With Schumer Leading The Senate, NYC CRE Is More Hopeful Of A Recovery
New York City real estate experts welcomed the results of this month’s Senate election in Georgia as good news for the city and the industry.
With Brooklyn-born Chuck Schumer set to become Senate majority leader next week, experts are hopeful that the federal government will have a larger role in helping New York in its recovery and beyond, including potentially providing federal funding for major infrastructure projects such as the Gateway Program. When that help does come through, the city needs to be ready for it, they say.
“There's just at least going to be an opportunity for momentum in D.C. ... When you have a split legislature the way that we've had for so many years, it's caused so much gridlock,” Real Estate Board of New York Senior Vice President for Government Affairs Reggie Thomas said. “At least now that there is a single party that both the House of Representatives, the Senate … at least we can be able to see some more forward momentum.”
Georgia's two Senate seats both flipped blue when Democrats, Jon Ossoff and the Rev. Raphael Warnock, claimed victory in a runoff election on Jan. 5, giving the Democrats a majority by way of a tiebreaker vote in Vice President-elect Kamala Harris. Their wins catapulted Schumer to the legislative body’s top spot, where he will be the first New York senator to hold the title.
The election came amid significant economic pains for New York this year after its fight with the coronavirus in the spring left it with gaping budget holes. For the past 10 months, real estate trade groups have joined state and city leaders in lobbying Congress for billions in federal bailout money for New York. Without the funding, the prospect of a swift recovery seemed dismal, experts say.
But with President-elect Joe Biden in the White House and Schumer in charge of the Senate, the tide could turn for New York in Washington, experts say. Schumer — known as a steadfast and fierce advocate for New York City throughout his 40 years in the Capitol — has pushed for federal funding for state and local governments this year. He’s worked to secure subsidies for affordable housing and pressed for funding major infrastructure projects.
"[Schumer] wakes up every day asking, ‘How do I make New York City better?'” said Alicia Glen, former New York City housing czar under Mayor Bill de Blasio.
In his last campaign in 2016, Schumer raised nearly $2M from the real estate industry, according to the Center for Responsive Politics. It was the third-largest industry to donate to the incoming-majority leader. Now, as majority leader, he will have even more authority to steer the Senate toward New York’s interests, real estate experts believe.
“I think having Chuck as majority leader is a real win. … He is a real New Yorker, he embodies sort of the grit and the passion of New York City, he’s spent his whole life in New York,” said Glen, who said she has personally worked with Schumer. “What makes me sleep easier is that with Chuck in charge, whatever resources come out of the pen, we know New York will be getting at least its fair share.”
If the federal government does pull through with funding for the state’s budget holes alongside its infrastructure projects, this will be a sharp turn from the last four years, when President Donald Trump blocked federal funding for key state projects, effectively freezing their progress.
"We've certainly had a presidential administration that has taken glee in sticking it to New York," said Seth Pinsky, a former executive at RXR Realty who worked for former Mayor Michael Bloomberg. "Not having that will be a benefit to the city and state."
'Our Future Depends On It'
Among the most prominent of the New York infrastructure projects that Trump cut funding for is the Gateway Program, a proposed $13B expansion and renovation of the Northeast Corridor railway.
The fact that the project has not been completed is “such a massive liability,” Thomas said.
“The Northeast Corridor is such a massive part of the Northeast economy, and the Northeast economy is such a huge driver of the national economy,” he said. “God forbid if something happens. I mean, this is more of a national security crisis more than anything.”
In November, Schumer accused Trump of holding the project “hostage,” and said he had “no doubt” that Biden would ensure the project was completed, NY1 reported at the time. After meeting with Biden’s appointee for Transportation secretary, Pete Buttigieg, Schumer said he was hopeful of the project’s future.
“I explained to him that this has been a top priority for New York for more than a decade and that our future depends on it,” Schumer told NBC 4 New York at the end of December. “He was very receptive, and I was very optimistic.”
