about the project.
One of the most pressing problems for working artists in New York City is the cost and availability of studio spaces. Currently, Bushwick, Gowanus, Greenpoint, Long Island City, and Harlem provide concentrations of a studio spaces. Williamsburg was home to a large number of artists and studio spaces, but the gentrification of the area by developers and professional classes has transformed the formerly underutilized industrial spaces into luxury condominiums and boutique hotels. The property values in the area have skyrocketed since the 1970’s and 80’s with development rapidly increasing over the last decade.
Consistently, since the 1950’s artists have occupied areas of the city that were in some way underutilized. In the case of Soho, artists squatted and occupied buildings condemned by Robert Moses for his never realized plan of bridging the East and West Side Highways. The concentration of artists studios were followed by the development of commercial art galleries, and eventually converted into a residential and retail district, but for decades, Soho was the center of the New York Art World.. In the early 90’s many galleries moved to another underutilized section of the city, Chelsea, due to the decline of industry in the area. Over the last decade, Chelsea transformed into the central hub of the commercial art world in the city, but it has never been an artist’s community like Soho, the East Village, Williamsburg, Bushwick, or Gowanus. Unlike Chelsea, these areas were and still are able to provide both work spaces and residential living spaces at ‘reasonable’ costs to artists. This situation is changing rapidly in Bushwick as more artists seek out studios in the desirable artistic community. While there are a great number of artists in Bushwick, there are many more non-artists including professionals who also seeking out residential housing in Bushwick due in some part for its reputation as an artistic community. As Bushwick transitions from an industrial area into an arts and service driven economy, landlords are presented with an increasing number of options for renting, leasing, and selling their properties. The major issue here is that landlords can transform commercial studios into residential housing or sell their properties for incredible profits to real estate developers. Landlords can make significantly more money renting to professionals than to artists, who as a class, are relatively poor compared to their peers with similar levels of education. Generally, most artists are unable to compete economically with the wealthier classes or small businesses for control and access to commercial spaces.
Eventually, as was the case with other art communities like Soho or Williamsburg, artists will be priced-out of Bushwick without any remuneration for the cultural value they add in making areas more desirable to wealthier classes, while also being blamed for their role in the cycle of gentrification including the displacement of existing residents of communities like Bushwick. While artists can and should lobby for their communities, fundamentally the decision is not theirs to make. The use of property is determined by landlords within the limits of existing zoning laws, which can also be rewritten to suit the needs of developers. The logic of capitalism and the economics of growth is to seek a return on an investment, either through an increased sale price or rental price. It is in the property owner’s interest to see property values increase. As artists contribute to developing the cultural value, specifically in the spheres of Street Art and Visual Art, of an area, exemplified by this year’s huge turnout for Bushwick Open Studios and the proliferation of art galleries, landlords discover that they can increase rents and earn greater income from their personal investments.
This is wonderful if you are a landlord in New York City or a property developer, but it is also a depressing reality for artists like myself. I rented a studio in Williamsburg for over three years at a fixed rate from a 21 year lease holder below market value. The building was recently sold to a development group by the landlord for $68 million dollars, which he bought for $13 million in the 80’s. The development group plans on tearing down the building and replacing it with a boutique hotel marking the final transition of Williamsburg, for me, from a creative community to an international tourist destination for wealthy foreigners. None of the tenants in the building had any say or input in the sale of the building, and who could argue with the logic of such an enormous profit from the sale? From the landlord’s perspective, is the deal of a lifetime and the realization of a small fortune. The economic gain clearly outweighs and social or cultural impact on the lives of the tenants. Here one individual is presented with a decision about the future of a building relative to the economic interests of the development group with money and the current tenants who cannot compete. The city sees a boutique hotel and the commercial development as a money multiplier and often shares developers’ interests in ‘growing’ economy. The boutique hotel will create construction jobs, service jobs, while increasing tourism and spending at the retail stores and restaurants in the community that will ultimately increase city tax revenues. Simply put, individual artists cannot compete economically with developers, although their role in the food chain of economic development is often unaccounted for and certainly never remunerated by the city or state for their role in making the neighborhoods attractive to developers and wealthier professional classes. As Caroline notes, artists are sometimes renumerated in non-monetary ways by their access to wealthier classes. It’s an important distinction to understand that as a class, artists are often materially poorer than peers with similar levels of education. Artists are then displaced to less desirable (to developers and professional classes) or underutilized areas of the city like Bushwick and begin the process all over. Unfortunately, in the case of Bushwick, the development is happening with increasing speed. Further, the development that displaces artists also displaces existing residents as well, who are also likely to be low-income, working-poor, and working class families. They are also forced to relocate in the face of increased competition for housing from wealthier individuals and businesses who are willing to pay much higher rents, often without question or likely an understanding of how they their activity will impact the existing community.
