Keep In Mind That The Yearly Interest On $105,000 Of Credit Card Debt At An APR Of 12% Is $12,600, Or $1050 A Month, Which, If I’m Not Mistaken, Would Get You A Sweet Rental In Many New York City Neighborhoods

Brooklyn man discovers the joys of home ownership:

Even if $260,000 was a steal by New York City standards in 2004, David Petersen found the 1,100-square-foot row house, on 18th Street near Green-Wood Cemetery in Brooklyn, stiflingly narrow at 13 feet 7 inches wide, with dim light and low ceilings. “The ceiling fan would have sliced off your head,” he recalled, and the walls and floors sloped at odd angles. The home inspector’s report jumped with exclamation points: “Bowed floors!” “Lead pipe to water supply!” “Roof in bad shape!” “Walls not plumb!”

But for an independent filmmaker with no full-time job and not much in the way of savings — living, as Mr. Petersen says artists do, “in a quaking state of fear” — home ownership was an irresistible lure.

Renovations were in order, and the man put $75,000 towards them, basically the cost of a modest bathroom:

“I started with really low expectations,” Mr. Petersen said. “I wanted level floors and a dry basement.” But soon after construction began, he received a call from his next-door neighbor Vinny DeMarinis, a retired fireman who had grown up in Mr. Petersen’s new house. “How much insurance have you got?” Mr. DeMarinis asked. “I got a hole in my wall the size of a Buick.”

And, Mr. Petersen said, “therein began my sadness.”

. . .

It turned out that the walls between the houses there were only five inches thick; banging on a wall in Mr. Petersen’s house sent tremors down the street, and especially into Mr. DeMarinis’s home. “Any work done in any house,” Mr. DeMarinis said, “it’s really a block activity.” Each time he spoke with Mr. Petersen, he would greet him, “Dave, I’m sorry I ever met you.”

There were more surprises. The foundation wasn’t bad; it was nonexistent. The previous owner, Mr. DeMarinis’s brother-in-law, had carved his own basement by digging below the house and carting out five-gallon buckets of dirt. The house was structurally unsalvageable.

With renovation costs almost tripling the cost of the house, the man resorted to creative, Enron-esque financing:

Having siphoned off some of his loan money to pay for a print of his film “Let the Church Say Amen,” about a Washington storefront church, which was screened at the Sundance Film Festival in 2004, Mr. Petersen was approaching pennilessness, with the house nowhere near completion. He applied for a $75,000 line of credit through his film company, Beaufort 9 Films. He begged money from relatives, convincing his mother to mortgage her modest Takoma Park, Md., condo and nearly causing a familial rift. “I became like an addict,” he said. “I tried to get money from everywhere.” As renovation costs climbed to $390,000, he resorted to old-fashioned indie filmmaking methods: he used his credit cards.

But ultimately the man survived, whittling down his monthly payments to the cost of one or more used cars:

In the end, it was hardly a disaster. The bank reappraised the house at $1.25 million, allowing Mr. Petersen to take out one last loan, wipe out his $105,000 of credit card debt and lower his monthly payments to the $3,000 range (he has had to work a couple of full-time freelance jobs, as a television editor, to make them). “Suddenly I have this thing called equity,” he said. “I have worth in the eyes of the bank” — and, in theory, a little more leverage when it comes to paying for his next film.

And the man lived happily ever after . . .

Jacob Riis Porn

The Village Voice’s always-enjoyable Ten Worst Landlords feature is back, and it doesn’t disappoint. A sample:

David Melendez owns a swath of dilapidated, vermin-infested, crime-ridden slums hidden on a forgotten block of Jefferson Street in Bushwick.

. . .

Melendez’s four buildings at 253, 255, 258, and 260 Jefferson have a total of 473 pending code violations. He appears to be in no rush to fix them: HPD has recently made 49 emergency repairs to those buildings and charged Melendez $23,029.

. . .

Agustina Cricantos, who has lived at 260 Jefferson for 25 years, says that the only time tenants ever see Melendez is on the first of the month — when he comes to collect the rent. She pays $600 a month for her two-bedroom apartment and complains about a window in her kitchen that doesn’t open, leaks in the kitchen ceiling, and a faucet that drips constantly. The bathroom walls are rotting, and the toilet bowl isn’t mounted to the bathroom floor, causing the bowl to shift when in use. The light fixture in the bathroom dangles from exposed wires, and a large hole in the wall allows rats to scurry through. After her first interview with the Voice, HPD replaced the window in Cricantos’s kitchen, at the taxpayers’ expense.

“I had horrible bedbugs coming from one of the walls in the bedroom into my mattresses,” she says, “so I had to throw them out and buy new ones. I had to buy a new crib mattress for my daughter.” The front door to the apartment, contaminated by lead paint — a serious hazard known to cause brain damage in children — was replaced by the city this year. But other areas of her apartment that also contain lead paint have not been repaired. A three-year-old lives in these dangerous conditions.

Melendez tells the Voice that he “wouldn’t mind getting rid of my Mexican and Ecuadorian tenants,” adding that “in California, they don’t even rent apartments to Mexicans.” (He says he’d prefer Chinese and Indian tenants because they pay higher rents.) The apartments are rent stabilized, so legally he can raise the rent by only $45 to $50. Cricantos claims that one of the tenants was charged $200 for a copy of his lease and that Melendez frequently raises the rent when the city makes repairs.

