For centuries, philosophers have asked the question: “What is art?” People interested in buying real estate in New York City’s SoHo neighborhood face a related but slightly different question: Who is an artist?
Questions of aesthetic interpretation don’t usually come up in real estate negotiations, but in New York City, several would-be residents have had their moves put on hold because the city does not consider them to be artists. In 1977 the city officially designated dozens of blocks surrounding Houston Street as “joint living-working” spaces. Under these zoning regulations, each residential unit must house at least one working artist who requires the space afforded by a large loft apartment to conduct his or her art.
For years the so-called “artist-in-residence” requirements were ignored as increasingly wealthy, and not necessarily artistic, residents moved to the area. Purchasers signed documents, called “Soho letters,” indicating that they knew about the requirement and knew that they might be asked for certification of their artistic inclinations. But since the city never came snooping, non-artists went ahead and signed freely.
However, for reasons no one seems to be able to identify, the city has recently started to crack down, and co-op boards have started requiring applicants to get certified by the city as bona fide artists before being allowed to move in.
But no one is quite sure how the city decides who is and isn’t an artist. Jon Bon Jovi and the hotelier Andre Balazs are both city-certified artists, though it’s hard to imagine why either needs a large space to conduct his “art.” A jewelry-maker and a photographer, however, were both recently rejected. In the photographer’s rejection letter, which The New York Times obtained, the Department of Cultural Affairs said the work submitted did not show enough “focus, quality and commitment.”
There is plenty of alleged art on display in museums that I don’t think shows much focus, quality or commitment. I also think corporate management is more art than science. So, if I were on the committee at the Department of Cultural Affairs, could I deny certification to someone who paints all-white canvases and grant it to a brilliant CEO? I wrote a book. Does that make me an artist? Does it matter that the book was on financial planning?
“The law defines artists broadly and includes a variety of disciplines,” Danai Pointer, a spokeswoman for the Department of Cultural Affairs, told The Times. But the city refuses to provide any greater specifics on exactly what criteria it uses to decide whether a particular person fits into that broad definition. It’s almost impossible to imagine a way the law could be enforced without being arbitrary and capricious.
The SoHo artist-in-residence requirement is just one of the many convoluted rules governing New York City housing. Rent control and rent stabilization regulations entail a complicated calculus involving when the building was constructed, when the tenant moved in and the tenant’s income level. Some buildings, like the 97 city-sponsored Mitchell-Lama developments, offer controlled rates, but require would-be tenants to first pass through a maze of waiting lists and lotteries.
According to the New York City Housing Authority, you can’t even hire someone to help you find the way out of this maze. A notice on the Authority’s website says in bold letters “Important: No payment or fee should be given to anyone in connection with the preparation, filing or processing of an application for Public Housing.” So unless you can get someone to help you for free, you are on your own to sort out seemingly contradictory instructions such as “Application MUST be printed using a color printer. Black and white versions are still acceptable” and grammatical messes such as “You may be eligible for an apartment if the income limits of your family does not exceed the established Income Limits.”
All of this, of course, is intended to make living in New York City more affordable. However, the result is that the city — particularly Manhattan — is virtually the only place in the country where tenants customarily pay commissions to real estate agents to show them apartments. Newly employed college graduates live in shared apartments, sleep in glorified closets, or do both of these at once. Meanwhile, young people with similar salaries in other parts of the country, where markets are less regulated, live in new luxury condos.
The situation is as bad for building owners as it is for tenants. Managing a multi-family unit in New York is an exercise in politics, rather than in business or in economics, and politics is never predictable. For example, given the large number of young people who live with roommates to make ends meet, it might seem logical when renovating a building to redesign some floor plans to accommodate this type of living arrangement. However, a little-known section of the city’s Housing Maintenance Code makes it illegal for more than three unrelated people to live together in an apartment or a house. The law is hardly ever enforced. According to the Census Bureau’s American Community Survey conducted in 2008, nearly 15,000 dwellings in the city were in violation of the policy that year. The actual number is probably far higher. However, the city could decide at any time to suddenly start enforcing the law, as it did with the SoHo artist-in-residence requirement.
Yes, beauty is in the eye of the beholder and there is plenty of beauty to behold in New York. But if you want to own or occupy a building in the city, you’re likely to face some pretty ugly stuff as well. And if you want to live in SoHo, you have to get your art certified by City Hall.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
For centuries, philosophers have asked the question: “What is art?” People interested in buying real estate in New York City’s SoHo neighborhood face a related but slightly different question: Who is an artist?