Although lower-income and immigrant communities are often the most vulnerable to displacement, artists are also vulnerable to the same processes. There is a greater awareness among artists of the impact of their activity on communities and ironically, how it precedes their own displacement along with the existing communities.
This paradoxical knowledge is too often met with with resignation and feelings of inevitability. Historically this process ends with a migration of artists to some other area, but New York City is a finite space, and there are only so many permutations of this process before there will be no viable alternatives for low-income artists to afford housing and studio space. It’s difficult to imagine artists living and working on aging cargo ships off the coast of the Rockaways.
Instead of meeting this paradoxical knowledge with resignation, artists might consider an alternative, which involves taking control of the decision making regarding the use of the properties they inhabit by buying the commercial properties before they become economically desirable to competing groups and maintaining sustainable rental situations for the long term.
I would propose creating a plan for artists and other working creatives to buy a commercial property as a trust or corporation that would hold the building in perpetuity as studio space. This is poses a stewardship model based on collective need within the capitalist market system. Private property and ownership are not abolished, but the terms are modified to provide a way around the decision making of an individual owner or developer.
There are a few key ideas to consider before getting into the complicated reality of this very idealistic proposal that need to be articulated. First, no single individual or group would own the building. The basic premise is to create a trust, foundation, or corporation that would as closely as possible allow for the conditions that a building could own itself. The idea here is to orient ownership away from individual ownership and the profit motive. Practically speaking, a business entity may be the best way to legally own the building as an asset and manage its interests.
The building would have a few major, inalienable interests included in a clearly defined mission statement that would be represented by participants in the project. The first interest is to provide studio spaces for artists and working creatives at current market value necessary to pay for itself, and to keep the rents fixed and below market value in perpetuity. The second interest would be to use any accrued value for the building to replicate itself. The third interest would be to subsidize a certain number of artists’ studios should capital be available after expenses and reinvestment who were not part of the initial cohort. The fourth interest would be in providing a limited number of ground floor spaces to commercial and retail businesses in fields relevant to the arts and surrounding community to provide revenue to support the preceding interests. Artists don’t necessarily need ground floor spaces or the foot traffic that street access affords. This is also an opportunity to create a public use space for the community or provide an essential service to the community.
What this requires, to be clear, is that any individual participants or investors would be acting on behalf of the building’s interests, or its mission statement. This would require participants to adopt a hypothetical perspective of the building itself, not even the trust or foundation, and act as stewards of the building’s primary interests. No individual participant will be an owner of the building or any spaces within it. If an individual makes a capital investment during the founding of the building, they will be doing so on behalf of the building. The building does have a fifth interest in remunerating any initial capital investments with a modest return if possible. All participants would have to realize that this is not a for-profit enterprise or seek ownership of a space (This includes subleasing for a profit).
The goal of the building is to provide a stable working environment for artists with a fixed or at least rent stabilized rental structure for the duration of their use of the space. In market terms, this would provide long term savings as the cost of renting a comparable studio space would steadily rise in other situations, before likely being redeveloped into luxury condos. The fixed rent would provide an economic incentive for artists to participate and even make an initial investment as opposed to making a return through the eventual sale of the space, or shares in the space. This may also help forestall the migration of artists by breaking a link in the process of gentrification and end the migration of artists’ communities from place to place, while encouraging a solution that includes integration rather than displacement; or cooperation instead of competition. There is a real opportunity to share the knowledge it takes to collectively buy property with existing residents and non-artists the in the surrounding community and operating in solidarity with their interests. One example might be attending community board meetings in significant numbers to support local representatives fighting luxury housing development. To do this, we have to communicate, raise awareness, and develop mutual advocacy strategies to help each other. Cooperation can’t stop at the boundaries of the building.
