Let the seller beware: Structures on large lots with favorable zoning are appealing to Astoria developers

It's interesting to note that developers are buying properties in Astoria to take advantage of its zoning, which allows for additional buildable square footage. Looking at sales in Astoria can be misleading until you begin to understand the modus operandi of the buyer. Examples of knock-downs of what once were family homes are quite common in the New York metro area. I have a friend who grew up in Lido Beach, N.Y. on one of those blocks on the ocean. The buyers kept the pool, demolished the house and built a New England-style house that overshadowed all the others on the block. And just the other day, I spoke to a man who lived in a building on 21st St. in Astoria that I'm marketing as a development site. The intent is to demolish them and build an 8,000 s/f residential building in their place. Fond memories of the past are still held close to many people's hearts while progress makes its way toward building new memories. In an interesting reversal, a 1901 two-family brick house on 29th Ave. sold in February of this year for $540,000 at approximately $228 per s/f. In what was most likely a foreclosure in November of 2006, the referee sold it to a Long Island company for $502,661. Back in April of 2006, the deed had been transferred for $600,000. It is located on a 25' x 100' lot in an R6B zone, which allows a floor to area ratio of 2. This means you can potentially build a 5,000 s/f building on this piece of land. If you do the math, the property sold for $108 per buildable s/f. On 30th Ave., an irregularly shaped vacant lot sold in February 2007 for $430,000. The land area is slightly under 5,000 s/f. The floor to area ratio in this R6A district is 3. That comes to less than $30 per buildable s/f-which seems like a bargain. This got me thinking about the sales trends in Astoria, so I started looking at a number of buildings that seem to be trading on the high end of what would be "the market." On 38th St., two 1,400 s/f one-family homes dating back to the early 1900s have been demolished to make way for new housing. One house with a garage built in 1914 traded in October of 2006 for $1.325 million. The prior sales price for this home, recorded in 1987, was $250,000. The other house sold for $1.3 million in January of this year. On average, that's over $900 a s/f for each building. According to the Department of Buildings, one lot has plans for a four-story building with 12 units, the other has plans for 10 units. I also came across another anomaly-a 1,200 s/f semi-detached one family on a 2,550 s/f lot that has traded four times since 2004. The first transfer was at $283,500 in 2004; in 2005 it sold for $401,700; it was sold again in 2006 for $520,000; and this year it sold for $810,000. How did the value almost triple in less than four years? Looking through these sales, a pattern started to emerge. Developers are buying land for what could potentially be built on the property. There are many examples of this, such as the duplex homes on 21st St. being demolished to make way for new condominium housing. Also driving up the prices paid are incentives in some zones that encourage the development of "community facility," which allows for additional square footage to be added to the project. The Department of City Planning allows for certain use regulations permitted in residential, commercial and manufacturing districts. So, for example, when it comes to a site in an R6 zone where you could build a 40,000 s/f condominium building, you could potentially add more than 10,000 s/f of medical offices. In Commercial Overlay Districts (example C1 and C2 overlays), retail use can be combined with the residential zoning. In this example, a beauty parlor or grocery store can be on the ground floor, below the residential use, with rental apartments up above. Some people want to keep the neighborhood as it is, but there are always those who oppose this. More moderately priced housing (compared to Manhattan) and better retail corridors are fueling this development. Other factors stimulating development include our aging population with demands for different types of housing. For most people their home is their largest real estate asset. Bottom line-if you own an older home, say built in the early 1900s, on a piece of property that is 25' x 100' or larger with favorable zoning such as R6 or R7X, it might be worth more than you think. To paraphrase a latin proverb-let the seller beware. Lynne Davis is the Astoria broker at Massey Knakal Realty Services, Queens, N.Y.