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Thursday, June 17, 2010

Cast Iron Stomach

I recall my roommate in 1970, telling me that he was moving to a "loft in SoHo." My first question was, of course, "Where is SoHo?", the second was, "What is a loft?" and the last was, "Why?" It may be hard to imagine, but when I first moved to New York City, SoHo was quite undesirable - an industrial backwater with little residential appeal.

Remarkably, I lived in the Village, and SoHo was just a stone's throw away - south of Houston Street - yet I had never been there. A visit quickly revealed an industrial neighborhood with little charm at all. Regarding the term "loft", I was told that this term derived from the large, upper floor "lofty" spaces. And the "why" was simple - cheap rents.

In hindsight, the explanations of why a New York City neighborhood was "discovered" always appear obvious. However, the individual is rare who will recognize this before it is "discovered" - early adopters are often artists who see the merits shining through the demerits, which are typically many.

Becoming a pioneer of an unpopular neighborhood is now much more difficult - everyone is looking for the next place, and news moves with extreme rapidity.
More importantly, all the reasons why a neighborhood looks undesirable and shows little promise are what really prevents most from getting in early. Successful stock investors know this well and have the ability to go against human nature and buy when stocks are going down, much as the pioneer, in spite of popular sentiment, moves to neighborhoods that are downtrodden.

Another huge issue in "buying in on the ground floor" is waiting until an area improves. This could take decades. Worst of all, many areas never fulfill their promise. I have always felt that housing stock was a key element. This is no guarantee either - areas like Bedford-Stuyvesant, Brooklyn, and Harlem have beautiful row houses, yet have not seen the rapid gentrification that other areas have.

Despite the improvements in these communities, they often continue to be stigmatized by a lingering public perception left from the rougher times of the past.
If you believe you are a person that really can see past a place's obvious detriments, go to Brooklyn and visit the Gowanus Canal. Some tout this as the future Venice of New York City.

Once a tidal inlet of creeks, marshland and meadows, Gowanus Canal was built from Gowanus Creek and completed in 1869. The Gowanus Canal became a hub for Brooklyn's shipping activity to service the factories, warehouses, tanneries, coal yards, machine shops, chemical plants, flour mills, cement factories and manufactured gas refineries lining its shores. Industry thrived in the area, and with it, pollutants.
The area has had an acknowledged problem with industrial pollution for over a century with cleanup discussions going back decades. On March 4, 2010 the EPA announced that it had placed the Gowanus Canal on its Superfund National Priorities List.

Gowanus Canal and the surrounding neighborhood have a much greater impasse and many hurdles to becoming a viable residential enclave, much less a charming Venetian-like waterway. There is little charm in oil tanks or scrap metal yards and improving an area like this is a taller order than cleaning up the cast iron buildings of SoHo or the beautiful brick structures of DUMBO, Brooklyn.

But a bright future could be in store for those with a long vision and, like anyone waiting out the transformation of an industrial neighborhood, a cast iron stomach :)

1 comment:

Anonymous said...

Very reasonable story!

I love your blog.