The sixth interest of the building is also to provide a transparent model for its replication by others who find the building is at capacity. Instead of appearing exclusionary or limited, the building would be able to provide interested groups with a practical manual of how to organize, raise funds, and establish another “yellow building” themselves. This also serves the building’s second interest in replicating itself.
This leads to the final, seventh interest of the building, which is to establish a legacy for itself by supporting artists within a market system through the application of cooperative, communal principles, as opposed to competition. By working together, pooling resources, attracting cultural and philanthropic investors, artists might be able to challenge the current economic order and establish some control over the decision-making for their own community and gain some real agency.
This is my proposal for The Yellow Building, or towards a building that owns itself, in very broad strokes, which I acknowledge is very idealistic and devoid of the overwhelming number of legal, economic, cultural, and social challenges the project faces. In general, I do not believe that these are insurmountable, but I also realize it is a monumental challenge and if it was easy, it would already exist. Having learned a little bit about intentional artistic communities and cooperative studio spaces like Westbeth, this model’s most radical feature is orienting ownership away from individual self-interest towards the building’s interests. It is an imperative that the building’s interests be put first. In retrospect, this sounds a little new aesthetic or an object-oriented ontology, but to make this happen, we must consider the building to be a thing with its own interests that must be represented before own. It’s
In terms of strategic planning, my first suggestion at the impetus of Caroline Woolard, is to form an exploratory committee to conduct a feasibility study. The following are just some of the issues that would have to be studied and assessed to determine if this is just pie in the sky, big idea daydreaming or a plausible alternative to the status quo of private property ownership:
I’ve started working with a small group including Jules DeBalincourt, who initiated a large public discussion about property in Bushwick, Lynn Sullivan, and Paddy Johnson and we have formed something of an exploratory committee to look at strategic planning and feasibility. We’ve reached out to a number of stakeholders to discuss what this project might look like.
• Establishing the legality of stewardship for the building through the creation of a trust, foundation, non-profit, or corporation to represent the building’s interests. Is this even legal to do?
Yes and there are several models that will be added to a glossary of terms. We’ve been discussing an option that might involve the formation of a B-corp (benefit corporation) to create a business entity that would manage the building as an asset. This would allow us to find investors who could invest in the entity, and avoid direct ownership of the property. We’ve learned that banks will not be willing to finance land trusts and are looking for a clear business model that will outline how a mortgage would be repaid through renting spaces.
• Clearly and contractually defining the terms of participation and stewardship of the building’s interests. How would decisions be made? Who would be making the decisions and in what format? Consensus, direct vote, committee, board?
We are still deciding on the kind of entity that we are interested in forming and how the building would be collectively owned and managed.
• If there is legal grounds for representing the building’s interests while providing participants legal protections, then the planning team would have to consider the financial costs of the project.
We are starting to do some basic cost analysis of real estate prices, mortgages, taxes, and are looking for help with this. We have found there are many legal models for cooperative ownership including specific language in a covenant that would allow for certain restrictions in conveyance (selling space/shares in the future) and use (artists/creative studio space).
• How much would it cost to buy a large commercial property? What is available in the city? How much would the down payment cost? What would the mortgage payment be? How many studio spaces and at what rent would be required to cover the building’s expenses including the mortgage, build-out, maintenance, utilities, insurance, and property taxes? How long would it take to repay investors?
This will have to be part of a cost analysis.
Quick case study: Note these numbers are sandbox only and do not include many hidden costs such as non-usable space, insurance, maintenance etc.
$1.2mn down payment
$21,697.00 monthly mortgage
$1.60 a sq/ft to cover mortgage
$2.25 a sq/ft generates $117,636 per year beyond the mortgage
Things to consider; retail space in the ground floors where the rent is $5 a sq/ft
• Based on a cost analysis. how much money would participants be required to invest financially in the project? How could other artists get involved if there are extra studio spaces for rent? What would be the minimum and maximum financial commitment to become a resident artist? How would investors be attracted to the project? What, if any, return might they be able to see to encourage investors? What alternative returns might they expect including naming rights or art trades?
