John Banks Reflects On Rent Reform, REBNY's Role And CRE's Future In NYC
John Banks, who led real estate’s peak lobby group through a time of great turbulence, is stepping down from his post as president of the Real Estate Board of New York. The decision, which Banks said has been in the making for a long time, will allow him to take his "dream job" as a stay-at-home father.
Jim Whelan, the executive vice president, will be president as of July 1.
Banks told Bisnow Wednesday he officially notified the board in April of his retirement after four years as president, but held off announcing he would be stepping down until now to avoid causing a distraction. And there is no denying that the group, which represents some 17,000 members, had its hands full in the past few months.
Banks’ announcement comes just days after sweeping new rent regulations were passed in New York, a historic law that is widely viewed as an enormous blow to landlords and property owners and a huge win for tenant advocates.
REBNY, which lobbied hard against the changes in the lead-up to the vote, argues they will do nothing to improve the city’s affordability crisis. Banks told Bisnow he has no regrets with regard to REBNY’s efforts to advocate for the industry, and that they left “no stone unturned” in their attempts to influence legislators.
In a telephone interview with Bisnow shortly after the announcement, he spoke about what he sees as his greatest achievements as president, his belief that grassroots advocacy is the way to go and the greatest challenge for the industry in 2019.
This interview has been edited and condensed for clarity.
Bisnow: So why now?
Banks: So my wife and I have been in discussion for a long time about this decision, and I informed the chairman, Bill Rudin, back in April that I did not intend to renew my contract because I wanted to focus on my family. I have young children, and I wanted to be in their lives. Time is flying and they're getting older and I didn't want to miss this part.
So, it really was just me — and my family — deciding that it's best for all of us for me to commit to and engage in taking care of my kids, and pursuing the other things in my life that I've been doing for a long, long, long time — my philanthropic work and some of the charitable things that my wife and I are engaged in. It just made sense to let them know back in April that I wasn't going to renew my contract. But then the reality of it is it would have been tumultuous and taken away from the actual work that needed to be done if I had announced back in the winter.
Bisnow: Speaking of tumult, the industry has been through a time of enormous change. The rent regulations are considered to be hugely damaging. Looking back, are you happy with how REBNY negotiated through that process and pushed its agenda politically?
Banks: So I do not think that anything we did would have or could have changed the outcome of what's going on up in Albany. The body politic is in a state of flux, not just locally here in New York City or in New York state, but nationally.
And those forces played themselves out up in Albany this legislative session. So I do not think we left any stone unturned in our efforts to try to educate people as to why the proposals being pushed by the progressive caucus would be damaging. I hope that I am wrong, but I suspect that I will be borne out to have been accurate in our prediction. I hope I'm wrong — but if I'm not, in the city the tenants and the owners are all going to be in for a very, very bumpy ride over the next five years.
Bisnow: I’ve seen that you said that the industry needs to be more "grassroots" — more like other advocacy groups. Why?
Banks: We began to implement a more grassroots strategy. Traditionally REBNY had been a grasstops organization. And so when I came in we started the grassroots building and you can see the evidence of our success in doing that in things like when we opposed commercial rent control last fall at the city council. For the first time in the history of the organization we had over a hundred commercial brokers turn out to the city council hearing to stress the point that what was being proposed is, or was, going to be bad for the industry. And that's just a natural way ... how the body politic is changing. Everybody has got to adapt and to be more nimble.
And we certainly have done that journey. But we need to do more, and I'm confident that going forward that will become a bigger part of the REBNY playbook.
Bisnow: When you say grassroots you mean more social media, pulling people from the base and pushing forward the views of the industry?
Banks: Right. More social media. But if you look at tomorrow's hearing on capping broker fees you know we're planning on turning out hundreds of brokers to let the city council and the council members know that you know the community is not just developers in Manhattan but that they represent all segments of the city. Brokers are tenants. Brokers are owners.
