The Real Deal New York

Editor's note: The great whiplash

By Stuart Elliott | March 01, 2019 12:00PM

Stuart Elliott

Call it Ping-Pong politics.

The people who thought Donald Trump’s election would be a boon for business might want to think again.

With the federal government moving so far right, it has hastened a leftward backlash in American big cities, New York included — and it’s already having major implications for real estate.

Amazon’s decision to back out of New York for its HQ2 was just the start, as we explore in this month’s issue.

Alexandria Ocasio-Cortez’s surprise congressional win last summer emboldened the liberal wing of the Democratic party. So by the time Amazon announced that it had selected Long Island City for a much-anticipated new office megacomplex — right by Ocasio-Cortez’s district in Queens — the outpourings of a vocal progressive minority led the e-commerce giant to scuttle its plans. 

Increasingly, things seem to be coming full circle two years into Trump’s presidency. The administration vowed to usher in business-friendly policies, less regulation and lower taxes. But it’s spurring the opposite here in New York. Some in real estate now fear a liberal agenda, directly pointed at the industry, even if they agree with its social aims. 

“The political environment for real estate is the worst that I’ve seen in 20 years,” said industry lobbyist and attorney Ken Fisher.

As reporters Kathryn Brenzel and Will Parker write, with Democrats now in full control of the state Senate, “programs that landlords have enjoyed for nearly three decades — and which often serve as the basis for their entire business models — could soon disappear.” And a growing number of politicians have vowed to reject campaign contributions from developers.

Many say that the real estate industry and its chief lobbying group, REBNY, will likely need to give up some ground on rent regulation and other issues. Read the story here.

“This is a pivotal moment and wake-up call for the business and real estate community,” said Suri Kasirer, one of the city’s top lobbyists.

As part of our cover package, reporter Decca Muldowney met with state Sen. Michael Gianaris, “the Amazon slayer,” who was nominated to an obscure state board that had the power to end the HQ2 deal. In a sign of the shifting political winds, Gianaris, who had previously had garnered the support of the real estate community, came out swinging against Amazon.

And for what all this means for luring giant corporations to New York going forward, read our piece here.

Meanwhile, we’re nearly a year and a half into the #MeToo movement, and real estate is not immune. Starchitect Richard Meier was among those accused of acting improperly by five separate women at his firm in early 2018. But a year later, has anything changed? We went back and found that Meier was still working at his firm, while there’s growing frustration over what some see as a whitewashing of the accusations leveled against him.

Beyond the spectre of social movements and politics, New York’s residential market itself remains relatively weak. Last year, the total volume of Manhattan sales saw its largest decline since the financial crisis, according to Douglas Elliman. Against that backdrop, developer Ziel Feldman is trying to unload units at one of the city’s most architecturally ambitious and high-stakes condo projects: the twin-towered, Bjarke Ingels-designed “XI.” If Feldman succeeds, he could break Downtown records. But the area’s new development market — which fellow developer Cary Tamarkin labeled “a nightmarish hell” — may stand in the way.

Finally, we examine one of the brightest spots in the New York real estate market in 2019, so-called “last-mile” industrial properties. As the e-commerce industry booms, investors are betting big on new urban warehousing that can get deliveries to customers quicker. In the ultimate irony, the western Queens market that Amazon abandoned for HQ2 could be propped up by none other than … Amazon. Talk about coming full circle.

Enjoy the issue!

Correction: An earlier version of this story said that Politico called Gianaris “REBNY’s new favorite senator” in 2016. In fact, Politico was referring to Todd Kaminsky.