The Boom Spreads: This House Is Valued at $350,000

(Photo : Domingo and Milagros Rodriguez endured many difficulties in their East New York neighborhood but have never wanted to leave, despite their daughter's pleas. They bought their house, above, for $62,000 in 1987. It is now worth more than five times that.)

August 7, 2005

By DENNIS HEVESI.

FOR years, Maria N. Rodriquez has been hoping her parents would sell their home in East New York, Brooklyn, and move someplace safer and more appealing.

Ms. Rodriguez, a 33-year-old mortgage consultant, remembers her anxious teenage years walking down desolate streets in a neighborhood that was one of the most run-down and crime-plagued communities in New York City.

But now, Ms. Rodriguez wonders whether her parents were right to stay in the two-family attached brick house on Montauk Avenue - a mile west of the Brooklyn-Queens border - that they bought with an uncle for $62,000 in 1987.

East New York has changed, especially in the last five years. Last year, her parents' home was assessed at $350,000, a breathtakingly high number for those who think of the neighborhood as a symbol of urban decay.
Although the crime rate is still higher than in some neighborhoods in the city, it is way down. "For years I pleaded with them to move to a better neighborhood for safety reasons, and because I was embarrassed," said Ms. Rodriguez, who now lives in a small ranch-style house in Island Park, on Long Island. "I made friends who lived elsewhere and they'd heard about East New York and would not come visit."

When she would push for a move, her parents - Domingo, 62, and Milagros, 53 - "would always say yes," Ms. Rodriguez said, "but that would be the end of the conversation." Perhaps, somehow, they knew something better was coming.

Only a decade ago, the community was pockmarked by "vacant lots, burned-out homes on every block," Ms. Rodriguez said. "Now they're putting homes into every nook and cranny."

The numbers support her perception. From 1995 through the first half of this year, according to the New York City Department of Finance, the average price for a two-family home in East New York nearly tripled, to $351,561 from $122,524.

Investment by homeowners in the neighborhood also grew significantly. Home-purchase loans worth $279 million were originated in East New York in 2002, up from $66 million six years earlier, according to statistics compiled under the federal Home Mortgage Disclosure Act.

Construction is also booming. From 1994 to 2004, certificates of occupancy for 3,776 new housing units were issued, according to the Department of City Planning.

"That is more than for any community district in the city outside of Manhattan or Staten Island," said Ingrid Gould Ellen, deputy director of the Furman Center for Real Estate and Urban Policy at New York University. "The data show continued and growing investment in East New York."

Much of East New York's revival has been spurred by city programs under which the Department of Housing Preservation and Development subsidized nonprofit groups in the construction of large swaths of neatly attractive attached houses for low- and moderate-income home buyers or renters, or the rehabilitation of dilapidated buildings scattered on block after block throughout the community.

But in the last five years - prompted, perhaps, by those new pastel-shaded row houses and rehabbed homes, and certainly by low interest rates - developers have snapped up hundreds of vacant lots and abandoned buildings to create market-rate housing, and buyers have been willing to pay the rising prices.

"A decade or two ago, the market was not strong enough for new market-rate development to work in East New York; today it does," said Shaun Donovan, the city's housing commissioner. "And with low interest rates, you see lots of market-rate construction that is affordable to people making roughly an average income for New York City."

The median income for a family of four in the metropolitan area is $62,800. In East New York, Mr. Donovan said, families with that income can afford a two- or three-family house. "And with the rent from the other units, it's a very affordable way to live," he said.

Gerard Longo has watched the prices rise. "There's been an increase in value in the area of 10 to 15 percent just over the last calendar year," said Mr. Longo, who, as president of Madison Estates and Properties in nearby Marine Park, has closed about 60 sales in East New York so far this year.

For example, a semiattached two-family home on Bergen Street - a two-bedroom over a three-bedroom with a basement - recently sold for $335,000, Mr. Longo said. "That property would have been, a year ago, $290,000 to $300,000," he said, "and five years ago it would have been about $170,000."

A one-family attached brick home on Mother Gaston Boulevard, with three bedrooms, a dining room and two baths, "was recently up for sale for $270,000, and sold within two weeks for $260,000," Mr. Longo said. "Five years ago, it would have been $140,000, $150,000."

Plummeting crime rates have certainly contributed to the increasing home values. In 1993, East New York's 75th Precinct set the city's all-time record of 126 murders; last year, there were 29. In 1993, there were 10,355 serious crimes (murders, rapes, robberies, felony assaults, burglaries, grand larcenies and auto thefts) in the precinct; last year, there were 3,920 - a 62 percent decline. "People can see and feel the tangible application of police resources," said Deputy Commissioner Paul J. Browne, the department's chief spokesman.