This is crucial if we are interested in tackling problems of privilege among artists were a small number of artists earn most of the money in the art market. In one of our most realistic scenarios, we might have ten artists with $100,000 to invest in the project. The immediate issue that comes up is how the artists could be treated as investors who will recoup their investment with a possible return that will not discourage an artist from putting the money into the project as opposed to some other investment strategy. If it becomes a situation where the ten artists become 10 individual landlords with their own individual units and space to rent, it will more closely resemble a more traditional co-op model with longer term complexities involving conveyance and use.
• If the project is found to be feasible, how would the planning team move forward into an acquisition phase? What would be the timeline for executing the project?
Real estate prices are rising quickly and yet there are many available commercial spaces throughout East Williamsburg and Bushwick. The second part is not true, while there may be many commercial spaces available, many of them are not highly suitable for the type of creative studio spaces we are looking for. There is a limited number of existing spaces, and it has been proposed that building up on top of existing single story commercial spaces through targeted variances in zoning might be a possible solution, but also would require much more money obviously and a great deal of expensive planning. It’s very difficult to achieve re-zoning, but additional FA rights (foot area) rights might be attractive to investors. One of our planning meeting guests outlined a very interesting strategy to counteract residential real estate pressure by adding value to commercially zoned areas to preserve and create working class (anl participant against the challenges of being an artist and life? What contingencies will be in place in the event of life or career changes?
We haven’t made much progress here. d creative class) jobs for a much broader cohort that artists or any single group alone.
• Also, if the project is feasible, how would participants be able to exit the project? What would be the terms of the financial commitment to project the project and the individua
• Should the project move ahead, how will the development of the studio spaces occur? What would the build-out involve from the founding participants beyond a financial commitment? What would be the expectations for governing and maintaining the building?
• If the building were large enough to allow for additional renters, what would the selection process involves? Lottery, application, or some other process of selection? What would the contractual and legal terms of the rental agreement be to protect the building’s interest and prevent for-profit sub-letting?
This is one of the most difficult issues that we still haven’t discussed in any depth, other than worry about it. At this point, it seems that involvement is a possible self-selecting mechanism, although no answer will serve everyone who would want to participate. It’s essential that whatever we do has the possibility of being replicated and expanded to serve as many interested parties as possible that are not already served elsewhere.
• If the project were to be executed, how would it be systematically documented to provide a manual for replication? How would it be distributed to interested parties?
We are not working with any pure model of transparency at this point, but are making efforts at documenting our meetings and creating resources based on our research. Lynn has created and continues to work on a resources and information doc.
Clearly these are only a few questions that I have thought of without ever having owned a property or participated in a cooperative studio situation, and these are short term questions aimed at the establishment of The Yellow Building, not its future. The name, Yellow Building, comes incidentally from using my friend Jade’s pack of American Spirits to illustrate certain ideas about the building to him. It’s simply the name I have in my head for the project. Caroline Woolard, whose thinking along with the Arts and Labor working group and the Mapping Working Group including Erin Sickler, challenged me to think about an alternative to the current real estate situation facing artists. Caroline also challenged me to think deeply about the scale and feasibility of the project in its inception. She pointed out the enormous commitment the project requires in terms of time, money, trust, and labor. Her experience with establishing and running a cooperative studio for 5 years has given her a perspective on the idea that I do not have. Intellectually, I have some understanding of the responsibility a project like this would require, but even if we do not prove to be up to the task at this point in our lives, given the diversity of the participants this project would require, I still believe that a feasibility study is very much worth the time and and effort. It might yield, at the very least, a proposal for others to execute and to create new approaches and alternatives to individual ownership of property as an investment that severely limits the decision-making of artists and their communities in New York.
about the artist.
William Powhida (b. 1976, New York City) is an artist and critic. Powhida’s work, reflects his background as an art critic, and addresses the politics and the establishment that controls the assessment of value in the contemporary art world.