The discussion, as so many in New York tend to do, turned to real estate prices.
With the success of the tech sector (and other sectors) in Brooklyn has come expense. The issue kept coming up at our recent meeting of more than a dozen community leaders in a stakeholder meeting organized by Technical.ly Brooklyn. The meeting preceded Technical.ly’s Super Meetup, which drew more than 150 attendees to creative agency Work & Co’s beautiful office in Dumbo.
Office space in Brooklyn now frequently rivals Manhattan in price and that can be a daunting task for small companies just starting out (or any company, for that matter).
“We’re in Dumbo because we found affordable office space,” said Agrilyst founder, Allison Kopf, who started her company at the Urban Future Lab at NYU. “Even growing out of an incubator space it was a challenge to find space that was affordable.”
The sentiment seemed to be shared by many in the room.
Office space costs more because demand for it is higher, not the worst thing for a tech scene trying to establish itself.
“In 2002 I was on Fulton Mall Partnership and no one wanted to be there, no one wanted to be here [in Dumbo],” coworking space CoLab-Factory founder Shane Barbanel said. “The fact that we’re all here and talking about this is fucking awesome. Some people may not stay but a boatload of people want to be here.”
CoLab-Factory is one of many new coworking spaces that have opened up in Brooklyn in recent years. Another is New Lab, the Brooklyn Navy Yard office space for companies geared toward manufacturing and design. It’s not just that demand is increasing, supply is also, just not fast enough.
“At this time last year we were hoping we could fill 84,000 square feet and now we’ve only accepted 19 percent of applicants,” said Molly Erman, the vice president for strategy and communications at New Lab.
The price of real estate extends beyond just office space, though. It makes workers more expensive to hire. Kopf said that she had trouble hiring engineers in the city and that her team now is mostly remote, including workers in the Hudson Valley and Buffalo.
Creative agency L+R also has its dev team outside New York. Principal Alex Levin said he wasn’t able to compete with Google and Facebook for talent and eventually found a good developer in Barcelona, where L+R is now expanding.
Since Brooklyn’s competitive edge as a location is its creativity and artistry, there’s a real worry that the increasing price of space could price out the people actually doing that work. If only wealthy people can afford to live here, how will it be any different from Manhattan?
“The people who make the most money in Brooklyn don’t give a shit about Brooklyn,” railed Joseph Shahadi, the founder of The Art of Brooklyn film festival. “The brand of Brooklyn is most valuable to people who don’t live in Brooklyn. I think on a personal level we would call it gentrification and I think there are people who take from this place and don’t give back.”
At the end of the day, it’s an OK problem to have, competing for space because so many people want to work here. But it’s certainly a theme to keep an eye on, how can Brooklyn avoid becoming a victim of its own success?