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Real Estate Anxieties Ease As NYC Mayoral Moderates Pull Ahead

Voting in the New York City mayor’s race is less than two weeks away, and a few candidates are starting to pull in front. Real estate players are breathing a cautious sigh of relief that the Democratic candidates considered moderates — Brooklyn Borough President Eric Adams, Kathryn Garcia and Andrew Yang — are seemingly gaining traction.

But with ranked-choice voting, a politically fatigued electorate and a suite of socialist candidates eyeing seats on the powerful New York City Council, the industry is coming to grips with the reality that it may still be a challenging political environment ahead.

Brooklyn Borough President Eric Adams is leading the polls in the Democratic mayoral primary.

“The two leading candidates at the moment seem to be Andrew Yang and Eric Adams, and those two remain candidates that I think the broader real estate industry hopes that we can work with … But it’s never over until it’s over,” said Jay Martin, the executive director of the Community Housing Improvement Program, a landlord lobby group. “We’re focused on the city council outcome because as we've learned that the mayor is important, obviously, but the direction of the city council is also significant.”

Polling out this week suggests Adams is now in the lead, scoring 22% support from likely Democratic voters. The NY1/IPSOS poll, taken in May, has former presidential candidate Yang at 16% and Garcia, a former sanitation commissioner in the de Blasio administration, at 15%.

Over the weekend, Rep. Alexandria Ocasio-Cortez added her influential voice and platform to the race, endorsing Maya Wiley as her pick to lead the city. Commentators see Wiley as progressives’ best bet after Comptroller Scott Stringer has been hit with sexual misconduct allegations by two women in recent weeks and Dianne Morales’ campaign has faced internal turmoil, with one staffer last month claiming she had created “a hostile work environment” for employees of color (her campaign fired 45 staffers Wednesday, the New York Daily News reports).

Shaun Donovan, former commissioner of the city's Department of Housing Preservation and Development under the Bloomberg administration and former Secretary of Housing and Urban Development under former President Barack Obama, is also running, as is former Citigroup Vice Chairman Ray McGuire — though they have not seen significant traction of late.

RXR CEO Scott Rechler, the chairman of the Regional Plan Association, said his view is most real estate executives are backing the popular moderates, with the hope they look to fix the problems like homelessness and crime.

“With an Eric Adams or a Kathryn Garcia, both know how to manage the city and often know where their strengths are and where they have weaknesses," Rechler said. "And I think they'll tap people to fill those weaknesses.”

The die is not cast yet, however.

“There's plenty to suggest that it's a done deal, and there's plenty that suggests it might not be,” said John Jay College of Criminal Justice Associate Professor of Political Science Susan Kang. “I do think it’s going to come down to [Yang, Garcia, Adams and Wiley] … but the one lesson that we learned is that anything is possible. We learned that in 2016.”

Andrew Yang

Kang, who is also on the steering committee of the Democratic Socialists of America, said the impact of ranked-choice voting in New York City means it could take longer than expected to declare a winner. Even once the mayor's race is declared, if the mayor is a centrist and the city council moves farther left, it could lead to a fractious political environment, Kang said.

“We're looking at a potentially historically progressive and very diverse set of young, new first-timers,” she said, adding there are six DSA candidates running with a good chance of winning — but many more who align with the far-left party's ideologies.

In endorsing Wiley over the weekend, Ocasio-Cortez also backed 60 progressive city council candidates. Those candidates signed a 30-point “pledge,” per The New York Times, that aligns with her PAC Courage to Change. The pledge involves rejecting donations from both the fossil fuel and real estate industries.

“If you get a really progressive city council and you get Eric Adams as mayor, you might see a lot more like power or taking-power from the city council, particularly if you have a progressive and well-organized speaker," Kang said. "The city council was much more empowered and combative under the Bloomberg administration than it was under de Blasio."

Martin said he isn't worried about Ocasio-Cortez’s endorsement of Wiley pushing her ahead of Adams or Yang, but said the support of the congresswoman, who represents parts of Queens and the Bronx, will have an impact on the city council races. From a real estate perspective, he pointed to the city’s Local Law 97 as having a major impact on landlords' ability to do business.

“We're focused on [if] socialists or an ultra-liberal city council comes out of the races, what other additional policies could they push the mayor — or go above and beyond the mayor — to force additional costs onto property owners?” Martin said.

Shaun Donovan speaking at Bisnow's affordable housing summit in February 2021.

Some real estate players had high hopes for McGuire early on, as he was seen as the most business-friendly of the lot. Rechler, who leads one of the Tri-State Area's largest property owners, said many also liked Donovan along with McGuire, but most have accepted neither is likely to win.

“We had all the candidates speak to the [Regional Plan Association] board, and Ray did a great job of speaking to a broad base,” Rechler said. "But just the name recognition is challenging."

Emails to McGuire’s campaign press contact were not returned. Donovan campaign consultant Yuridia Peña told Bisnow in a statement: "Shaun has the boldest, most comprehensive plans in the field, from Equity Bonds to 15 Minute Neighborhoods — and since voters have their opportunity to rank candidates, we are confident his unifying vision will ultimately resonate with voters, even if he isn’t necessarily their first choice." 

On the whole, industry voices Bisnow spoke to say crime, homelessness and the livability of the city are their biggest issues for city government as the pandemic begins to subside. Hotel Association of New York City CEO Vijay Dandapani said the organization is most focused on homelessness when it comes to the mayoral race.

“We are really concerned with homeless people, you know, literally the front yards of hotels,” he said, adding that his association will not be endorsing anyone. 

Joy Construction's Eli Weiss, whose company owns multifamily properties in Manhattan, Brooklyn, Queens and the Bronx, said real estate is now more concerned with trying to elect a mayor who will be able to improve the quality of life of the city.

“I think the real estate community has been experiencing a sense of anxiety, politically, for almost a decade,” he said. “I think that I always view change as an opportunity, not as a reason to be anxious. And so I'm fairly confident that whatever candidate comes in, if quality of life is the first issue, that will translate into a positive outcome for the real estate [industry].”

While in the past, real estate has looked to flex its muscle as much as possible with funds, a paradigm shift has meant major players have worked to shape the race through other means.

Lisa Blau, the wife of Related CEO Jeff Blau, for example, formed an organization aimed at encouraging Republicans and independent voters to register as Democrats so they can have their say in the mayoral primary.

Frank Ricci, an executive vice president for the Rent Stabilization Association, told Bisnow earlier this year the organization’s 25,000 or so members are now getting involved more than ever before — with those who have sat on the sidelines for years seeing this as a “wake-up call.”

“The major business and real estate communities have done major efforts to get out the vote and get people to register to vote, so we're hoping to see more voters, which generally means that the results are more moderate than when just the passionate extremes come out,” said Kathryn Wylde, the president and CEO of the Partnership for New York City. “The polls indicate so far that more moderate candidates are in the lead, which hopefully suggests a better business climate in the city under a new mayor.”