Not that the 5.6-square-mile community has evolved into a pristine haven. There are still ramshackle buildings with boarded-up windows, vacant lots, razor-wire coils on fences, junkyards harboring piggy-backed car hulks.
But there is also now, on many blocks, fresh paint on house after house, front yards with flowers blooming, wrought-iron gates bearing ornamental sculptures. And just as there always were, even during the roughest days, some tree-lined streets shade stately old, even ornate, single-family homes. Around Arlington Avenue and Warwick Street, in the northern section of the community, there are century-old restored homes. The highest price for an East New York home in the last year, Mr. Longo said after checking the South Shore Multiple Listing Service, was $420,000, paid in April for a 1901 attached three-bedroom on Miller Avenue with bay windows and an arched entrance.

The community's prime commercial strip - Pennsylvania Avenue, from Linden Boulevard to Flatlands Avenue, with the 42-building, 6,000-unit Spring Creek Towers middle-income residential complex looming to its south - is now dotted with chain stores. Just east of the towers, on what had been a municipal landfill, the 640,000-square-foot Gateway Mall opened in 2002, employing about 1,500 people. And adjoining the mall, construction is to start next spring on Gateway Estates - 2,300 housing units in single-, two- and three-family homes, with 844 units set aside as city-subsidized housing.

And yet, for Maria Rodriguez, as she continues to weigh whether her parents should move out of their modest home, it is hard to disregard the bad old days. "This was a rough block," she said of Montauk Avenue, between Pitkin and Belmont Avenues. "My mother and father very rarely allowed us out, day or night. There were drug sales 24 hours a day on the block, around the block. There was gunfire. Not every night, every third night; not that that's much better."

Ms. Rodriguez concedes that much has changed. "It seems like a different world," she said. "The home facades are being redone, people taking pride. It's quieter, cleaner. On Pitkin, I notice the number of new businesses; the awnings are a lot nicer."

Purely from a housing point of view, Domingo and Milagros Rodriguez have just about seen it all in East New York since they arrived, separately, from the Dominican Republic in 1967.

They met in East New York, while both were living doubled-up with relatives. After they married in 1970, they moved into a tiny one-bedroom - with a bathtub in the kitchen - on Atkins Avenue, one block from the home they now own. The rent was $80 a month. Within four years, three children had arrived; and in that tiny bedroom, Mr. Rodriguez, a carpenter, built a triple-decker bed. The Atkins Avenue building has since been razed, along with all the others on and around the block, to make way for 42 city-subsidized single-family affordable houses developed by the nonprofit Nehemiah Homes Development Fund.

In 1974, the Rodriguez family moved six blocks to the northwest into a three-story, yellow-brick walk-up on Glenmore Street where they blissfully spread out into a four-bedroom railroad flat. Over their 13-year tenancy there, their rent ranged from $200 to $500 a month.

Several weeks ago, Maria Rodriguez walked by the Glenmore Street building and, in a hint of the community's persisting difficulties, encountered a woman living there with her young daughter and two nieces. The woman said she had not paid rent for months since the landlord had abandoned the building, which has had no hot water or heat since last winter.

By stark contrast that same day, half a block from the Rodriguez's Montauk Avenue home, at the corner of Belmont Avenue, power saws were whining and hammers thudding as workers added the final trim on five new attached three-family, tan-brick homes with high-pitched roofs - all for rent.

The 15 homes -12 three-bedrooms and 3 two-bedrooms, all with balconies, air-conditioning, wall-to-wall carpeting and wiring for cable - are renting for $1,300 to $1,600 a month. They were developed by Vishnu Bandhu, owner of the Guy America Development Enterprises Corporation. And they are among the dozens of small market-rate projects that now dot so many blocks in the community. Mr. Bandhu alone has built 27 homes for rent or sale in East New York over the last five years. "I consider myself one of the starters here," he said.
Five years ago, a vacant 25-by-100-foot lot cost $35,000, Mr. Bandhu said. "Today, the same lot sells for $160,000; I just closed one," he said. "Five years ago, I sold a two-family for about $325,000; now the same house might sell for about $450,000."

East New York has become a personal matter for Mr. Bandhu. Four years ago, he and his wife and daughter moved from Astoria, Queens, into a home at the corner of Pitkin and Shepherd Avenues. "I built it myself; it has everything I want: a Jacuzzi, central air," he said. "My wife never wanted to come here because she was so scared - the East New York bad reputation. Now we feel like home because the people around here are very friendly. They say good morning on the sidewalk, laugh and talk with you."

Mr. Bandhu's home is four blocks from the Rodriguez home. There, seated with her parents on their balcony, Maria Rodriguez said she remained conflicted. "Should I have them move, stay put?" she said. "They say, 'Let's stay, this is my home, this is what I know.' They may be right right now, because whatever they sell this home for, whatever amount they get for it, will probably not be enough to move into another neighborhood because of the overpriced market. So, I give up."

Mr. Rodriguez said: "It's much better here now, new houses all over the place. People that left want to come back."

He smiled at his daughter. "Sometimes she knows more than me," he said, then winked.