Real estate trade groups seem old-school and obsolete these days.
Shooting themselves in the foot doesn’t help their dwindling clout.
That’s what the National Association of Realtors seems to have done.
There was the bombshell commission case that NAR lost (with billions in damages on the line), allegations of sexual misconduct at the organization, a revolving door of top brass, and the latest head stepping down over blackmail threats (we still don’t know what that is all about).
Not to mention a loss of membership for the nation’s largest trade organization (1.5 million members), which is supposed to be the heaviest hitter fighting for the real estate industry’s interests.
NAR these days looks a lot like the NRA, minus Wayne LaPierre.
Reporter Sheridan Wall gets into the rise and fall of NAR in our February magazine’s cover story. Some of it is sordid stuff, but the reporting speaks to the broader problem with real estate trade groups these days.
Basically, they are operating like dinosaurs — old-school, ineffectual and flirting with extinction.
In New York, the industry has been taking punches for five years: The rent regulation reform of 2019 gave tenants a lot more power, some left-leaning politicians began declining industry campaign contributions and the governor and mayor stopped showing up at real estate events. Having a developer in the White House at the time probably didn’t help.
New York’s most powerful real estate trade group, the Real Estate Board of New York, was caught flat-footed at the time, and its clout has never fully recovered. Gov. Hochul and Mayor Adams want to build more housing these days, but REBNY can make little headway.
It’s not an easy job, but the group seems more used to backroom dealing and lobbying in an age that demands savvy on social media. (The group needs to hire some interns who know their way around TikTok.) Meanwhile, New York landlord groups RSA and CHIP are merging in an attempt to be more effective and shake things up.
In Los Angeles, the transfer tax approved by voters surprised the industry. The tax has brought the luxury market there to a crawl because it adds a 4 percent charge to the sale of every home above $5 million. There was little awareness of the measure before it was approved, and not much significant mobilized opposition, including from NAR. It’s now being fought in the courts.
Chicago, too, is facing a version of the “mansion tax,” mislabeled because it applies to development sites and commercial real estate as well, not great at a time when the commercial real estate market there needs all the help it can get.
No wonder real estate players like Mauricio Umansky and Jason Haber are taking matters into their own hands by starting a trade group to rival NAR.
Finally, San Francisco, which fell the furthest into the “urban doom loop,” seems to be coming to its senses. More moderate politicians are getting elected there now, thanks to a bit more pragmatism. See our story about real estate’s efforts to facilitate the political shift.
(By contrast, check out our stories on building in post-421a New York and waiting for rules to change on office-to-residential conversions if you want to get a sense of how hard it is to build in NYC right now.)
Elsewhere in the issue, we’ve got great profiles.
We have a story on prominent Los Angeles developer Neil Shekhter, who just lost 28 buildings to lenders to repay more than $1 billion he owed.
We love looking at under-the-radar power players, those who haven’t been written about much considering their massive property holdings and wealth, and Brooklyn developer Isaac Hager fits that bill.
Elsewhere, we shed light on the biggest Middle Eastern investor in New York real estate last year, Qatar, no stranger to headlines these days.
Finally, on to some glitz and glamor from the luxury home market — check out our Closing interview with L.A.’s top agent (according to our most recent ranking), Aaron Kirman and a survey of ranch real estate for Texas’ richest roughnecks.
Included in this print issue if you are a subscriber, we’ve got our 2024 Data Book, the annual almanac of real estate data and statistics for all the markets we cover. It’s the most comprehensive take on the market you are going to get in one place.
Enjoy the issue!