A century-old Upper East Side walkup is now encased by the cement skeletons of two hulking highrises, leaving tenants to consider a uniquely New York question: Is decent rent worth living in the center of a construction zone?
So far, residents say they’re willing to wait it out inside a five-story building eclipsed by a pair of towers, but the noise, dust and hassle haven’t been easy.
“It’s hell on wheels here,” said pianist Anita Humer, who moved into the building in the 1980s.
The striking scene along Third Avenue, between 74th and 75th streets is the result of a yearslong play to patch together lots, demolish old buildings and, when that didn’t work, purchase the “air rights” and permission to deck over the quaint, brick tenement building as part of a 33-story condo complex. Another tower on the other side rises 18 stories straight into the air, boxing in the old walk-up.
The arrangement — juxtaposing an old New York residence directly beneath a shiny behemoth — stands out as an extreme example of a fairly common deal, where developers purchase the space above a neighboring lot because it allows them to make their own projects taller or bulkier, while still complying with zoning rules that restrict size. The old building will remain a time-capsule, with few options for future redevelopment.
With limited space to build in Manhattan, developers sometimes reach an agreement with a landlord to stretch their projects up and over their neighbors’ roofs through a construction technique known as a cantilever.
Those Jenga-like designs can make air rights deals way more visible to everyday New Yorkers, said Sheila Pozon, special counsel at the real estate law firm Kramer Levin.
“People notice when they see cantilevers, because that’s very obvious,” said Pozon, who has worked on hundreds of air rights deals. “It’s like, ‘Oh, wow. This is different than what I’m used to seeing.”
But for tenants of eight apartments inside the older building, where some of them have lived for over 40 years, it’s also kind of a loud, dusty nightmare.
Humer, 77, said she pays about $1,300 a month for the one-bedroom unit, one of just a few thousand rent-controlled apartments left in the city. She said she sticks around because her rent is low by Manhattan standards, where the median rent is about $4,400.
At least two other tenants also live in rent-controlled or rent-stabilized apartments, meaning the landlord cannot increase their monthly rent past a certain percentage and they have the right to a lease renewal.
Sometimes in situations like this, the landlord or a developer who wants to acquire their building and knock it down would offer tenants in rent-regulated units big sums to move out. That way, the developer can tear down an empty building and put up a new, more profitable place.
But Humer and two neighbors in rent-regulated units said that never happened, even as the firm Premier Equities and its partners acquired and demolished similar buildings next door, before selling the lots to the company Elad Group.
“We were waiting. I would have taken whatever they offered me,” Humer said. “Everything was being torn down except this one and that’s it. It’s going to stay like that.”
Instead, their old landlord sold the “air rights” to the lot for close to $6 million, according to property records, and agreed to let the developer build a cantilever over the roof back in 2018. The owners of the walk-up, a limited liability company, then sold the actual property to current landlord, Elliot Sohayegh, for about $5 million last year.
The head officer for the company did not respond to phone messages. Premier Equities declined to comment.
Sohayegh hung up when contacted for this story and did not respond to text messages.
Humer said she and her neighbors would have moved out if they were guaranteed an apartment in one of the new buildings rising to the north, south and directly above. They said the offer never came.
Caitlin Green, a recruiter, moved into the building with her husband in April, when the high-rises were barely off the ground. She said they were living in SoHo until the lease expired on their $2,600-a-month “COVID deal.”
Her husband found the one-bedroom for about $2,800 a month and signed the lease, she said.
Green, 35, said she works from home and uses noise-canceling headphones to block out the racket all around. Earlier this month, she pointed out the construction elevator carrying workers just a few feet from her dust-covered window and said she and her husband installed their own screens to keep out the grime whipped up by the heavy machinery drilling, hammering and clamoring for 12 hours a day.
“Clanking, cement mixers, elevators, people yelling, people smoking,” she said. “It’s kind of been a crazy experience living in a construction zone.”
