Big City Living

With bargains to be had in New York, Houston, and San Francisco, city apartments are gaining popularity as second homes

Recall Cary Grant wooing Deborah Kerr on a high-rise balcony in An Affair to Remember, the lights of Manhattan twinkling behind them, and you pretty much get the popular image of the pied-à-terre. Meaning "foot on the ground" in French, the term describes a city apartment that is not the occupant's primary residence. The pied-à-terre has long been the almost exclusive domain of wealthy globetrotters who not only prefer their own small, elegant abode to an anonymous hotel room, but also want a sense of belonging locally — even if only for a few days each month or year.

But the pied-à-terre is no longer just for the very rich, nor is it a phenomenon limited to New York. Many first-wave baby boomer retirees are eschewing palm-shaded resorts in favor of second homes in vibrant, exciting cities. And because of the glut of high-rise apartment buildings that hit major urban centers just as the economy tanked, cities from Manhattan to Houston to San Francisco are seeing some bargains in the pied-à-terre category.

Janet Myrin is one of many people seizing the moment. A native of Queens, N.Y., her primary residence is in Little Compton, R.I., a bucolic New England town. But longing for a place in her native city, she recently acquired a one-bedroom pied-à-terre on Horatio Street in Greenwich Village. The apartment allows her to be close to her daughter, an aspiring actress, and to enjoy all the excitement and cultural life Manhattan has to offer. Not only did Myrin get the apartment at a price that she says would have been impossible three years ago, but the purchase also fulfilled a longtime dream: a city apartment with a view. "In past apartments I have lived in, I looked at a brick wall," she points out. "Now I look at the Empire State Building and the Chrysler Building."

Drawn to Manhattan

As of September, apartment values in New York's West Village were down about 17 percent compared with last year, according to the Zillow Home Value Index. Real estate broker Harry DiOrio of Prudential Douglas Elliman says that over the summer, there was a noticeable increase in people looking at Manhattan studio and one-bedroom apartments, the preferred pied-à-terre configurations.

"The pied-à-terre buyers have a different agenda," DiOrio says. "They don't want to be in a quiet, leafy neighborhood. They want to be right in the center of things." DiOrio recently sold a tiny, 300-square-foot apartment on 57th Street for $350,000, but he also has multi-million-dollar listings for 3,000-square-foot-plus aeries a few blocks north at 15 Central Park West, which is emerging as a preferred building for ultra-wealthy pied-à-terre buyers. "Small is a relative term," he notes.

For buyers seeking bargains, DiOrio recommends checking out buildings constructed in the 1950s and '60s, which in general are not as elegant on the outside as their pre-war counterparts, but have spacious layouts and solid construction. On the other hand, thousands of new condominiums have been built in Manhattan in the past decade alone, and many have amenities like gyms and swimming pools, which "are important to a lot of the pied-à-terre market," DiOrio says.

DiOrio and other real estate experts stress the importance of understanding the difference between a condominium and a cooperative. About 70 percent of Manhattan's residential buildings are cooperatives.
"Co-ops are much more restrictive about whether an apartment can be used as a second home," says Noah Rosenblatt of UrbanDigs.com, a New York real estate blog. "They feel that a second home is more vulnerable to a financially distressed sale, and that that could reduce the investment value to other shareholders."

To buy a co-op, the prospective resident must be approved by the co-op board. Rosenblatt estimates that the majority of Manhattan co-op boards restrict whether a unit can be used as a pied-à-terre. He urges prospective buyers to carefully study the co-op documents before considering a purchase. An increasing number of newer high-rise units are condominiums, which Rosenblatt says are much less restrictive.

San Francisco Treats

Across the continent, in Northern California, Alyce Desrosiers and Michael Katz have a 100-year-old house in Sausalito as their permanent home. They recently acquired a one-bedroom pied-à-terre at the Infinity, in San Francisco's South of Market (SoMa) district. The twin-towered glass complex is close to the Bay Bridge and has stunning views of the city and San Francisco Bay.

Often spending weekends in the city, the couple says they want to feel like San Franciscans when they are in town. "We very much like the feeling of belonging," notes Katz, a native of Israel. "I think more and more Americans are abandoning the idea of a big suburban home. It's part of a whole move toward urbanization."

"San Francisco has always had a strong pied-à-terre market," says Vanessa M. Seidler, a broker with Pacific Union International-Christie's Great Estates. The SoMa District, for example, is especially appealing to urban sophisticates with its museums, lofts, and funky, offbeat retail shops. Market values of condominiums in SoMa have dropped 20.1 percent since last year, according to Zillow. Seidler says that while prospective buyers waited out the summer, hoping to time a market bottom, a sizable number resurfaced in early autumn. "Because of the difficulty in getting financing, cash buyers, especially, have the pick of the litter," she adds.

Going Big in Houston

Houston, capital of America's "third coast" — the Gulf of Mexico — has long been a place of single-family homes and garden apartments. But the high-rise pied-à-terre lifestyle is becoming increasingly popular in the Bayou City. According to local broker Rosie Meyers, a developer built one of Houston's first residential high-rises back in the 1970s, and to everyone's surprise, it sold out immediately.

"Now," Meyers points out, "we have high-rises everywhere." Most are concentrated in downtown and the Post Oak Galleria area. What distinguishes Houston from other cities is the wide price range of high-rise city apartments available - from studios as low as $150,000 to penthouses selling for $5 million and up.

While more egalitarian than they used to be, pied-à-terres continue to appeal to the globetrotting set. Houston native Therese Garner has homes in California and the south of France but continues to have a "foot on the ground" in a complex called Four Leaf Towers in Houston's Post Oak Galleria section. The twin towers were built at the height of the early-1980s Texas oil boom and designed by renowned architect Cesar Pelli. "Houston is a very sophisticated city," Garner says. "No matter where else I live, I'll always be a Texan. I had a big life here, and I didn't want to give it up."

Life is indeed large for today's pied-à-terre owner. Even though Cary Grant and Deborah Kerr are both gone, the cosmopolitan sophistication represented by the city apartment endures. And it's being enjoyed by a whole new generation of owners across a wide economic and geographic spectrum."

— James McCown