No-one’s Home: Check Back in Two Years

Unsettling article in today’s WSJ on the continuing rise of the luxury pied-a-terre. More and more high-end apartment units in Manhattan (and elsewhere) are owned by wealthy people who don’t live there, and only ever visit maybe a few weeks a year (or two). But faced with the alternative of “schlepping” to a hotel during their rare visits, they buy instead.

Stats are hard to come by, but the WSJ rhymes off a list of buildings in New York where less than half the owners are resident. Further, Donald Trump says that more than half the owners of his buildings on Central Park West and Park Avenue are absentee. A Manhattan real-estate appraisal firm says that the percentage of second-home owners has more than doubled — from 5% to 10% — over the last eight years.

The best quotes in the story come at the end:

Some see an upside to the empty apartments. Michael
Holtz, who owns an 1,800-square-foot unit at the Richard Meier towers,
says the lack of neighbors limits competition for the buildings’
amenities. “I go to the pool and the gym a lot and there’s almost no
one ever there,” says Mr. Holtz, who owns a travel agency. “It’s great
for me, but the pool attendant doesn’t have much to do all day.”

Yet while the dearth of full-time residents can mean
less work for building employees, it can have a downside for them as
well. A doorman at one of the Meier-designed towers blames these
virtual owners for a shortfall in holiday tipping. “This Christmas was
probably the worst for me in years,” he says. “I guess when nobody’s
here most of the time a lot of people just forget to tip.”

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Comments

  1. Bubba says:

    I don’t understand what the problem is here. Don’t we want wealthy people spending their money? Don’t we want them buying expensive wines, cars, rugs, etc.? Sure, some wealthy businessperson made a bunch of money selling these condos, but salespeople, construction workers, etc. also made money. Which is worse…………the wealthy spend it or they hold onto it?

  2. Not a problem, per se, just thought it was an interesting change with potential social impacts on cities. Was also intrigued by it as an opportunity.

  3. Lars Smith says:

    Venice (Italy) is an extreme example. It is a ghost town; the palazzos are owned by rich foreigners who rarely visit.