By James Whelan, president, REBNY
2019 was another strong economic year for New York City. The economy surged and we saw record job growth. Crime stayed near historic lows. Our population continued to grow. A record number of tourists visited the five boroughs for the ninth year in a row.
New York made progress combating its housing crisis, creating and preserving a record number of affordable homes.
The real estate industry once again was central to the City’s success.
The grand opening of a brand-new neighborhood took shape with the completion of the first phase of Hudson Yards.
One Vanderbilt topped out as the tallest office building in Midtown.
New homes and offices were opened along the Brooklyn and Queens waterfronts at the Brooklyn Navy Yard, Domino, Hunters Point, and Hallets Point.
The development of Long Island City and Downtown Brooklyn continued apace, and new exciting plans were unveiled for the Bronx waterfront, Pacific Park, and the Farley Office Building.
These projects will bring new mixed-use space, public parks, and offices, as well as market-rate and affordable homes that will sustain our growing city in the years ahead.
Several policies were passed in 2019 though, that call into question the City’s future economic direction.
For example, changes were made to the rent laws in June that did little to address the City’s housing crisis. These changes will not ease vacancy rates, create a single new affordable unit, or assist individuals or families that already have difficulty paying their rent.
Instead, the new rent laws, over time ,will lead to deteriorating housing conditions. The new laws also will reduce the property tax revenue generated by rent regulated units by as much as $1 billion per year within the next five years.
Undoubtedly, New York City has an affordable housing crisis. Solving this problem will require focusing on those individuals and families who need assistance paying the rent and creating new units for a range of incomes to establish a robust housing market that offers enough choices to renters.
The City’s economic future took another step in the wrong direction in April when the City Council approved legislation to reduce greenhouse gas emissions from some buildings in New York City.
The reduction of greenhouse gas emissions is of utmost importance and City officials set the appropriate goals to achieve such reductions.
However, the approach taken by the City legislation will restrict a building’s ability to accommodate more people. In short: the more densely occupied, the more energy it will consume and the more likely it is to exceed the new energy limits.
Over time, the law will penalize those owners who lease space to industries such as technology, media and finance.
Less economic growth will mean less tax revenue to pay for city services.
These policy changes came after the federal government’s elimination of the state and local tax (SALT) deduction. The elimination of SALT will continue to put a strain on our economy.
It has incentivized high income earners to leave the region and will negatively impact the ability of state and local governments to finance basic government services.
These challenges will only make us fight harder and smarter for policies that will result in more job opportunities, more critically needed housing, and more tax revenue that will result from such economic activity to pay for vital government services.
If New York City wishes to be a progressive city, it must be a prosperous city. Such prosperity will only be created through the City’s continued growth to accommodate the need for more housing and jobs.
REBNY will do this by building new coalitions, both internally and externally. We will employ data-driven advocacy for sensible, pro-growth policies. We will foster stronger and more meaningful relationships with public officials and constituency groups throughout the city and across the state.
We are already seeing the positive results of this approach.
In 2019, we worked with a coalition of business, environmental, transportation and labor groups that successfully advocated for congestion pricing tolls on vehicles that enter Manhattan south of 60th Street. This dedicated revenue stream will improve subway service, ease traffic congestion, and reduce pollution.
In June, we organized more than one thousand residential agents to participate in a thunderous rally on the steps of City Hall and a subsequent City Council hearing in unified opposition to legislation that would cap certain residential brokerage rental commissions.
We worked with stakeholders to advocate for a commercial waste collection system that provides high-quality service to customers while also building a greener, less-congested city.
The new framework sets an ambitious new bar for critical safety, labor, and environmental standards that our commercial waste collection system has long lacked.
We want to be the most effective advocate, educator and convener possible for the real estate industry and for New York City overall.
We are the City’s most important industry, powering the success of the five boroughs. When real estate thrives, New York City thrives. We rise and fall together.
By successfully advocating for more jobs, more housing, and additional tax revenue, we are pointing the city we all love in the right direction.
We will be unrelenting in our pursuit of this task and will fight harder and smarter than ever for policies that will lead to an even brighter future for our city.
We want to thank John Banks, who announced his retirement after five years of service to REBNY and 33 years in the private and public sectors.
John led REBNY with a steady and expert hand. REBNY’s Board of Governors is grateful to John for guiding the organization through many pivotal moments for our industry. The organization and our industry is better for his leadership.
Finally, in 2019 we mourned the loss of a giant of the real estate industry, REBNY Chairman Emeritus, Burton P. Resnick. Burt was involved in many philanthropic organizations that touched the lives of countless New Yorkers over the years.
His dedication to improving our City and representing the best interests of our industry was unmatched. He will be missed by all.