Great article here by City Limits' Matt Schwarzfeld:
HPD’s units have sold before construction has even started, at prices unheard of in the area, bringing new life and money to the peninsula. But most of the privately developed units, built in nearby neighborhoods with permissive zoning regulations that allowed large units to be built on small lots, have not sold nearly as well. The developers overbuilt in neighborhoods with fragile or nonexistent markets that have since crumbled.
Because they consider their investment already lost, many speculative developers have struck deals with the city to house the formerly homeless in order to recoup at least some money. Some of these developers-turned-landlords have neglected basic maintenance responsibilities. Concentrations of absentee landlords plus high-needs people with minimal access to basic services and amenities means entire neighborhoods have been left neglected. “They said the Rockaways would be the new Hamptons,” said Anthony Green, a lifelong Far Rockaway resident in his mid-40s. “This isn’t the new Hamptons. More like the new ghetto.”
IN FAR ROCKAWAY, PRETTY BEACH MEETS HOUSING BUST
Compounding this problem, a lot of this new construction is low quality. Glaring problems are visible everywhere. Doorframes are falling off, vents have been kicked in, and windows are boarded up. One conspicuous example is a 14-story building on the beach. According to a construction worker who has been on the site from the start, early in the project a foreman made an error in reading the blueprints, so the balconies face inland rather than toward the ocean. Such incompetence is common.
Because these small developers built without lining up a buyer prior to construction, they found themselves sitting on expensive investments they couldn’t sell. Short of shuttering the properties or letting the bank take them, developers only really had one option: turn to government-subsidized clients referred from homeless shelters. Though renting compromises their future ability to sell the property, many owners opted to recoup some of their expenses rather than suffer a complete loss on their investment.
“For the longest time, everyone thought Rockaway wasn’t an attractive place to invest,” says former Queens Borough President Claire Shulman, who served from 1986 through the end of 2001. “But it is an attractive place to invest. It could be every bit as beautiful as the Hamptons.”
Claire obviously hasn't been over the Cross Bay Bridge lately...