Middle-Class Enclave in N.Y. Is Sold, and Tenants Worry

Thousands Fear Loss of Rent Controls in Historic Apartments

NEW YORK, Nov. 10 -- For Rosemary Heath and her family, middle-class living in Manhattan is a careful balance.

Eat out once a week, but mostly at the local coffee shop -- it's cheap. Get away each year for a family holiday, but take no more than six days off work. Go to the theater, but only once a year. Shop at thrift stores.

The details may not add up to great tragedy or luxury, but the balance -- that is, Heath's economically calibrated life -- would topple without one key factor: reasonably priced housing. Heath and her family live in Stuyvesant Town, a complex that, with adjacent Peter Cooper Village, is a last reservoir of rent-protected middle-income housing in gilded Manhattan.

Government helped build the development, 110 boxy red-brick towers with 11,232 apartments near the East River, in the 1940s to keep firefighters, teachers and police officers in the city. Many tenants fear that its recent sale for $5.4 billion, one of the largest residential real estate deals in history, will spawn an acceleration of rent increases. Such a possibility has ignited a citywide debate on the loss of middle-income housing -- and people.

"This is becoming a high-end ghetto for transient young professionals," Heath, 54, said with a sweeping gesture as she paused in Stuyvesant Town on a recent crisp afternoon.

New York in the national consciousness is an edgy, unruly city, a place for cultural encounters of every kind. But the face of Manhattan has changed: It is young, white, unmarried, highly educated, highly skilled and, most critical, highly paid.

That's not surprising when average rent in Manhattan for a studio apartment is $2,003, and for a three-bedroom it's $5,679, according to Citi Habitats, a rental agency. Citywide, the median apartment rent is rising even as the median household income goes down.

"New York is a cosmopolitan place where many people want to live, but not many people can afford to live," said William H. Frey, a demographer at the Brookings Institution. "We're seeing the professionalization of Manhattan, and, increasingly, the Manhattanization of Brooklyn and Queens, and even a little bit of the Bronx."

Census estimates show that from 2000 to 2005, more people left the city than moved in, and the exodus was especially pronounced among those with lower levels of education, according to Frey.

In Manhattan and Brooklyn, for the first time since at least the 19th century, the number of blacks declined, according to a Brookings analysis of 2004 census estimates. The white population in those boroughs increased.

New York City has a smaller share of middle-income families than any other major metropolitan area in the country, according to another Brookings study. Thirty percent of its neighborhoods are middle-income, compared with 40 percent nationally. Only 8 percent of Manhattan's neighborhoods are middle-income, while 51 percent are high-income and 40 percent are low-income.

The flight of the middle class from a rich New York has reversed a half-century-old pattern, said Kenneth T. Jackson, a professor of history at Columbia University. In the past, people left the city "because it was dirty, noisy, dangerous, it didn't seem to be a good place to raise a family," he said. "Now, people are more likely to leave the city because they can't afford it."