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Deals & Dealmakers

REBNY’s John Banks talks affordable housing, Midtown and his first year on the job

John Banks will round one of the final corners of his inaugural year as REBNY president when the leaders of the city’s surging real estate industry congregate at the New York Hilton Midtown for the organization’s 120th annual banquet tomorrow night.

“I’m in it and I love it,” Banks told Real Estate Weekly while discussing his first year at the helm.

“It is to a large degree, what I expected,” he continued. “It is exactly what I anticipated it to be.”

Born in Westchester, raised in Brooklyn and educated in the Bronx, Banks now resides with his wife and two kids in Pelham Manor.

While the well-seasoned New Yorker currently chairs one of the most influential real estate organizations in the world, his path to the industry was far from direct.

Banks began working for New York City Mayor Edward I. Koch in the mayor’s office of operations after graduating from Manhattan College. He was promoted from investigator to the position of operations analyst, where he was tasked with reviewing, monitoring, and preventing potential corruption in city administrative tribunal agencies.

His service to the city led him through a tenure with the legislative branch as the deputy director of The New York’s City Council’s finance division and a 14-year stretch with Con Edison, where he served as a leader in government relations.

He also served as the chief of staff for the City Council after returning in 2000, and he served as the vice chairman of the New York City Charter Revision Commission in 2010. He also aided in Mayor Bill de Blasio’s transition in 2013.

Banks said that the opportunity to get involved in the industry that serves as the lifeblood for New York was too enticing of an offer to pass up. As 2014 headed towards its conclusion, Banks accepted the appointment to his current role and entered the world of real estate.

“My wife is in the real estate industry, so I had the benefit of learning a bit about it from her over the years,” said Banks.

“I knew a little bit more than the average Joe, but I did not think of myself as a real estate professional. I was very content to continue my service at Con Ed. They were a great company. They treated me very well. So I wasn’t looking for a job opportunity and this one came along,” he added.

“I didn’t have a sense of how important and how enmeshed in the everyday life of the city REBNY was and to the degree that it is,” Banks continued. “We deal with every issue that could conceivably come across the public’s consciousness. That part is a bit surprising, although not completely. On the political side of it, it’s exactly what I expected it to be.”

Banks described the organization as “an advocate for the industry at the highest levels of government,” and he relished the fact this role is both a “challenge and an opportunity” simultaneously.

Banks took over from his predecessor, Steven Spinola, at a time when the city’s thriving market is attempting to navigate the challenge of unprecedented success. As values and demand rise, the five boroughs teeter on the edge of pricing out the middle and lower classes that are critical to maintaining New York’s heralded economy.

“The need for affordable housing is a paramount concern for REBNY and for the development and the ownership community,” Banks said.  “Which is why the 421a process is central to that discussion.”

Banks said that affordable multi-family housing must be produced and figuring out how to do it in a way that pleases both those who invest in it and those who need it is of the upmost importance.

“This is why we’ve worked as closely as we did with the mayor over the prior year to come out with a proposal that we felt began to address the crisis of affordable housing in New York,” he continued.

“Without question, I think everybody throughout the spectrum recognizes the need for more affordable housing and the critical nature of that. The issue has been, ‘how do we get there?’ And that’s been a challenge to solve that equation.”

While the city works to house those who wish to live within the city’s limits, Banks extends his concern beyond New York’s locals.

“Anybody who’s travelled into Penn Station thinks it’s woefully inadequate,” said Banks while discussing Governor Cuomo’s push for Penn Station’s redevelopment.

Cuomo presented formal plans earlier in the month, before the State of the State address in Albany last week.

“I’m on the MTA Board, and when you talk to the representatives from Long Island, they are not shy about being depressed about the state of what LIRR travel (has to deal with in the outdated Penn Station),” Banks said.

REBNY’s president understands the push to create a commuting experience that mirrors what the Metro-North offers its riders via Grand Central Station.

“A new Penn Station is absolutely essential to the intermodal capacity of the region to bring people to and from the central business district and to provide a world-class experience, not just for everyday commuters but for residents,” said Banks.

“Funding is always a concern for projects that are that expensive,” he conceded. “But I think the governor has identified the absolute need for it and I have confidence in his ability to figure out how to fund it.”

Banks feels that investing in Penn Station will do more than improve the morning and evening commutes of New York’s workers. It will also give a boost to the strong, yet slightly declining Midtown epicenter of office leasing.

“A revived Penn Station will absolutely help office occupancy and development in the central business district, the Midtown area.

“One of the things that has been interesting for me is the interplay between transportation and the vitality of the real estate industry. If you have a well-functioning and expansive infrastructure to move people around, it only enhances the desirability and the opportunity for change and people’s feeling about a neighborhood,” said Banks.

While Midtown may currently be the secondary story when compared to the brand new furnishings in other areas of the city, or the trendy subsection known as Midtown South, Banks feels that a Penn Station on the level of a Grand Central Station would “contribute greatly” to giving the still very desirable neighborhood a fresh boost.

Of course, REBNY’s long reach extends far beyond Manhattan. Under Spinola’s tenure, Brooklyn grew from tertiary borough to a high-priced, fashionable home for countless New Yorkers.

Will another area enjoy the same prosperity under Bank’s watch?

“I am extremely bullish on the Bronx,” said Banks, who paused to talk about his family’s love for the Italian restaurants along Arthur Avenue. “It’s got tremendous infrastructure.

“The price of land in the Bronx is a relative bargain compared to some other parts of the city, so it’s only natural that the next expansive area in the city will be the Bronx. It’s a great, great neighborhood that’s been overlooked for a long time.”

While the Bronx appears to be enjoying the beginning stages of a swift rise in value, the early stages of Bank’s tenure are certainly leading to a busy second year.

“The process of building affordable housing in New York is going to be a central focus for the Real Estate Board, not just next year, but for every year going forward,” Banks said. “That clearly will be on the forefront of what we’re looking at.

“Tax policy is a big, big, big, issue for us,” continued Banks. “If in fact the city taxed residential multi-family buildings at a more reasonable rate, the need for the 421-a program is mitigated to a large extent.”

He pointed to issues surrounding homeless veterans, landmarking, and the development in East Midtown as other areas of focus for the immediate future.

“Any issue that comes up that has an impact on the real estate industry, REBNY is going to be at the forefront of,” said Banks.

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