Gea Elika

With the sale last year of a large number of the city's public housing units, the battle over New York City's subsidized housing was brought into stark relief.

Indeed, last year's sale of the Manhattan apartment complexes was not only the largest sale of city land ever, it was part of a larger trend. Over the past several Republican administrations in City Hall, and even before that, the city has been steadily reducing their responsibilities in the public housing sector.

The problem has become especially acute as housing prices began to soar in the latest housing boom. Property values became so high that the city felt more and more pressure from landlords to raise the ceilings on monthly rentals in rent-controlled apartments.

Now however, as the economy is beginning to tank, a whole world of hurt is starting to come down on the pocketbooks of those living in rent controlled apartments.

As if that weren't enough, oil prices are going to be killing residents and landlords of NYC apartments this years.

So, while rents haven't decreased by all that much, the cost of owning and operating a New York City apartment building has.

In fact, the increased pressure on both sides of the subsidized NYC apartment battle could end up being the first instance of a return to stagflation leading to a major political fight in the coming years. As both the demand for public housing and the cost of supplying it increases, something will have to give way in the current set of political battles over public housing policy.

If recent history is any indication, the city will end up moving further in the direction of pushing its poor and middle class families further and further to the borders of the city.

It would take an administration in city hall that is considerably to the left of the past several mayoralties to reverse this trend in the make up of NYC apartments.

In the current political climate, this looks unlikely. However, if the NYC economy continues to do well in comparison to the rest of the country's, then there the funds will be available to the city in order to increase subsidies to both tenants and landlords.

That is to say, the city could, in effect, offset both the rising fuel prices and the upward pressure on rental rates. The question, however, is whether or not the political will is going to be there come decision time.

And that, unlike most variables in the housing market, will be up to the voters.

In many ways, 2007 was the culmination of one of the most important periods in the history of New York City real estate. Over the past decade, Manhattan apartments have more than tripled in value. While the rest of the country began to buckle under the pressures of the subprime crisis, the momentum from such a breakneck pace of growth kept the New York City market going strong throughout 2007. Nationally, it was the worst year for housing since the Great Depression; for New York apartments, it was just another solid year of growth.

It was more than just momentum, however, that helped make 2007 a strong year for NYC apartments. At least in terms of Manhattan, there is a long-term, fundamental transformation of the market taking place. Demand started this transformation, as more and more people – especially professionals – wanted to move onto the island. Supply is finally catching up, however. Recent construction has been heavily tilted in favor of the high end markets, both in terms of the upper reaches of the middle class and the pure luxury market.

It's a general rule in real estate that speaks to a basic faith in the responsiveness of markets: The nature of recently completed buildings says a lot about where a market is headed.

For most markets, recent construction is varied enough that it is tough to find any discernible trends just by looking at the new buildings that have started to go to market. In Manhattan, however, the nature of recent buildings speaks volumes about the one and only direction the market is heading in: upscale.

Recently constructed buildings with a doorman, for instance, are 34% more expensive than older buildings with doormen. This reflects much more than the desire for the most modern of accoutrements. Rather, it says that New York real estate is shifting at, historically speaking, a rapid pace towards a market that caters almost exclusively to professionals, the upwardly mobile and others with relatively high salaries.

Furthermore, the average rent in Manhattan south of 96th Street grew to an astounding $3,310 over the course of 2007.

The nature of the recent construction combines with political developments in relation to public housing that further shifts Manhattan towards a nearly irrevocable movement away from the socioeconomically diverse past of the island.

It is good news that supply is responding to demand in a big way on the island of Manhattan. What is troubling, however, is that rents have gotten so high that the most famous of American islands may begin to look fundamentally different in the coming years.

Denver has steadily been growing for many years now. Near the heart of some of the best skiing in the world, and the capital city of Colorado, Denver seems to steadily be becoming a more exciting city with each passing day. This constant improvement in the area’s culture and economic infrastructure has pushed the cost of living about ten percent higher than the national average. Fortunately for those looking to relocate there, most of that cost does not stem from high property values. The average price for a home last year was $260,000. This makes it a considerably more expensive city to buy in than most other cities in the rocky mountains, but still much cheaper than most major US cities.

Likewise, the median rental price was $704. So, Denver is not a cheap city to live in, but it might feel that way for someone moving from Boston, New York or other pricey cities. The average income is also just a bit more than ten percent above the national average. The unemployment rate is about one percent above the national average.

There are a number of ways to find a Denver apartment or house to buy or rent here. Newspaper listings, while constantly shrinking due to the growth in online listings, are still popular here, even though they can’t be efficiently searched. There are several online real estate companies that offer more complete services and extensive listings. All of them allow users to search listings by size and price, but few offer more possibilities than that.