And That’s How The Annual Celebration Of “Stabilization Day” Came To Pass

The Rent Guidelines Board’s annual hearing to decide whether and/or how much to raise rent on rent-stabilized apartments functions as a benign ritual for tenants to take out their frustrations about rising housing costs:

Amid total pandemonium, the Rent Guidelines Board last night voted to hike rent-stabilized rents by 4.25 percent for one-year leases and 7.25 percent for two-year renewals — infuriating tenants who said they no longer want to participate in the annual process.

The 5-4 vote came after more than four hours of mayhem, with more than 300 angry tenants, armed with noisemakers, drowning out virtually every word uttered by RGB Chairman Marvin Markus.

. . .

While protesting tenants were unhappy with last night’s outcome, they were pleased with their disruption. “We did a fantastic job,” exulted Jumaane Williams, executive director of the Tenants & Neighbors coalition. “We shut it down longer than it’s ever been shut down before.”

Tenant leaders said they decided months ago to disrupt the annual rent-setting meeting because they considered the deliberations “a sham” that always produced a pre-ordained result.

. . .

The meeting at Cooper Union was chaotic even by RGB standards, where screams and chants from the audience are routine.

Markus, branded a sellout by tenant leaders, was interrupted so loudly and so often that he called an unprecedented 2 1/2-hour recess at 6:30 p.m.

But that had no impact.

Tenant activists ordered pizza and bottled water and were waiting in full force when Markus returned just before 9 p.m.

As a phalanx of cops stood guard, Markus tried four times to restart the meeting — only to give up as one uproar after another drowned out his words.

The fifth time, Markus simply read a resolution into the microphone. Virtually no one off the stage could hear him.

We’ll keep you posted about next June’s Stabilization Day, which will be marked by a boisterous pot-clanged march down Fifth Avenue, a peaceful protest in front of Bed, Bath & Beyond and an after-party at an establishment to be determined.

Location, Location, Location: Gravesend!

The Times explains how someone actually paid $11 million for a house in Gravesend, Brooklyn:

The multimillion-dollar teardown is generally considered a suburban phenomenon, a peculiar indulgence of the well-heeled in places of grassy splendor, like Greenwich or Great Neck. But there is a quiet, out-of-the-way section of the Gravesend neighborhood in Brooklyn where it has become commonplace for houses to trade for millions of dollars, only to be torn down and replaced with ever more luxurious mansions.

The most eye-popping transaction, the one that still has real estate brokers and appraisers scratching their heads, occurred in 2003 at 450 Avenue S at the corner of East Fourth Street, where a 3,600-square-foot house on a double lot sold for $11 million, according to a deed filed with the city.

Brokers and appraisers said it might be the highest price ever paid for a house in the borough, easily surpassing the $8.5 million paid last year for a brownstone overlooking the promenade in Brooklyn Heights, the neighborhood that is normally considered the ne plus ultra of Brooklyn real estate.

Notwithstanding its high price, the house on Avenue S was torn down last year, and a 10,400-square-foot two-story mansion is going up in its place, at an additional cost of several million dollars. Like the old house, the new one has an orange tile roof — the neighborhood’s signature motif — as well as four bedrooms, five bathrooms, three half baths, a barrel-vaulted ceiling in the master bedroom, a grand double-height domed entryway and a finished basement with an exercise room and a theater.

Keep in mind that a 10,400 square-foot house translates into thirteen 800-square-foot apartments.

But beyond the tasteful grand double-height domed entryways, this case exemplifies the oft-heard maxim “location, location, location”:

In fact, it is a very particular part of Brooklyn, one where some of the wealthiest members of an extremely tight-knit enclave of Syrian Jews compete with one another for properties on a few coveted blocks of large homes around Avenues S, T and U, between the area’s main synagogues on Ocean Parkway and its most prestigious yeshiva on McDonald Avenue.

Because devout Jews are barred from driving on the Sabbath, houses within walking distance of a synagogue carry a premium. And while that has had an impact on real estate values in other Brooklyn neighborhoods, the effect could hardly be more extreme than it is in Gravesend, where house prices have risen to astonishing heights.

“This market is not dictated by interest rates or the price of real estate as a whole,” said Frank Lupi, the president of Wolf Properties, a real estate agency in Gravesend. “The houses over here, they sell very quickly, and you’re almost naming your price at this point.”

Damn You Craig’s List, How You Get My Hopes Up

First the literal hole in the wall ($35 a month), now a tree house for $150 a month:

Williamsburg sculptor Adam Dougherty put his South Fifth St. backyard tree house up for rent as a gag — but learned that in Brooklyn’s sky-high real estate market, it was no joke.

Since last Saturday, the Craigslist.com posting has drawn more than 30 prospective buyers, renters and vacationers — even though Dougherty never had any intention of branching out into property transactions.

“I thought people would immediately take this as a joke, that it would get flagged,” said Dougherty, 29. “But the sincerity of some of these people!”

“I can’t blame ’em,” he added. “I mean, $150 for a place to stay in New York? That sounds like a dream.”

It was no dream to Gabriel, a “young artist currently sleeping in my van.”

“I’d be up for a summer of sleeping outdoors,” he e-mailed Dougherty.

Then there was Ryan, who figured out there probably wasn’t any running water in the tree house and typed this question: “If I need to, can I shower at your house?”

Although the ad said only “$150 – Tree House,” most who responded assumed the dollar figure was either for a weekend stay or the actual sale price, Dougherty said.

The year-old pinewood triangular house hovers 23 feet over Brooklyn, and fits up to 17 people at once, he said.

The 12-by-12-by-10-foot shelter is empty, except for a light hooked up to a 23-foot extension cord that runs down to his apartment.