And to think that people can willy-nilly pass public policy without considering the complete impact on the stakeholders is something that we're going to be pushing back very hard with. And so that's just another example of us becoming more grassroots-oriented as a tool for us to push. From perspective, empirical information is an important key for us in getting our message across.
But we also have to be able to have bodies that can show up and talk to members and to say [it is] not just a monolithic, Manhattan rich guy who is the real estate industry.
We are trying to get people to understand, [REBNY has] 17,000 members and they represent all communities, all walks of life and all job types within the industry. And so folks need to think of those people when they make a public policy.
Bisnow: What would you say you are most proud of in your time as president?
Banks: There’s a long list of things. Obviously passage of the new 421a, the Affordable New York program was a significant commitment of time and energy. We feel very happy about the outcome. It took a lot longer than we would have liked but the end result is based on sound public policy, and ... I would point that as one of my major accomplishments.
You know we were successful in helping get congestion pricing passed. We were successful in pushing back and stopping an incredibly bad piece of public policy known as the pied-a-terre tax. We were successful in getting the proposal on prevailing wage stopped this year on the residential brokerage side. We were instrumental in getting the Department of State to adopt new rules about advertising to make clear that the consumer is the priority in the relationship. Internally, we took the RLS — less the Real Estate Listing Service — from its infancy to implementation and now through its upgrade and changes. We did the garment center rezoning, we did East Midtown rezoning. We've worked on landmarks issues and timelines. On a more local level we worked with the Department of Buildings to push back on an ill-conceived policy [regarding] rooftop terraces and open spaces.
We dealt with splitlock zoning in a way that we believe is a much more effective way for the city to go about its business. So there are numerous things. But if I had to point to one it would be Affordable New York. And I would like to add to that list the work that we've begun with regard to diversity and looking at diversity in [the] industry and how we can improve it is something I'm particularly proud of.
Bisnow: Nothing’s ever perfect though — if you could name one regret what would it be?
Banks: I regret I didn't lose more weight than I needed to.
Bisnow: But on a policy front do you have any regrets? I mean, some people would look at the outcome of the rent regulation and think that's regretful. Regardless of whether or not you think you could have changed it, do you have regrets around that?
Banks: I do not regret anything we did to try to achieve our goal. I think we were thoughtful. I think we were complete. I think we spoke to as many people as possible. I think on many levels we had very good dialogue with the leadership in the Senate, Assembly and the governor's office. I just think that the reality of where the legislature has moved along the spectrum of progressiveness made it almost impossible for us to be successful.
Bisnow: What do you think is going to be the biggest issue now for Jim, and for the board in general as the rest of 2019 plays out?
Banks: The problem and the challenge is going to be, how do we get legislators to understand that is a very complex industry and that although we are absolutely sensitive to and understand the need for more market-rate housing in order to solve the problem of affordability, I think the challenge will be to educate people as to why that is so difficult. It's an issue of supply.
And if we cannot create enough supply or we continue to shrink the supply through a regulatory framework that acts as a disincentive to the production of housing, then the problems of affordability are only going to get worse. And I think that is going to be the major challenge facing us going forward.
Bisnow: Do you have advice for Jim?
Banks: My advice is to continue to try to present empirical information and have lots of conversation with folks so that they come to understand at least what our thinking is behind our advocacy.
Bisnow: Do you have faith that that will work — considering at the start of this conversation you said there was really nothing you could do in terms of rent regulations?
Banks: I am someone who perceives the world as half full and I think it's worth every effort to try to improve upon the dialogue and the education. So, I am optimistic and hopeful that at some point we'll be able to reach consensus.
Bisnow: There are people who campaigned on not taking real estate dollars. I mean, the political winds have swung — is that how you see it?
Banks: I’ve been doing this for a very long time. The political winds swing back and forth all the time. We never concern ourselves with that. We operate within the framework that is available to us. And whatever that is we work with. So, whether or not someone wants to take money from the industry or not is a matter for them. We will participate in the political process, as is our right. And we will do it thoughtfully, legally and aggressively.