Yes we cantilever
Cantilevers are becoming more common in Manhattan, but tenants living in smaller buildings usually don’t have to fear construction rising right above them, said Pozon, the land use attorney.
That’s because developers can’t automatically build over a neighbor’s roof after purchasing their air rights. That agreement must be part of the sale, she said.
Most developers would much rather purchase the whole property, knock it down and build from scratch because the cantilever process can be more expensive, and get bogged down in a thicket of regulations and oversight rules from multiple city agencies.
“There are a lot of technical requirements,” she said. “Most developers would want to acquire that site. But if you have a seller that doesn’t want to sell and they’re open to doing a cantilever, then you take what you can get.”
She said the Department of Buildings imposes “stringent” regulations: The fire department has to ensure flames can’t leap from the older building below to the structure above, and the Department of Environmental Protection has to weigh in on sewer and water line design.
Still, the visually striking structures generate an outsized amount of attention — from condos hovering above a medical clinic in Harlem to the units sticking out of a supertall skyscraper hundreds of feet above the landmarked Arts Students League building on West 57th Street.
The buildings department said it does not keep track of how many cantilevered buildings there are in the city, and even finding out just how many air rights deals there are can be tricky.
Ben Carlos Thypin, who heads the real estate investment advisory firm Quantierra and has worked on similar transactions, analyzed property records and said he’s been able to identify an average of 24 air rights deals a year since 2013. But he said tracking the actual number is hard because the same documents are used for a variety of deals.
Thypin said the scene on the Upper East Side certainly stands out because a separate tower is rising right next to the cantilevered complex.
The developer behind that project is using an old nail salon on the ground floor as construction headquarters, with blueprints tacked to the pink and yellow walls, beneath fading aphorisms like “Laughter is the best cosmetic, so grin and wear it!”
But Thypin said the whole situation could have been avoided with a “predictable buy-out system” that would allow tenants of the tenement building to make money in exchange for leaving, while allowing the developer to “build more units to help alleviate our city’s housing shortage.”
“Instead those tenants are surrounded by construction in the short-term and occupying degrading apartments in the long term,” he said. “All while the former landlord is richer for having been able to sell an ancient, yet unremarkable building for meaningfully more than it would be worth in a functional housing market.”
‘What are you supposed to do?’
As with pretty much every large-scale development, others have strong opinions, too.
A neighborhood preservation group called Friends of the Upper East Side hired an urban planner to challenge the base and entryway of the cantilevered complex because they said it violated zoning rules. The effort failed.
The planner, George Janes, said the building definitely looks “weird” — and, he thinks, still does violate the zoning code — but also splits the difference between preservation and new development.
“There’s a lot of value in preserving the existing buildings that are there. We can never build those again,” he said. “But it’s kind of the best of both worlds.”
While the developer gets to build bigger, the neighborhood keeps some “fine-grain history” that would otherwise be demolished, he added.
Housing experts and advocates say the condo projects actually deepen the city’s housing shortage because at least one of the new towers will contain fewer units than the buildings it’s replacing.
Paul Schwartz, a retired pharmacist who owns a condo across the street, said the construction is annoying and blocks his sunlight, but he was also philosophical about the ever-changing cityscape.
“We bought the apartment because it was so sunny and now I have these two enormous buildings across the street,” he said. “That’s progress. What are you supposed to do?”
That’s the question still facing tenants inside the building. The rent-regulated tenants say they aren’t going anywhere.
“I want a doorman, an elevator, a gym and maybe a rooftop garden, but it’ll be $5,000 or $6,000 to get anything like that,” said Humer, the pianist. “It’s a strange situation. But because it’s somewhat affordable I’m going to stay and enjoy the city as long as I can.”
And Green, who moved in just six months ago, said she and her husband might stick around, too.
Despite the noise, dust and stress, the rent’s pretty good compared to the rest of Manhattan. She said they may sign a new lease in the spring. Construction is supposed to end in 2025.
“I do think as New Yorkers, we just put up with a lot,” she said. “And you kind of just assimilate at the end of the day.”
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