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REBNY Policy Chief Delivers Fiery Call To Action For Real Estate To Get More Political

REBNY's Basha Gerhards, Vanbarton Group's Richard Cole and Slate Property Group's Brian Vetter at Bisnow's New York multifamily event March 21.

The relationship between the real estate community and lawmakers only seems to be becoming more fractious, and the industry’s top lobbying group is asking its constituents to get harder for Albany to ignore.

“You're constituents for these elected officials. Are you calling them and saying, ‘You are putting my job at risk, my livelihood at risk if you don't understand the math, and that means I'm not going to be able to house my family, build equity or send my kids to college?’” Real Estate Board of New York Senior Vice President of Planning Basha Gerhards asked the audience at Bisnow’s multifamily event this week.

“They're not getting those calls. They're getting calls from tenants who are saying ‘The roof is caving in and the city hasn't shown up to inspect it … The owner ignores my phone calls and still collects my rent so I don't feel like paying anymore.’”

The state legislature is in the final days of budget negotiations, and hitting the deadline of April 1 is now looking impossible. Housing initiatives that REBNY has lobbied for were key among Gov. Kathy Hochul’s proposals, but many have been spurned by the state Senate and Assembly in their reponses. In budget resolutions released earlier this month, Hochul’s planned extension on 421-a was left out and her housing growth targets were curtailed.

In her proposed Fiscal Year 2024 budget, Hochul proposed pushing the deadline to complete 421-a projects back to 2030. Right now, developers who filed to build projects to benefit from the now-expired tax break need to complete their projects by 2026.

However, lawmakers excluded it from their own budget proposals, instead offering to issue the tax break on a case-by-case basis. Lawmakers also rejected her idea to increase housing density near transit hubs and to raise New York City’s cap on floor area ratio, which has been cited as an impediment to building denser housing.

REBNY says about 33,000 units in New York may not be built without the deadline being extended. Meanwhile, rent in New York continues to climb, now standing at an average of $5,186 per month in Manhattan, per appraisal firm Miller Samuel.

“I want you all to think about this. How many of you voted in the last general election for the presidential race? How many of you voted in the primary for those presidential races? How many of you voted then for your local city council seat? How many of you voted for the primary for that local city council seat?” Gerhards asked the audience.

“Real estate employs thousands and thousands of people in New York City, and thousands and thousands of them are registered to vote. A lot of them don't.”

In 2021’s mayoral race, the real estate industry mobilized to push people to vote as angst about a progressive, left-wing New York City Council reached a crescendo. The Rent Stabilization Association, for example, got involved in the city’s political races for the first time. Related Cos. Chairman Stephen Ross launched a super PAC for the race, and Lisa Blau, the wife of Related CEO Jeff Blau, formed an organization aimed at encouraging Republicans and independent voters to register as Democrats so they could have their say in the mayoral primary.

Mayor Eric Adams has styled himself as a pro-housing, pro-development governor, famously declaring "I am real estate" and coming out in support of multiple proposed developments in the last year. But without legislative and government support at the state level — chiefly in the form of zoning changes and tax incentives — industry leaders said more housing won't be built and the housing crisis will worsen.

“[Politicians] are not getting calls from people who live and work here saying 'This is not OK,'" Gerhards told the audience, many of whom applauded. “To be clear, that tenant situation is not OK, but also it's not OK that you're not listening to math that you're not understanding the city doesn't have enough money to offset what I am doing for my business, and that you're controlling my ability to make money and pay taxes in this city, which funds everything else that we say we want and need to live here.”