Development in WesternQueens. Shutterstock.

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NEW YORK CITY- Some condodevelopers have abandoned selling units because they've only beenable to sell 10 percent of the property to which they resort torenting the remaining 90 percent. This trend hearkens to weakeneddemand for condo units, especially in markets where there is alarge affordability gap between high-end apartments and affordablehousing, Marc Heller partnerat law firm Akerman, tells GlobeSt.com. 

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"A lot of condo developments thatkicked off several years ago, many of them literally or effectivelycome to resemble rentals than condos," Heller said. "Some condosdevelopers have abandoned selling units cause they're only able tosell 10 percent and rent the rest of the 90percent." 

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Heller refers to thesecondominium developments as 'busted condos.' Some of theproperties, Heller and his clients take over management toimplement the apartment model when existing investors want out orto pivot. And in some cases, some owners may not even be able tosell the remaining slated condo units because some prospectivecondo-unit buyers prefer not to buy into a building where there arerenters instead of owners, he said. 

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With the condo marketexperiencing challenges and lackluster demand, affordable housingis looking more promising. According to a recent GlobeSt.com article, due to the lack of market-rate housing toaccommodate the middle-class incomes in the 70,000 to 75,000 range,this section is being squeezed by the affordability crisis,according to Heller.  

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As the gap between higher-endapartments and value-add apartments grows, Akerman clients see areal opportunity to take apartments and turn them into affordablehomes for low-income to middle-income rents, driven in part by thenew construction of luxury apartments that have saturated themarket, Heller said.

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Mariah Brown

Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.