There is one website, though, that has an extremely in-depth set of search options, for both renting and buying. City Cribs – allows its users to search for a home by the details of the house that are important to them. If a potential buyer, for instance, is looking for a place with a balcony, they can search just among the homes in the area that have one. Or, if they are only interested in, say, a five-bedroom furnished apartment with laundry and parking, where landloards allow pets and there are no realtor fees, they can search for that, too. Even the results can be sorted and listed in six different ways.

Homes define New York City. More than any of the cultural attractions the city is known for, the one feature of the city that sticks out in most people's minds when they visit the city for the first time is the endless – as far as the eye can see – ocean of buildings. The vast majority of these are residential, and there is the fundamental New York City in a nutshell: Gone are the suburbs, gone the typical city's dance of urban and suburban; gone the grassy fields at the edge of town... In New York, all is city, and thus all is mankind's culture.

This overwhelming sense of a culture permeating all the physical space of one's existence shines in much of the world's memory. Some are disturbed by it, but many are enthralled. Indeed, much of the city's population first came to the city and saw the city's lights and bars, nightlife and endless ocean of buildings for the first time with a certain powerful sense of awe.

There is a downside, though, to so much of the world recollecting New York City with starry-eyed thoughts: the worlds a big place, and though you wouldn't know it by looking out at those New York apartments, that ocean of buildings does end, and it just can't fit the whole world.

And this is the modern world, so the laws of supply and demand waxes powerful just about everywhere, especially in NYC, the seat of American Capitalism. So, homes here are more expensive than just about any place in the world.

So expensive here, in fact, that real estate concerns sometimes parry in people's minds even with the holy grail of all human existence, love. Stories abound in real estate offices here of couples that either did or didn't get married at a certain time because of concerns over NYC apartments.

For every example of the couple that had known each other for a few weeks before deciding to snatch up a great condo, there are stories of those loving partners who simply loved their home neighborhoods more. When it came time to move in, they just couldn't settle on a place. So, their relationship drifted for a while, and relationships that drift are relationships that might die: And so the prime part of human supply and demand – the need for shelter, or – the real estate market, runs up from the most mundane, practical part of life to bid challenge in mankind's mind with the loftiest emotion of all.

But then again, great New York apartments are quite hard to come by. Almost as hard as great lovers. So, here in a city where man has covered the vast majority of nature with tar, concrete and buildings, real estate can be as important for some as love.

At the beginning of 2007, when most mainstream economic analysts looked forward to what 2008 would be like, few of them got their predictions right. They all predicted slower rates of growth, both globally and in the US. But their predictions underestimated the effect of the subprime crisis, and for the most part, their predictions were quite off.

That's a bit of an understatement, really. For the most part, they got completely blindsided by the subprime crisis. Sure, many knew that it was coming, but few realized it was going to be as bad as it was.

The big thing they missed was the huge hit the big financial companies would take when, all of a sudden the liquid, easy-to-move mortgages that they traded back and forth became as illiquid as, well, what they, in effect, were: houses. A study by the International Monetary Fund detailed recently how the valuation models analysts used for these mortgage packages simply broke down as the going got rough, and a whole lot of companies lost a whole lot of money.

So, as the world's mainstream economic experts meet in Davos for their annual forum, the normal hyper-optimism and self-congratulations that float around the place aren't likely to be quite so prevalent this year.

Indeed, the Commerce Department just reported that last year was the worst year for the national housing market since the Great Depression.

However, in the world's financial capitals – New York, London and Hong Kong – the economy is still comparatively solid.

The same goes for their real estate markets. No one expects 2008 to be as kind to their real estate markets as 2007 was, but each city enjoys a combination of limited space and significant predicted economic growth.

Indeed, in the case of the value of New York apartments, the city is relatively sheltered from the subprime crisis in two major ways: First, the city's co-ops have kept an adequate level of regulation in place to make up for governmental malfeasance. This has largely protected the city from the direct impact of the subprime crisis. Second, the falling dollar has increased foreign demand for US housing. When foreigners think of US housing, they tend to think of NYC apartments. NYC is our most famous city – except maybe Hollywood – and citizens of other countries have thusly been buying NYC apartments at a breakneck pace.

So, even though the US financial industry, which is centered in New York City, has largely been responsible for the past two recessions, the city's apartment market shall be relatively sheltered from the storm some of its inhabitants have brewed.

While the market definitely will not have a great year in 2008, things won't be so bad that savvy buyers and sellers can't make great deals, and there will most certainly be much profit to be had.

It'll be no thanks, though, to the right-leaning economic experts meeting in Davos this year.