are still attractive, making it catnip to developers.

“It’s a clean slate,” says New York–based real estate appraiser Jonathan Miller. “There is still a [good] amount of empty lots where it looks like there will be development to come. It doesn’t look like it’s even close to being completed.”

In March, Puglisi and her boyfriend traded their roach-infested, 400-square-foot apartment in Manhattan’s West Village for a one-bedroom unit on the 36th floor of a brand-new high-rise in Long Island City.

For $3,600 a month, they get stunning city views and a dishwasher, washing machine, and dryer inside the unit, a nearly unheard-of luxury for New York City renters. Plus, the building houses a full gym and rock climbing wall, rooftop pool, and outdoor terrace with an herb garden.

“It’s amazing. I feel like I’m on vacation every single day,” says Puglisi, who commutes 15 minutes to her job in midtown Manhattan. “You get so much more space for your money.”

It’s a renter’s market, with more upscale offerings to come

Rents clearly aren’t cheap in the neighborhood. But they’re not as expensive as they would be across the river in Manhattan.

The median Long Island City apartment was renting for $2,991 a month in the first quarter of 2017, according to data from local real estate brokerage Modern Spaces. That’s up nearly 8.8% from 2012, when Modern Spaces began collecting the data.

Meanwhile, the median rental price in Manhattan was $3,417 in April, according to data from real estate brokerage Douglas Elliman. That’s 14.2% higher than in Long Island City. And most of those Manhattan rentals are in older buildings that lack the shiny new amenities of the Queens developments.

The difference is even starker for home buyers. The median listing price of a home for sale in Long Island City is $1 million, whereas it’s $2 million in Manhattan, according to realtor.com^®.

Long Island City added a whopping 12,533 new residential units in 41 buildings from 2010 to 2016, according to a recent report by rental website RENTCafé. And according to the Long Island City Partnership, a local economic development group, 9,000 more units are slated to come online this year. The vast majority are one- and two-bedroom rental units.

“If you take a walk around Long Island City, you’ll see cranes on every other block,” says Eric Benaim, founder of Modern Spaces. “We’re getting a lot of [folks from] Manhattan who would never have come to Queens. But they were priced out.”

Still, with so many new buildings on the market competing with one another for tenants, nearly half of both new and old buildings in Long Island City are offering concessions, says appraiser Miller. They’re often in the form of a free month’s rent, lower security deposits, or no broker fees—all the better to lure in renters who now have many choices.

Stop-and-start transformation

The industrial oasis of manufacturing plants and warehouses began transforming after a 2001 rezoning of 34 blocks. The initial residential boom kicked off in 2006, when about a half-dozen buildings started rising from the ground. But then came the housing crash, and construction stalled.

Development picked up in 2010, with a few buildings going up here and there, until it was back in full force by 2012, says Benaim. And then things really took off.

And it’s not just the housing market that’s blazing hot. Over the past five years, JetBlue, New York’s health department, and the City University of New York Law School have all moved their headquarters to the neighborhood.

Long Island City’s emerging cool factor

As more people have moved into the area, so have galleries, craft breweries, a Michelin-starred Mexican restaurant, a hipster bowling alley, a weekly food and flea festival, and a slew of new hotels. The neighborhood is also home to monthly outdoor parties with a DJ at the Museum of Modern Art’s outpost in Queens, MoMA PS 1. And then there’s the two indoor rock climbing gyms located less than a mile apart.

“We’re going into hip and emerging areas all over the place,” says Brooklyn Boulders Queensbridge founder Lance Pinn on the chain’s fourth rock climbing gym, which opened in 2015. “Long Island City has fantastic train access. … It’s the most convenient place in New York outside of Manhattan.”

Pinn estimates that about one-third of his climber clients are local, with most of the rest coming from Manhattan and the surrounding area.

Pinn himself lives here. He and his girlfriend live about a quarter-mile away from his newest facility, in a one-bedroom apartment on the 38th floor of a rental tower that opened in 2013.

“Long Island City over the last 10 years has gotten an awesome vibe [and] reputation for young families and young digerati,” Pinn, 32, says. “The day we moved in I felt like I could die a happy man.”

Long Island City might be hip, but it needs more drugstores

“We still don’t have the media attention and the nostalgia that Brooklyn has,” says Rob MacKay, spokesman for the Queens Economic Development Corp.

And the market does have a few pronounced downsides.

One drawback is that only about 7% of the housing units have three bedrooms. This means many of the young families moving to the neighborhood are likely to move again if they have another child or when their children get older, Benaim says. “These are starter homes,” he says.

And then there are the lack of amenities in the neighborhood—a dearth of drug and grocery stores to accommodate all of the new residents. That’s still an issue for many Manhattanites considering moving in.

“While there may not be a drugstore on the corner, we know it will come,” says Puglisi. “There are people who believe in the area, and they’re investing a lot of time and money into developing it.”

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