It would be an understatement to say there’s little optimism that Albany lawmakers will do something good for real estate this session.
Killing the 485x wage rules would create thousands more apartments, but it’s hard to imagine Gov. Kathy Hochul and others defying construction unions — who basically wrote the rules — in an election year.
With the governor and everyone else focused on affordability, I would also be shocked if lawmakers allow higher rent increases to renovate rent-stabilized apartments, even as tens of thousands sit vacant.
What about a new tax break or direct funding for apartment improvements? Don’t count on it. Expanding child care is a much higher priority for lawmakers, and it will be expensive. Other funding will go toward offsetting federal cuts. Little will be left for buildings.
In another bad break for rent-stabilized owners, Linda Rosenthal isn’t running for the state Senate seat being vacated by Brad Hoylman-Sigal. That means she will remain chair of the Assembly Housing Committee, where she is a huge impediment to any reform seen as helping landlords.
Some legislators are interested in bringing down insurance premiums, not so much to help landlords but because politicians like to go after big corporations. Insurance companies, which have jacked up their rates, would seem like a fine target.
But going after them is like stabbing Jell-O with a fork. They are already regulated by the Department of Financial Services, and most probably donate to legislators who sit on the relevant committees.
More importantly, if carriers feel they’re taking on too much risk or being treated unfairly by the government, they simply stop writing policies. When insurers withdraw from a particular area or stop covering a certain class of buildings, the remaining insurers can charge more.
I’m a homeowner who has never filed an insurance claim. Yet insurers have canceled or declined to renew my policy several times. In what other industry do businesses regularly abandon their customers?
“Hello, this is Equinox. We thank you for being a loyal customer, but we’re declining to renew your gym membership.” Never gonna happen.
The political strategy, therefore, is not to punish insurers but to attract them, to increase competition and add options for building owners.
What we’re thinking about: One landlord predicts state legislators will make things worse, not better, for owners this session. “They’re going to pass a ton of new rules,” tweeted WestHarlm.
A tenant who WestHarlm discovered illegally rents two rent-stabilized units threatened in front of eight witnesses to kill and then behead him. The landlord called 311 four times to file a complaint but was told there is no mechanism to do so. Tenants, he noted, have 11 harassment claims from which to choose.
Send your thoughts to eengquist@therealdeal.com.
A thing we’ve learned: It’s notoriously hard to build anything in California, be it housing or high-speed rail. But when a devastating fire or earthquake hits, California suspends bureaucratic obstacles to quickly build back what was destroyed. Check out Kari Hamanaki’s story in The Real Deal’s January magazine on how things are progressing one year after fires ravaged Los Angeles. (Here’s the Instagram post and the LinkedIn post.) It’s hard not to think that California’s housing shortage could be eliminated if treated with the same urgency.
Elsewhere…
Despite some news coverage, few people noticed when, two days before Christmas, a garbage truck in East Harlem caused a scaffolding collapse that killed a woman.
To my knowledge, no one has estimated how many lives have been saved by Local Law 11, which triggered an epidemic of sidewalk sheds in an effort to prevent fatalities from falling debris.
Any such analysis, which should certainly be done, must also take into account how many people lose their lives in scaffolding collapses. It’s rare, but then, so were deaths from falling debris before Local Law 11. They remain rare in cities that don’t have an equivalent law.
The Adams administration made progress in reducing the number of sheds, but no one will ever acknowledge that it might not make sense to try to prevent every death from a particular kind of accident. The consequences of such an effort — including the use of resources that would otherwise go toward other needs — have to be measured as well.
Closing time
Residential: The top residential deal recorded Wednesday was $7.73 million for a 2,524-square-foot, sponsor-sale condominium unit at The Cortland, 555 West 22nd Street in Chelsea. Shaun Osher of CORE had the listing.
Commercial: The top commercial deal recorded was $71 million for a 66,893-square-foot, mixed-use property at 410 West 13th Street in the Meatpacking District. TP Angelo Gordon purchased the property from British firm Epic.
New to the Market: The highest price for a residential property hitting the market was $26.75 million for a 7,000-square-foot condominium unit at 1110 Park Avenue in Carnegie Hill. Eva Penson of Sotheby’s International Realty has the listing.
— Matthew Elo