New York Pieds-à-Terre
We have discussed in the past how many apartments in New York City are pieds-à-terre and how much this hurts or hinders New York’s housing stock. There have been doubts about how many apartments in NYC could be secondary residences.
The answer turns out to be around 25 percent. A bit more in Manhattan.
The one surprise is that many apartments are owned by middle-class people who moved to the suburbs or farther away. It is unclear how many of these apartments are sublet or rented out. Some co-op buildings have very strict rules about how long residents can sublet their apartments for. For those who don’t know, a co-op is more like owning stock in the entire building and the the amount of stock you own corresponds with a particular apartments*. There is a very complicated approval process for many co-ops (including board approval) and some buildings are notoriously exclusive and picky. My first apartment in NYC was subletting from a neighbor who kept her apartment. I needed to move after a year because the building had rules about only being allowed to sublet for X number of years before going fallow for a while.
I’d be curious to see how this corresponds to San Francisco. I think NYC has a longer history of ownership than San Francisco. SF does not have co-ops but they have tenants-in-common buildings which are similar.
*There is a major downside in that if someone in a co-op building defaults on their mortgage, the rest of the building becomes responsible for said mortgage.