OMG! 2BR New York Apartments for $10

new york apartmentsSay what you will about urban renewal, but it certainly creates some notable real estate situations.

Take the story of the nine tenants who live in two adjoining buildings in Manhattan's East Village, pictured at left. Once a thriving neighborhood, the streets around Second Avenue and First Street fell victim a few decades ago to arsons-for-hire, leaving many of the neighborhood buildings graffiti-scarred and abandoned.

But neighborhoods don't stay the same forever, especially in New York. In a classic urban renewal story, the city took over derelict buildings and sold them to nonprofits and private developers. Now high-rises loom over the few remaining low-rise wrecks, and the neighborhood is one of the city's hippest. And therein lies the irony.

The gang of nine who held fast to their low-income apartments above Mars Bar are being asked to move out by the end of the month. For agreeing to relocate, they will be able to buy two-bedroom units in the 12-story luxury high-rise that will replace their falling-apart building for just $10.

A nice deal if you can get it. And, according to urban renewalists, you likely can't. "Don't expect to see a similar deal again," said Steve Herrick, executive director of the Cooper Square Committee, a group that works to preserve and develop affordable housing on the Lower East Side.

The plan is for the tenants who live above the graffiti-covered Mars Bar -- a much-beloved dive that symbolizes the old to those who object to the new -- to move out by the end of the month so the building can be demolished. In two years, when the new 65-unit high-rise is built, they will be allowed to buy one of the 13 units in the new building that are set aside for low-income tenants. The other four low-income units will be sold for substantially more than 10 bucks, but still a fraction of their fair market values.

The building that the nine tenants live in is a designated urban renewal site, said Herrick, and it's the last property in this urban renewal area. A similar situation exists in the nearby neighborhood of Seward Park; when that building gets sold, the developer must agree to reserve 20 percent of the units for low-income residents who currently live there.

Even for some of the beneficiaries, urban renewal is a bittersweet deal.

One of the nine tenants whom we all see as lucky stiffs is John Vaccaro, 81, who bemoans the gentrified state of his beloved neighborhood. "It's not the New York I came to," he told Crain's New York Business.

"It's the end of an era," said Herrick.

The city's Department of Housing Preservation and Development owns fewer than 800 apartments acquired through tax foreclosure, down from 101,000 in 1981. In the Cooper Square Urban Renewal Area (from the Bowery to Second Avenue, and from East Fifth to Stanton streets), just one piece of vacant, city-owned land remains: a small lot off East Houston Street.

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