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The condominium market in Long Island City has predictably taken off in the wake of its Amazon HQ2 win, but one state senator is suspicious that some may have gotten a head start.
Sen. Michael Gianaris, a Democrat representing part of Long Island City, is drafting legislation that would ban the buying or selling of private real estate based on any nonpublic government action, the Wall Street Journal reports. Gianaris told the newspaper that he expects to introduce the legislation in January.
The action comes less than two weeks after a previous WSJ report saying that at least two Amazon employees had agreed to buy condos at the under-construction Galerie building in the days before Amazon publicly announced the selection of Long Island City and National Landing in Virginia as the future homes of a split HQ2. Unlike in stock trading, such real estate deals are currently legal.
One day before the WSJ Galerie news, the New York Post reported that TF Cornerstone had closed on the $300M purchase of a 327K SF development site at 55-01 Second St. before the HQ2 announcement. The site sits mere blocks away from the planned Amazon campus, for which TF Cornerstone was named the developer.
“There is no reason that trading on inside information on stocks is illegal, but allowing it for a commodity like real estate is allowed,” Gianaris told the WSJ. “We need a change in law to clarify that this is not OK.”
Under the bill, the penalty for insider trading of real estate would be up to four years in prison. Gianaris clarified that it would not apply retroactively.
In the wake of the announcement, interest in the LIC condo market has spiked dramatically, effectively ending multiple years of negative metrics, the WSJ reports. In some cases, the number of potential buyers for a condo in the neighborhood has reportedly increased tenfold. Much of the neighborhood has also been named a Qualified Opportunity Zone in the new federal tax law, only adding more fuel to the fire.
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