The major rail upgrade is a piece of the $306B, federally backed infrastructure plan Gov. Andrew Cuomo announced Thursday, the fourth portion of his State of the State address.
The fact that “the president[-elect] is obsessed with trains,” bodes well for the project too, Glen said. Biden earned the nickname “Amtrak Joe” because he took the train between Washington, D.C., and Wilmington, Delaware, each day when he was a senator.
“I’ve done a lot of work on [Gateway], and now I hope that the missing piece is the federal funding that will get it going,” Glen said. “But that’s low-hanging fruit.”
Glen said she hopes to see infrastructure projects that take the city into the 21st century as well, like a ferry system for all of New York City, which would be even more popular in a post-coronavirus world, she said.
“These are the kinds of things that relatively small amounts of federal money are game-changing,” she said.
New York has been plagued by chronic underinvestment in infrastructure, Pinsky said. He would like to see federal funds be funneled into New York for projects that are long overdue, such as renovating Penn Station, extending rail capacity and rebuilding the subway system.
In order to bring these projects to fruition, New York must proactively plan how to use federal funds when they do come and think about how the state can come up with additional funds to subsidize those at the national level, Pinsky said.
“Chuck Schumer has been and will remain a tireless advocate for the city and state, but he's not a miracle worker,” he said. “He is only one of two legislative leaders, and the legislature is only one of three branches, and the majority that he oversees is razor-thin.”
Pinsky also believes that the city should reassess its infrastructure investment post-pandemic, he said.
“This pandemic may lead to very significant changes in how many people live, work and play, and it may be advisable for us to take a step back that considers that projects that may have made sense in the old world may not make sense in the new one,” Pinsky said.
The 'No. 1 Biggest Concern'
More immediately, experts say Democrats taking over the Senate opens hope for coronavirus relief, particularly renter relief for struggling renters and landlords.
“I'd be remiss without saying the No. 1 issue is rental assistance,” Thomas said of REBNY's federal lobbying priorities. “That is far and away been our No. 1 biggest concern.”
Residents of New York City's rent-stabilized apartments are collectively $1.1B in rent debt, according to a survey released Thursday.
Community Housing Improvement Program Executive Director Jay Martin, who has been lobbying for rental relief for the past 10 months, said he is “extremely hopeful” that renters will get what they need. It’s not about politics, he said — it is just a fact that renters receive more support when Democrats are in charge.
The $900B stimulus package Trump signed in December included $25B for rental assistance, but Biden's stimulus proposal, which he plans to unveil Thursday evening, will likely add to that pot.
“[New leadership] changes a lot,” he said. “It means that we as New Yorkers can expect the money we pay as taxes to come back to us in some form of relief.”
With more federally earmarked funds for rental assistance continuing to flow in, Martin said, the rent debt crisis should become much more manageable.
“This is a solvable problem,” he said.
With any form of federal relief, there also needs to be a proactive plan at the city level to prioritize individuals and industries in the most need, Partnership for New York President and CEO Kathryn Wylde said.
“We need to build consensus around the priorities for how federal funding and local resources are going to [be] deployed to help those who have been most damaged by COVID,” she said.
This means prioritizing funds toward those who have lost their jobs, residential and commercial tenants with back rent obligations and industries that have “been dealt a mortal blow,” Wylde said.
“Brick-and-mortar retail makes up the fabric of our neighborhood shopping districts,” she said. “How are we going to rebuild those neighborhood shopping districts?”
Beyond relief, experts say that New York must be ready to make a comeback and that the federal government must be ready to facilitate it for the good of the country’s economy.
While optimism abounds about the new state of affairs in Washington, anti-development fervor in the city could prevent New York from undertaking ambitious solutions, Glen said.
“We need to show the feds that we’re a city that wants the money, that it’s a pro-growth, pro-development city,” she said. “It’s really, really critical to make sure all of these [infrastructure] projects are shovel-ready … We need to be proactively getting these projects teed up."