When Mayor Bill de Blasio arrived at the funeral of slain New York Police Department officer Rafael Ramos last month, hundreds of officers turned their backs on him. Now, as the mayor struggles to heal the rift with the police department in the wake of mass protests over the Eric Garner verdict, concern about safety in the city is percolating. And that concern, observers said, could make skittish real estate investors turn their backs — on the city.
The extensive media coverage and lack of an impending resolution has some in the real estate industry ruminating on whether the situation could affect long-term real estate investment decisions here.
“People are aware of it and while it hasn’t created a tangible negative impact so far, the potential is there,” said Bob Knakal, now chair of New York City investment sales at Cushman & Wakefield. “I’m hoping that the two sides will figure out a way to work together. It’s extraordinarily important not only for the city itself but for the underlying fundamentals of commercial real estate.”
Sources noted that there is an historical relationship between real estate values and crime rates in New York.
“We’re seeing a dynamic now between a mayoral administration and the NYPD that we haven’t seen since the Dinkins administration, and that’s a real issue,” Knakal said.
Political strategist Hank Sheinkopf said that during a spike in crime at the end of Edward Koch’s mayoral administration and the beginning of David Dinkins’ administration, real estate values fell, while during Rudolph Giuliani’s administration, as crime fell, real estate values began to climb.
“There is a certain relationship between people feeling safe and real estate,” he said.
Both Knakal and Sheinkopf agreed that regardless of perceived tensions between the mayor and the NYPD, the most important factor to consider is actual crime rates — something that the department’s rebellious work stoppage might make difficult to determine.
“To the extent that crime is low and the city is perceived to be safe, folks will continue to want to live and work here. … When I say low crime, I mean actual low crime, not just unreported crime,” Knakal said.
As far as de Blasio’s prospects for completely mending things with the NYPD, Sheinkopf was skeptical.
“It’s a clash of cultures and it has a lot of elements to it,” he said. “It’s less about money than it is about respect. They see the mayor as being an elitist. … It’s a very difficult position to resolve.”
But despite whispers that Police Commissioner Bill Bratton is losing control of the NYPD, confidence in the city’s top cop remained high.
“Bratton is one of the finest and one of the most historically significant police commanders in American history, and if he can’t fix the problem, it’s not like anyone else can,” Sheinkopf said.
Kathryn Wylde, CEO of the Partnership for NYC, said that Bratton was the key to a peaceful resolution. “The real estate and business community have a great deal of confidence in Bill Bratton’s ability to resolve these issues,” she said.
As far as New York real estate contending with safety issues goes, Sheinkopf said that “the clash between the mayor and the police department is nothing compared to what [Mayor Michael] Bloomberg walked into after 9/11.”
“We have the worst attack on American soil in history. What happens? Mike Bloomberg restores confidence to the business community and real estate values spike quickly and have continued to,” he said, throwing down the gauntlet for de Blasio to turn things around and keep business on track.