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Gone Till September: New Yorkers’ Hopes For A Summer Recovery Have Faded

New York City is moving toward a partial reopening Monday as hospitalizations continue to decline and sufficient space in the city’s intensive care units becomes available. Still, the lingering anxiety over the coronavirus, widespread unemployment and widespread demonstrations are taking a toll on the outlook for the city. 

Gone Till September: New Yorkers’ Hopes For A Summer Recovery Have Faded
Protests on the Upper East Side of New York City Tuesday, June 2, 2020.

“I really felt a week ago, prior to the civil unrest, we were really close to turning a corner,” said Joy Construction principal Eli Weiss, whose company is building around 1,000 affordable housing units in the city, including a major development at 1159 and 1184 River Ave. in the Bronx. 

“No. 1, [the unrest has] created another obstacle and something we all have to deal with," he said. "The second thing is the potential for there to be a spike in cases that would bring us back to where we were. It’s just another unfortunate circumstance that affects people’s confidence, and our economy runs on confidence.”

Demonstrations against police brutality and systemic racism have spread across the nation over the last week, fueled by the death of George Floyd while in police custody in Minneapolis. In New York City, demonstrations have been largely peaceful over the last two nights after major looting and vandalism was unleashed on stores and businesses Sunday and Monday.

Gov. Andrew Cuomo on Thursday urged protestors to get tested for the virus and to act as if they have been exposed. Officials say that at this stage, the city is still on track to begin Phase 1 of reopening on Monday, which would allow nonessential construction, manufacturing and some retail to start back up. Fifty-two people died from the virus in New York between Wednesday and Thursday morning, according to the state Department of Health. 

Weiss, who owns some 2,500 affordable units and 500 market-rate units in the city, said he is optimistic long-term for New York City. But he acknowledge that it has taken some immediate blows. He has spent much of the last 90 days working with tenants who are asking for rent abatements or trying to break leases.

There has been a well-documented exodus from the city, which may be temporary. The uncertainty of the city’s schools reopening in the fall is another wrench in the works for apartment landlords hoping that residents have more reasons to stay.

“We are looking at a difficult 18 to 24 months any way you cut it,” he said.

The devastation the pandemic has wreaked on the city and the outpouring of rage on display from these protests may deliver a wake-up call to the development community.

“The last cycle, developers decoupled from what is truly good for New York City versus what was good for their bottom line. So much press went to projects that 99.9% of New Yorkers can’t afford and retail that is beyond the reach of the average New Yorker,” he said. “I think the concept of 'essential services' through the COVID pandemic has reminded us what is truly important.”

Gone Till September: New Yorkers’ Hopes For A Summer Recovery Have Faded
A Thorobird Cos. construction site in the Bronx, which has been able to continue operating through the coronavirus pandemic.

The pandemic has been economically ruinous for the city and state. Some $7.4B in tax revenue in New York City is projected to be lost by mid-2021, per the New York Times, and government officials are now anxious billions in city budget cuts could delay financing for thousands of badly needed affordable housing units.

“It’s going to be a rough ride, but we are New Yorkers,” said Slate Property co-founder David Schwartz.

The company’s affordable housing development sites have continued operating, and he is hoping to start construction again at the Biltmore next week once officials give the green light. That project involves the renovation of an existing rental building in Midtown.

Schwartz said Slate has not seen a drastic drop in its rent collections, but he expects this summer could be bleak as people opt to stay out of the city far more than normal.

“There is a big feeling that September will be the new June,” he said. “People have gone to other places for the summer with the idea that they are not going to return to work. A lot of companies have not opened up. Slate, for example, is closed until after Labor Day.”

Thorobird Cos. has kept three affordable housing development sites running through the crisis, and founder and principal Thomas Campbell expects the pandemic will create a laser focus on the development of affordable housing.

Earlier this week, his project at 2195 Morris Ave. in the Bronx was cordoned off by police because of the demonstrations, and workers were prevented from getting to the site. Campbell said he spoke to the police himself, who allowed workers through the blockade.

“We explained it is affordable housing, essential and needed for the city’s future. They let our trucks and our guys through,” he said. “I’m in support of the protests. I’m in support of the police. We need to fix this problem together.”

Gone Till September: New Yorkers’ Hopes For A Summer Recovery Have Faded
A damaged Sephora on Fifth Avenue.

Several real estate executives have spoken out against racism and inequality in recent days as the protests have gained steam. Related CEO Jeff Blau described inequality as the greatest threat facing the country’s future and acknowledged the industry’s failure to diversify its ranks. Real Estate Board of New York President James Whelan has vowed to try and find solutions and offer “not just lip service,” per The Real Deal.

"It’s a challenging time. It is a sad time. But it’s probably the most optimistic I have ever been about the future of America," said BOS Development Managing Partner Beatrice Sibblies, whose firm focuses on Harlem

Cedric Bobo, who runs Project Destined, a program that offers young people, particularly young people of color, the training they need to break into commercial real estate, said this moment feels different.

Business leaders, including real estate executives, are speaking out against racism, which he expects will have a greater impact than movements previous.

“You don’t just have Colin Kaepernick saying, ‘I’m frustrated,’” he said. “I’ve never seen the volume of people speaking and the consistency of the language. ... And as we rebuild these communities, we need to think how to do it in an inclusive way. Otherwise, we will just repeat the problems of before.”