The circumstances are getting better for real estate, and it’s not just because of lower interest rates. We are in a more pro-housing environment than in the past.
In her platform, Vice President Kamala Harris focuses on building 3 million new homes to ease the affordable housing crunch. Presidential candidates don’t often talk about housing that much, so it is creating a buzz.
New York state passed new incentives for developers this spring. And in the city, the Adams administration is pushing the City of Yes plan, which will update zoning requirements and spur building.
Even far-left politicians like Alexandria Ocasio-Cortez are writing editorials in the New York Times about the need to build more housing, albeit through a new federal agency, which seems impractical — something that wouldn’t have happened a year or two ago.
California too is pulling out the stops to build. Last month Governor Newsom signed more than 30 bills aimed at spurring housing. And San Francisco, whose business district was hardest hit by Covid effects, appears poised to elect more moderate politicians who will aggressively combat high office vacancies and safety and homelessness concerns, a step in the right direction.
Now here is the bad part: the indictment of New York’s Mayor Eric Adams last month. Adams, now facing federal corruption charges, is pro-housing and pro-business. How much of his agenda will be undermined by the turmoil surrounding his administration?
The real estate industry has supported the mayor, but it’s worth asking if that was a devil’s bargain. He was pro-real estate, but at what cost? Real estate may have looked the other way all along, when what appeared to be a fast-and-loose approach to the job showed up in everything from Adams’ selection of appointees to his love of nightlife.
We’ll see if the mayor hangs in there until the next election in 2025, but for the real estate industry, there aren’t a ton of palatable alternatives. Candidates like Brad Lander, current city comptroller, are not exactly beloved by real estate (see the Closing interview).
Hopefully, the City of Yes won’t become the City of Mess.
It’s not like New York doesn’t have other cities nipping at its heels. The city arguably lost ground to other parts of the country during Covid. And New York’s dominance when it comes to the finance sector isn’t a given. Just take a look at “Y’All Street,” Dallas’s answer to Wall Street, where a ton of new building is being planned for the likes of Goldman Sachs and JP Morgan Chase.
It’s not just the mayor who has problems. Distress in the market turns into personal distress, too. In our cover story this month, reporters Elizabeth Cryan and Jess Hardin piece together how high-flying, risk-loving developers deal with disaster.
Faced with adversity, some developers “bluff and borrow their way through the low points; others collapse, disappear,” they write.
Last November, Los Angeles multifamily developer Artem Tepler died by suicide after a string of bad deals that he personally guaranteed. New York developer Brandon Miller took his own life in July. Both “were reminders of the sometimes debilitating stress of the job,” Cryan and Hardin write.
But it doesn’t have to be that way. For developer Eric Brody, who had to hand back the keys to an Upper East Side condo project during the Covid years, the low point kicked off a journey that involved personal growth — even if it was a tough path.
“The biggest thing that I learned when I was in the MMA fight of my life getting the shit kicked out of me is that it’s really a personal experience,” he said.
Brody learned to “sit within his discomfort” and feel grateful for the food on the table and roof over his head, he said.
For developer Josh Schuster, who faced defaults and lawsuits over his projects, the biggest regret was not asking for support sooner. “People need to know that it’s OK to ask for help,” he said, “especially when dark thoughts enter your head.”
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