Questions of aesthetic interpretation don’t usually come up in real estate negotiations, but in New York City, several would-be residents have had their moves put on hold because the city does not consider them to be artists. In 1977 the city officially designated dozens of blocks surrounding Houston Street as “joint living-working” spaces. Under these zoning regulations, each residential unit must house at least one working artist who requires the space afforded by a large loft apartment to conduct his or her art.
For years the so-called “artist-in-residence” requirements were ignored as increasingly wealthy, and not necessarily artistic, residents moved to the area. Purchasers signed documents, called “Soho letters,” indicating that they knew about the requirement and knew that they might be asked for certification of their artistic inclinations. But since the city never came snooping, non-artists went ahead and signed freely.
However, for reasons no one seems to be able to identify, the city has recently started to crack down, and co-op boards have started requiring applicants to get certified by the city as bona fide artists before being allowed to move in.
But no one is quite sure how the city decides who is and isn’t an artist. Jon Bon Jovi and the hotelier Andre Balazs are both city-certified artists, though it’s hard to imagine why either needs a large space to conduct his “art.” A jewelry-maker and a photographer, however, were both recently rejected. In the photographer’s rejection letter, which The New York Times obtained, the Department of Cultural Affairs said the work submitted did not show enough “focus, quality and commitment.”
There is plenty of alleged art on display in museums that I don’t think shows much focus, quality or commitment. I also think corporate management is more art than science. So, if I were on the committee at the Department of Cultural Affairs, could I deny certification to someone who paints all-white canvases and grant it to a brilliant CEO? I wrote a book. Does that make me an artist? Does it matter that the book was on financial planning?
“The law defines artists broadly and includes a variety of disciplines,” Danai Pointer, a spokeswoman for the Department of Cultural Affairs, told The Times. But the city refuses to provide any greater specifics on exactly what criteria it uses to decide whether a particular person fits into that broad definition. It’s almost impossible to imagine a way the law could be enforced without being arbitrary and capricious.
The SoHo artist-in-residence requirement is just one of the many convoluted rules governing New York City housing. Rent control and rent stabilization regulations entail a complicated calculus involving when the building was constructed, when the tenant moved in and the tenant’s income level. Some buildings, like the 97 city-sponsored Mitchell-Lama developments, offer controlled rates, but require would-be tenants to first pass through a maze of waiting lists and lotteries.
According to the New York City Housing Authority, you can’t even hire someone to help you find the way out of this maze. A notice on the Authority’s website says in bold letters “Important: No payment or fee should be given to anyone in connection with the preparation, filing or processing of an application for Public Housing.” So unless you can get someone to help you for free, you are on your own to sort out seemingly contradictory instructions such as “Application MUST be printed using a color printer. Black and white versions are still acceptable” and grammatical messes such as “You may be eligible for an apartment if the income limits of your family does not exceed the established Income Limits.”
All of this, of course, is intended to make living in New York City more affordable. However, the result is that the city — particularly Manhattan — is virtually the only place in the country where tenants customarily pay commissions to real estate agents to show them apartments. Newly employed college graduates live in shared apartments, sleep in glorified closets, or do both of these at once. Meanwhile, young people with similar salaries in other parts of the country, where markets are less regulated, live in new luxury condos.
The situation is as bad for building owners as it is for tenants. Managing a multi-family unit in New York is an exercise in politics, rather than in business or in economics, and politics is never predictable. For example, given the large number of young people who live with roommates to make ends meet, it might seem logical when renovating a building to redesign some floor plans to accommodate this type of living arrangement. However, a little-known section of the city’s Housing Maintenance Code makes it illegal for more than three unrelated people to live together in an apartment or a house. The law is hardly ever enforced. According to the Census Bureau’s American Community Survey conducted in 2008, nearly 15,000 dwellings in the city were in violation of the policy that year. The actual number is probably far higher. However, the city could decide at any time to suddenly start enforcing the law, as it did with the SoHo artist-in-residence requirement.
Yes, beauty is in the eye of the beholder and there is plenty of beauty to behold in New York. But if you want to own or occupy a building in the city, you’re likely to face some pretty ugly stuff as well. And if you want to live in SoHo, you have to get your art certified by City Hall.
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